In a Good Investing Podcast world first we speak with both Investment Director, Nathan Parkin and Portfolio Manager, Andrew Wilson about all manner of market and company insights. 

Andrew digs deep into the commodities cycle and explains why we are now well past the peak.

Andrew also gives a lithium-oriented wrap which simplifies the almost unsimplifiable!

Nathan explains why M&A cycle is upon us and how the Fund’s investment process places it in a good position to benefit. Then under the pressure of the Ethical Partners 60 second Hourglass, each of Nathan and Andrew mentions one company that looks very interesting at the current time. Sometimes singles to fine leg are just fine on your way to building a good innings. 

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Brent Sanders has spoken to almost one million people over the last 30 years on harassment, sexual crime and bullying in schools, universities and the workplace. In Ep#24 we speak about the differences between harassment and bullying and in what circumstances, and exactly how, the legislation applies. Do customers and clients come under the definition of workplace? Yes they do. Does the workplace include after work drinks at the pub? Yes it does. Brent talks about the strategies and approach managers can take to protect employees. He also talks about how sexual harassment can evolve into sexual assault. An assessment of human rights forms an important part of our investment process. A workplace free of harassment and bullying is a basic human right for everyone. But to recognise it and assess it, first you need to understand it. Brent Sanders helps us do just that.

Highlights

1.30 An important part of the Ethical Partners Opportunity and Risk Assessment (EPORA) includes an assessment of human rights under which harassment and bullying forms an important part. But to recognise it and assess it, first you need to understand it. 

1.59 Rio Tino's Everyday Respect Report finds harassment and bullying is widely suffered throughout the company (www.riotinto.com). Ethical Partners engages with a wide range of companies on the topic.

5.00 Most workplaces Brent speaks to recognise that sexual harassment remains the most problematic form of harassment.

6.10 Brent's background. After a long career in the police force Brent started his own consulting business and has connected with almost 1 million people (not quite that many but after this Podcast he may get from 900,000 to 1m... maybe).

10.10 Every person in the workplace is entitled to be offended, is entitled to raise a concern and is entitled to have that concern listened to and assessed.

13.15 Work policies that refer to the "workplace" but that definition is broad. The "workplace umbrella" should provide protection for employees from inappropriate behaviour by customers, clients and outside the office under certain circumstances.

23.00 The tests that can be used in how to assess the impact of behaviour outside of work on the workplace itself.

24.45 What is the moral and ethical obligation of managers and others to call out inappropriate behaviour?

25.55 In some circumstances there is a legal obligation to act.

27.00 How social media fits in and what is a "passive" post? The Israel Folau example.

32.01 The fascinating difference between bullying and harassment?

36.05 The definition of bullying. Why does the behaviour need to be "repeated"? If it is not repeated, the behaviour may still be inappropriate, even it doesn't fall under the actual definition of "bullying"

43.06 The David Jones case - organisational liability. The new proactive requirement for companies.

48.02 Going from civil to criminal offences. From bullying to assault. From sexual harassment to sexual assault. Examples.

52.52 Each State and Territory has legislation that deals with unlawful sexual assault. Consequences are criminal in nature and involve the possibility of imprisonment.

Brent's podcast: "Consent and Consequences" https://podcasts.apple.com/au/podcast/consent-consequences-with-brent-sanders/id1562242401

Brent's website: https://www.brentsandersconsulting.com.au/

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This is the incredible story of a leading Hollywood Producer trading in one lifestyle for a very different one. What motivated Scott Neeson to sell his LA house, boat and other possessions to start up a charity in one of the poorest and most under privileged countries in the world? What was the vision? Well, it turns out there wasn’t one.  What there was though was a selfless drive to help others - to invest in the next generation of Cambodians.  The first graduates of the Cambodian Children’s Fund (CCF) first school intake are now graduating from University. This is a story of leadership, resilience, passion and practical business building - a must-listen for all business leaders.

