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What was your worst & best investment?

My worst investment was a small mining company. I was 17 and didn’t know much about the company. I was trying to ride a mining boom. Unfortunately I lost 50% of my small investment.

My best investment was a town house in Box Hill (Melbourne). It was conveniently located near Box Hill Station. It’s capital growth was excellent.

Often our investment mistakes help us learn and make better future investments.

Key characteristics of good Share or Property investments are:

  1. Income/Cashflow – it generates a stable, growing income/cashflow

  2. Location/Market Position – a good location or competitive advantage is important

  3. Hidden Value – Undiscovered value can bring super returns. For property this could be a new freeway or the opportunity to redevelop. For shares this maybe accessing a new product line or market.

  4. Past performance – has it performed well over 5-10 years. This is a guide, however not always a predictor of future returns.

  5. Management – for a Share, how have management performed in the past.

These 5 items are our starting point when selecting an investment or an investment manager. Time spent understanding expected returns and risks is really important.


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