Interview: A Legend Joins Manward

Alpesh Patel is a hero in the world of investing.

He’s worked with royalty… advised leaders from around the globe… and had his thoughts on investing lead to some truly outsized gains.

After watching our introductory interview with him, you’ll understand why he’s one of the world’s most sought-after investing experts.

Click on the video to watch.

Transcript

Andy Snyder: We’re doing something a little bit different today. Right now I have the very distinct privilege of introducing you to somebody that I look up to, whose accomplishments and accolades are absolutely unmatched. And most importantly – this is huge – who is Manward’s newest contributor. I’m super excited about this.

Alpesh Patel is a dealmaker. He’s worked with the prime minister of England… worked with the queen… worked in the U.S. Congress… hosted a show on Bloomberg. He was a Financial Times columnist and is the author of more than a dozen books. And probably the thing that attracts me the most to his resume is he’s just a leading expert and, really, a believer in the idea of entrepreneurship around the world. What he’s done here is absolutely huge and what he’s still doing is absolutely huge.

Just to wrap it all up… He’s probably one of the greatest and most sought-after and, really, most trusted economists on the planet, on a global scale. So with that, Alpesh, it is my absolute pleasure to introduce you to Manward readers and welcome you to Manward.

Alpesh Patel: Thank you so much. What a wonderful introduction. I will be replaying that to my family members. You also made me feel a little bit old. I think I peaked at a younger age, and it’s a lovely when somebody else mentions your accomplishments because it does remind you that all the hard work was worth it.

Andy: Absolutely. And just, again, looking at your resume, it’s clear that you’re not afraid of hard work, and that’s why we brought you on and are very excited to start working with you.

So just in the simplest terms… detail how you got from back then to where you are today, what the things drive you and just how’d you get here?

Alpesh: Well, for me, I’d always been fascinated by investing because I liked the idea of all these other people working incredibly hard in these companies in which I’d be a shareholder.

So this started off when I was at school because I didn’t come from a privileged background. There was no silver spoon in my mouth, and I wanted to find a way of helping my family. And so I thought, “Well, look, I’m at school. There’s not much I can do. But one thing I can do is try and save a little bit of money and invest in stocks.”

And that’s where that whole idea came up, because I thought, “If I own shares in these companies, then the people who are working in those companies are working incredibly hard to give me a return.”

And whilst I trained thereafter to become a lawyer, what we in the U.K. call a barrister, my investment outlook had always been global, very much U.S. focused. Then through a string of events after I qualified as a lawyer, I thought, “You know what? I love this investing world far more.”

So I left practice as a lawyer and I was partly exposed to the world of investing even more so when I was working in the U.S. Congress back in Washington, around the mid-’90s. So by then I was still right at the end of my educational career. And the internet was just starting to take off in the U.S. It was around the time Al Gore discovered it. People are old enough to remember that. And so that led me to deep diving into using the internet as a research tool and getting more and more information. Again, making my life easier as an investor.

I came back to the U.K., and by which time I decided, “Look, if I want to invest full time and eventually set up a hedge fund and an asset management company, I better meet the world’s leading traders and investors.”

So I approached the Financial Times with an idea for a book. They agreed as long as I got some big names, which I did, most of whom happened to be American.

And that then opened up the doors. It meant I got great mentoring, advice and information from these people. The Financial Times then said, “Look, would you like to do a follow-up, but focused on the internet part of trading and investing, and that began book No. 2 of I think we’re at number 16 or 18 books, and they’ve now been translated into some eight languages.

Around this time, the global head of Bloomberg happened to watch an interview I was doing on CNN. She said, “Would you like your own TV show? You’re really good at explaining this stuff to people in simple terms.” And it snowballed from there. CNBC saw me and they said, “Look, would you like to cohost with us?” So I was doing that. And the BBC to this day. I’ll do the newspaper reviews where I’ll interpret global, not just economic events, but actually political ones as well.