Donate to CCF

Watch the 'Fix You' Video

Highlights

2.05     Throwing out the usual format

2.40     What is Cambodian Children’s Fund (CCF)? Scott goes from Hollywood to building schools for Cambodian children

3.45     Measurable outcomes. From the first 200 children…. to 2,000 kids in school now. Plus the model has grown to include healthcare and other programmes

6.00     The Neesons emigrate to Adelaide from Scotland in the 1960s. Scott talks about his upbringing

7.50     Working as a projectionist at a drive-in cinema. Then working for Greater Union… and the move to Sydney

8.50     Moving to Los Angeles with 20th Century Fox. Appointed President of International in 2000. Marketing was a key strength – understanding what type of movie would sell well to whom and where

10.50    Favourite movie: Braveheart. Working with Mel…

11.50    Having it all… and the “mid life review”. Listen to the outcome of that review…

14.30    Scott signs with Sony but has a break before starting the new job. He goes travelling…

15.45    Visiting Cambodia. Trying to help… but not knowing how

17.20    Visiting the Stung Manchay rubbish landfill for the first time

19.30    Trying to transition between Hollywood and Cambodia. Needing to go all in…

20.25    The “Great Garage Sale”

21.25    The sale of Scott’s LA house funds the start up of CCF. Then managing growth in the first five years

23.20    “No great vision”

25.00    Transitioning away from poverty and the historical context.

26.00    Trying to “not judge”

27.45    How Scott tries to deal with stress

29.00    Where does CCF go from here? Succession planning. Sustainability. Governance. Transparency.

30.00    Expansion. Replicating the model in other countries

32.45    Scott’s keys to leadership

34.45    Scott’s favourite book - The Snow Leopard by Peter Matthiessen

37.00    The “either/or” game

39.00    How you can help – link above

40.10    How many of Scott’s Hollywood mates visit? (not many…)

43.14    Mental note: Don’t wear white linen

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Dr Jason Kaplan is a cardiologist and physician who takes a holistic and preventative approach with his patients. Dr Jason Kaplan speaks with us on a broad range of topics relating to overall health and well being. This is an important area within the Ethical Partners Opportunity and Risk Assessment (EPORA) used in assessing companies as a part of our investment process. In the discussion we talk about heart disease and we take a deep(ish) dive into key risk factors (cholesterol, age, genetics and others). Jason alerts listeners to a very simple and easy to access test which is critical in detecting the early signs of heart disease. We delve into an area our Sustainability Team has done recent work on - Diet and Nutrition (including what to choose on that next corporate lunch...); obesity, and also the ideal exercise regime and which supplements are worth taking.

Highlights

0.50 The link between health and wellness and good investing

1.50 Dr Jason Kaplan bio

2.36 Summary of this exciting episode

3.40 Why preventive cardiology?

5.30 Arterial disease - what is it and what is the impact

7.40 Unstable arterial plaque and inflammation and why that combination is so dangerous

11.00 Arterial disease is progressive and starts early... earlier than you may think

13.40 Start thinking about your cardiac health in your 30s... life's "simple seven"

16.16 The shortcomings of the ten year cardiovascular calculator

19.35 HDL, triglycerides, LDL cholesterol, ApoB, Lp(a) as risk factors

22.15 The folly of standard and acceptable "ranges" for certain blood components

31.55 The difference between men and women for heart disease

33.40 Coronary Calcium Scan test and why it is critical to get one earlier than you may think... and an opportunity for employees?

