Investment advice from the experts: Tom Hogg
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Tom Hogg with partner Merrilyn Honey ... Hogg believes it’s better to wait until the market has settled into a clear direction rather than try to pick the bottom. Photo: Josh Robenstone
Tom Hogg turned 86 in 2011 yet still works three days a week as a private client adviser with the JM Financial Group in Melbourne.
He has been working in stockbroking for the past 40 years after being recruited to Roach & Co by the late Ian Roach who, as chairman of the Melbourne Stock Exchange, drove the merger of the state exchanges into the forerunner of the Australian Stock Exchange.
Wealth of experience
Before stockbroking, Hogg served in the navy during the war, did a commerce degree at Melbourne University, and spent 20 years working at James Miller, a listed rope and twine maker, which was started by his great-great-grandfather who emigrated from Scotland.
Today, he gets to the office in time for morning meetings, fits in a morning swim on working days; and plays golf every Friday at the Peninsula golf club in Melbourne’s sand belt just outside Frankston.
Old-school
There’s no loud talking or fist pumping in the trading room with Hogg. He is from the old school of stockbroking: polite, conservative, quietly spoken and he relates well to people.
He has managed to make the transition from the 1970s to the present. This meant swapping from a time when there were separate capital city exchanges; shares were bought and sold face-to-face on a trading floor; prices were on paper rather than on a screen, and there were no computers to produce data. Today, he and other stockbrokers live in an era of instant information, rapid trades and much larger turnovers.
Timeless elements
Some things haven’t changed: there are still a lot of companies and it’s still sometimes hard to get reliable information from them, he says. One of his rules, based on his own experience in the industry, is not to believe everything companies tell you – especially about the timing of new ventures.
While there now are many more derivative products such as futures, options and contracts for difference, the stock exchange list still has all those resources companies and the old, reliable listed investment companies such as Argo and Australian Foundation, which Hogg suggests for first-time investors with a limited budget.
Essentially, he buys quality stocks for clients with an emphasis on a decent income stream. He likes to buy shares that investors can hold for the dividends – even if the sharemarket declines.
“These stocks seem to weather the storm better,” he says.
No need to rush
He has a few rules of his own. One is not to rush in and buy too early. Hogg believes it’s better to wait until the market has settled into a clear direction rather than try to pick the very bottom. There’s always the chance a client will experience that regret factor of buying early, only to look stupid and find they could have bought at a better price.
Hogg always likes to have a few small-cap stocks in his portfolios: he currently likes several biotech companies. Similarly, he likes oil and gas stocks because they can potentially gain from the shortage of energy sources.
He finds himself generally avoiding stocks in the insurance sector, isn’t keen on building-product companies and doesn’t like the transport sector. (“Who’d want to own Qantas?” he asks.)
He says some clients simply rely on his judgment or suggestions while others prefer a regular – even daily – exchange of views.
Hogg says it isn’t necessary to be friends with clients but he has found that many people who start out as clients become close friends. This is almost certainly so with clients who have had their small portfolios turn into seven-figure amounts.
Many people have seen wonderful growth, Hogg says, though he adds, self-deprecatingly, “there’s always a bit of luck in it”.
Barrie Dunstan Smart Investor
