Psychology and resilience

STAR MANAGERS SPECIAL

Airlie Funds Management:

Airlie Australian Share Fund

Emma Fisher (portfolio manager), Matt Williams (co-portfolio manager)

Airlie Funds Management’s portfolio manager, Emma Fisher, who has been named the Financial Newswire’s Star Manager, has said being a successful portfolio manager is about making the right decisions under pressure and with incomplete information.

Fisher, who has been running successfully the Airlie Australian Share Fund, together with another co-portfolio manager, Matt Williams, said that 90% of what makes a good investor comes down to psychology and resilience.

“I think what makes a good portfolio manager is really having the mindset, mastering the psychology of the market which is a life-long pursuit,” she said.

“And [your] ability to make decisions with incomplete information, make decisions under pressure, stand by decisions as you are never going to know everything.”

Describing her approach to investment approach, Fisher said the biggest differentiators of her fund was that it invested in the “sensible middle”.

“We believe in concentration and we are looking for our best ideas which for us typically leads towards what I would call undervalued quality. In the Aussie market everyone wants to put you either in the growth bucket or the value bucket because it is an easy way to look at investors but we, kind of, push back on that.

“We own some companies that you would more think of growth stocks, we own some companies you might think more of as value stocks but what for us is really important is owning quality businesses that can earn good returns.

“We typically invest in what I might call – the sensible middle.”

“The final thing that makes us a little bit different is [the fact that] we look for ideas up and down the market spectrum, we are not mid-cap, we are not small cap, we are not large cap. We are just looking for any business, of any size, that ticks all four of our boxes, of our investment process and those four boxes are: balance sheet, management quality, business quality and valuation.”

Asked what makes a good portfolio manager and what advice she would give those pursuing this type of career, Fisher replied: “My piece of advice would be welcome it’s the best industry, the best job in the world, in my very biased opinion, because effectively you are paid to think and you enter the world of constant learning and constant improvement. And yes part of that constant improvement is that you are going to make mistakes, and some of those mistakes would be painful.

“But it’s a job I have always found incredibly fulfilling at a personal level because of the opportunity for constant improvement and constant growth.

“You never land in a place where you feel you know everything and if you feel that way and you are complacent you are probably moments away from making some of the worst investments mistakes.

“Markets are truly humbling they always are, they always will be, and if you put your head down and will be willing to work then I think it is one of the best jobs out there for people that are intellectually curious about the world.”