37.20 Diet and nutrition - relevant for employees, consumers and community health - building on some of the work done by Ethical Partners' Sustainability Team

41.10 Pesco Mediterranean diet and its benefits... and the Blue Zones

45.30 Ideal carbs, fat and protein mix... animal protein vs plant based protein

47.10 On the corporate lunch circuit.... what to order!

48.26 Obesity... 60-70% of Australian adults are overweight or obese... the role of diet and exercise and the right balance

50.40 The ideal exercise regime... time, type, frequency and the impact on longevity

56.30 Defining "stress" and looking at its impact

59.50 Supplements... Omega 3, plant sterols, vitamin D, magnesium... which can be useful and choosing "the plate" over "the bottle"

For the work on obesity, health and wellness conducted by our Sustainability team pls see our website https://www.ethicalpartners.com.au/post/the-obesity-collective-and-pwc-ethical-partners-case-study

and

https://www.ethicalpartners.com.au/post/the-access-to-nutrition-initiative

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We complete 2022 with a special edition of the Good Investing Podcast featuring Investment Director Nathan Parkin. Nathan walks us through the Ethical Partners approach to investment in one of the most challenging macro environments for many years. We review the year, neatly broken into four very different quarters. Nathan speaks about how the second quarter threw up opportunities to own the very best companies in the market – opportunities that come around only once a decade. Nathan also gives us unique insights into the differences between investing in a rising inflation environment vs the low interest rate environment of 2018-2020. He also translates the macro environment to what it actually means for companies on the ground. We talk about excessive pessimism and why when that occurs it can actually be a good time to invest. We break down inflationary drivers and pinpoint why on balance of risks, the worst may be behind us. Nathan outlines key company positions and how the portfolio is positioned going into 2023 including 1) Why the portfolio is overweight consumer discretionary companies despite the consensus expectation being that consumer spending will slow next year and 2) Why the portfolio is underweight resources.

Highlights

2 mins 33 secs Nathan makes sense of 2022 and talks about “being prepared”

2.57: The investment compass. Key company attributes that feed into the investment process

4.00: 1Q22. Market down substantially in January but recovery into quarter end

5.50: The market construct looks very different now. Resources have a much higher weighting

6.30: 2Q22 we looked at a number of quality factors. What does “quality” actually mean when assessing companies

7.30: Positioning at the start of CY22… overweight resources / materials. But have been down weighting and upgrading the quality of the portfolio over the course of CY22

8.03: New companies we now own that we didn’t own a share of at the start of the year – what are they?

9.15: A rare opportunity. You don’t get many chances to upgrade the quality of the portfolio at the right price

10.00: Digging deeper into “quality” attributes – management’s expertise, vertical integration, competitive advantage including company examples – Reece, Wesfarmers, Pinnacle, Breville, Goodman.

14.05: Being a “value-oriented investor” – what can that mean? It can mean buying assets at 50c in the dollar but it can also mean buying companies that can grow but paying a low price for that.

14.39 Company stock prices can fall on heavy volume and rise on much less volume… insights into how to get set in a position

17.20 Investing in a low interest rate environment vs investing in a rising interest rate environment – explaining the very different approach required

21.05: Companies that were disciplined when interest rates were lower are very well placed today given the optionality they have to grow

23.10 Why reporting seasons are important… the market’s (and fund manager’s) report card. August 22 reporting season was actually quite solid

25.49 Converting the macro to what companies are actually seeing on the ground… expectations of a recession but it is not being seen… yet

28.40 Extreme pessimism today... thinking back to 2012 as a comparable period, Markets are often too pessimistic… and too optimistic given human psychology... and therein lies the opportunity

34.03 USA visit in Oct 22 seeing companies… key takeaways and learnings. Generally we got the impression that many companies are in a better place than the market is giving them credit for… and while there will be a slowdown (we are sure of that) it is all about how companies are priced moving into that as to where the value lies

36.50 Components of inflation… where to from here? Consumer end demand softening, input prices growing at a lower rate, China exporting less inflation, supply chain pressures easing, wage inflation still coming through but the global population is becoming more mobile again… all points to (on balance of risks) of inflation increasing at a decreasing rate

43.50: Discipline is back. And that is a good thing. The market can climb this wall of worry. Summary of the portfolio positioning for 2023.