In the middle of all of that somewhere, I became a visiting fellow at Oxford University, where, again, I was spotted. It was right place, right time. (It’s a bit of a Forest Gump kind of life that I’ve led.)

I was researching behavioral finance, where investing meets psychology. And this was before the Nobel Prize in economics went to two American psychologists, but they got it in economics. It was the first time it happened. And I think it was around 2002, roughly around then when they got that. So that was really exciting time to be covering that area at Oxford and also at the same time, writing my column in the FT, sharing those insights.

So this whole new passion then arose, which was not just investing for myself, but actually giving people the absolute best top-tier insights from academic research and the practicalities to make them better investors. That then became the huge passion and communicating that, you mentioned, as a contributor to the Financial Times, Bloomberg, CNBC. And this, is in a way, a continuation of doing that.

And then back in 2005, I set up my asset management company, which was an obvious thing to do. But really the passion remained educating others to be able to empower themselves.

I’ll close with this. Again, somewhere in that, because I got noticed, because of the profile, I’d won competitions at FT, the U.K. government asked me to find the company’s outstanding companies for the government. And I’ve continued doing that over the last 15 years. My official title – it says that on my business card – is dealmaker. So that is my role is to make those deals, to get those tech companies into the United Kingdom as well. All those that have a global outlook and most of my holdings tend to be U.S. tech companies. Well, not just tech, but U.S. companies.

Andy: Sure. So that’s a good segue. In one of your earlier, I think it was one of the earlier Financial Times columns, you mentioned your bullishness for American equities, where does that come from?

Alpesh: Well, the funny thing was that was the very first column and it was the first paragraph of the first column. I’ve dug it up recently and I’ve got a whole bunch sitting in my office. And I’m going to pull out some of them because it’s great to look back.

It was back in 1999, it was September 11, 1999, when I said I’m advising people to invest into U.S. equities. And you’ll remember, well, anybody can look it up now, from 1999 to this day, how, of course, U.S. equities have done as a general rule compared to pretty much anywhere else in the world.

And it really come from a deep dive of the research. I’m really very much data-driven. I do not like speculating. I do not like gambling. And the reason for that is my money is being invested. And I treat all information I give as if it’s my money being invested for my retirement and my son’s inheritance.

So when I’m looking at companies, I’m looking at them with a view that this data is a CV, which is being put in front of me, this is a resume, and they’re going to be custodians of my son’s future wealth. Therefore this company better be darn good, because I’m interviewing them and deciding whether or not I should give capital to them.

So the first thing I do is I make sure I’m looking through 9,000-odd equities. And then I really drill down on the numbers and make sure those fit what the research says they should fit. And I don’t think many people, I know some, but I don’t know many, who do it that way and with that level of diligence, with that perspective, that this is my future, which is linked to this. And also the other thing is very definitely… I don’t do the whole, “Oh, I’m just going to buy this for the next seven years.”

How can you be married to a company today for the next seven years when the world changes so much? And equally, I don’t want people to trade their investments. So we look at a 12-month holding period because, again, the research shows that’s roughly a good period.

Now, of course, in hindsight, optimally, it might be 11 months and five days, or it might be 12 months and 13 days. But we don’t want to get too granular and too fixated on all the data either because we want to go out and smell the roses.

And let’s say we made 1% less than we might hypothetically have done with perfect hindsight and a crystal ball. Well, that’s fine. We’ll take 1% less because we spent so much more time with our family and then so on.

So that’s really been the perspective on all this. It’s been very much that data-driven. And that’s where that first column came from and all the subsequent ones… I was writing for the FT until I set up the asset management company.

So it was five years and it was a weekly column. I might’ve missed a week or two with, I don’t know, vacations or something. So that would be, well, five times 50, about 250 odd columns, which the FT then put into a book as well. So that was nice, because, guess what? You’re repurposing your content. You’re reaching a new audience. And that’s what this relationship’s about. We are able to share that research and reach a new audience, having tested it for the last 20 years and have whole groups of people really delighted with, all the output that was going out there from my side.

