Legendary investor Peter Lynch called it “the power of common knowledge”, investing in what you know – the companies that sell the goods and services you recognise as better than the rest.
For local investing guru Manny Pohl, the driving force behind the award-winning Hyperion Asset Management and now founder of EC Pohl & Co, his “Peter Lynch” moment came last year when he noticed a vast improvement in Telstra’s service over a matter of months. That led him to make his maiden investment in the national telco.
“All of a sudden Telstra was starting to get proactive with a little fund manager who had no strings to pull,” says Pohl.
Buoyed and perhaps intrigued by the step-change in customer service, he attended an investor day with Telstra, who blew the other presenters away.
“[The Telstra management team] were the ones who did the really fantastic presentation,” he says.
“I thought, ‘these guys are focused, they know what they need to do and they are actually doing it because I am feeling the benefit in my own little world’.”
Pohl made his initial investment in Telstra last year, but the recent retreat in the company’s share price has had him upping his exposure. And he remains confident on dividend growth, despite a payout ratio that stands at a little over 100 per cent.
“We are optimistic on how earnings and cash flow will be distributed, and we still think there’s a decent return to be had.” He points to the fact that a lot of the costs associated with running the old network will be assumed by the NBN.
“If I were running an SMSF, I would be investing in Telstra now.”
Pohl is passionate about managing money in the most effective way for his clients, which for him means empowering his team to take investment opportunities when they present themselves, rather than being restricted by benchmarks, which emphasise relative rather than absolute returns.
On Tuesday Pohl launched the EC Pohl & Co Mid Market Opportunities Fund. The fund focuses on stocks outside of the ASX top 50 and which, in an industry first, will also allow for up to 40 per cent of its assets to be invested in private companies which have the intention of listing on the ASX. The minimum investment is $20,000.