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This is just a short preview of a special edition of the Good Investing Podcast featuring Investment Director Nathan Parkin. Nathan walks us through Ethical Partners approach to investment in one of the most challenging macro environments in living memory. We review the year, neatly broken into four very different quarters. Nathan speaks about how the second quarter threw up opportunities to own the very best companies in the market – opportunities that come around only once a decade. Nathan also gives us unique insights into the differences between investing in a rising inflation environment vs the low interest rate environment of 2018-2020. He also translates the macro environment to what it actually means for companies on the ground. We talk about excessive pessimism and why when that occurs it can actually be a good time to invest. We break down inflationary drivers and pinpoint why on balance of risks, the worst may be behind us. Nathan outlines key company positions and how the portfolio is positioned going into 2023 including 1) why the portfolio is overweight consumer discretionary companies despite the consensus expectation being that consumer spending will slow next year and 2) why the portfolio is underweight resources. Full episode out soon.

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Bronwen is the highly respected leader of Zenith's Research team. Bronwen walks us through her upbringing and how she made her way into investment research, via being selected in the ballot to work in the USA. Bronwen talks to us about the research process, balancing the short and long term, common investment manager mistakes and how manager research has changed over time. One such change surrounds how a manager's ESG credentials are assessed - advisors and end clients are demanding more information and Zenith is providing it. Bronwen also speaks about how to keep an entrepreneurial focus, her passion for Guide Dogs and "Pawgust", The Sisters of Resistance and being ahead of her time in achieving work/life balance.

Highlights
2 mins 18 secs      Investment manager research and consulting 101

6.38                       Investment research report evolution

7.27                       Increasing importance of ESG in manager research

10.41                     Science, teaching or a job in finance at National Mutual?

17.57                     In the ballot to go to the USA

20.13                     Leadership and the importance of having a good boss

25.00                     Big picture changes to manager research over time

26.11                     The review process in detail

33.10                     Trends of the future

36.05                     Greenwashing

42.00                     Achieving the balance

44.10                     Pawgust... August

47.40                     Keeping the entrepreneurial approach

49.00                     How to work out who to hire

51.57                     Growth for growth's sake

53.30                     The Sisters of Resistance

59.00                     Either / or

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Dean is the Co-Founder of Ownership Matters. He is the author of numerous opinion pieces, regulatory submissions and speeches and is a well known media commentator on governance issues. Dean is known for his sharp intellect and insightful assessment of annual and remunerations reports. Dean gets behind the numbers and is not shy in pointing out when something doesn't look right. Nathan Parkin, the Investment Director and Co-Founder of Ethical Partners speaks to Dean about how capital raisings work - what is fair and what is not fair and why Australia has one of the most liberal regimes in the world. The Director's Club is discussed - Dean makes reference to his ground-breaking report, "Many are called, few are chosen". Dean and Nathan then discuss the level of CEO pay and the various machinations around short and long term incentives. This exciting episode is timed for Annual General Meeting (AGM) season which is underway in Australia.  

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In Part B of our discussion with Andrew Schwartz, we dig a bit deeper into the emerging Built to Rent (BTR) sector in Australia. The BTR Impact Fund is an Australian first with a growing pipeline. Completed assets will have in-built sustainability objectives which will create better outcomes environmentally but will also appeal to certain segments of the market. Andrew also takes us through Qualitas' proprietary ESG scoring system and how it relates to project selection. We find out what keeps Andrew up at night, get answers to our "either/or" quiz and Andrew touches on a potential topic for a future episode...the parallels between flying a turbo prop twin engine Cessna and being CEO of a Funds Management company... Ethical Partners owns Qualitas shares.


2 min 00 secs Australian first - BTR Impact Fund
7.20 End consumer target market
8.55 ESG scoring system
13.00 Most important aspect of leadership overlooked
14.12 Keeping the entrepreneurial culture
20.56 What keeps Andrew up at night
26.25 Either / or?
26.55 Which Top Gun?

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