Andy: So that’s a great way to summarize it – we’re reaching a new audience together. I’m super excited to get you in front of our audience. I think this is going to be a great relationship. Before we go, just real quick, your overall comments on the market today, just bullish, bearish, just roughly, what are you seeing?

Alpesh: The one thing we know for sure is the market’s going to go up, or it’s going to go down from a day-to-day basis. And on a daily basis, it almost sounds random. The whole “efficient market hypothesis.” Okay. Now I can sit there on the BBC and if they ask me, “Where do you think the market is today?” I can give quite a good, intelligent answer. I’ve got a master’s degree in economics from the world’s No. 1 university, and it’ll sound reasonable as well.

However, when it comes to investing, when it comes to putting my money where my mouth is, I’m not going to gamble whether it’s going to be up or down next month, because then I would have to trade that every month or every day or every week. What I’ll do instead is make sure I’ve got the kind of resilient portfolio that should the market rise, of course, I and everybody else looks like a genius and my stocks go up. But most importantly, it’s not about the money you make when it goes up, it’s about the money you keep when it falls.

When the market falls, my stocks shouldn’t fall as far and that’s where the research comes in. They shouldn’t fall as far, so we get to keep the money.

A classic example of that was during COVID. When that became this massive global phenomenon around February of 2020, when the market really started falling for the subsequent month, don’t forget everybody’s portfolio fell. Whether it was Microsoft or a Costco, they both fell. They all became highly correlated to the downside.

What we did was we thought, actually, the falls are going to last longer. And let’s be honest, I would’ve thought pretty much everybody thought the fall was going to last longer than a month. Does that mean we’ll then cash in? No.

So wait a minute. You thought it was going to fall, but you didn’t act on that? No, we have the kinds of stocks we knew would be resilient to falls and should the market turn and rise, they would benefit. So what happens? 12 months later, I’ve got people calling me in who follow me saying, “Hey, you’re a genius. How did you know it was going to go up?” I said, “I didn’t. All I knew is it can go up and it can go down, but we’ll have the kind of stock where we’ll win either way.”

Our job is to make sure we win in either circumstances. And I sleep easy at night. As I get older, I know the importance of being able to sleep easy at night, not trying to chase the market, not trying to gamble, not trying to speculate.

All of that said, put all that to one side. Where do I think we are with the market? Of course, it’s expensive at the moment. But the amount of capital which is being put into assets, including the stock market at the moment, if we put a gun to my head, I’d say, “Yeah, in the next 12 months, I’d expect it to be higher, but you know what, if there were a fall in the next 12 months, I’m still comfortable, because the equities I’ll have, they won’t be gravity defying, but I’ll still do fine because you’ve got to measure it over the number of years and make sure you get those excess returns.”

And, quite frankly, it’s how I won competitions on Bloomberg and in the Financial Times.

And it’s how a boy with no family connections in finance was able to go from having no connections to setting up an asset management company, because you let your reputation and your picks in the strategy and the methods you use to do the talking.

And that’s what gets you published by the FT. Yeah, it’s got to be quality. I’m not sounding arrogant. It’s just to say, what frustrates me is so many people get it wrong. They think it’s all about tipping and some inside information. No, it’s about as a hedge fund, I see a lot of data and information. It’s about taking all of that in, but knowing what 1% is important and then telling people, “I’m going to save you a lot of time. This 1% important and this is how we’re going to position ourselves.”

Andy: Very good. Well, you said that’s the kind of logic and insight that gets you published in the Financial Times. It’s also the logic and insight that gets you published with Manward Press. So we’re super excited to have you here.

Readers, now you know why I’ve been so excited. I just can’t wait to bring more Alpesh to you. He’s going to be writing for us, delivering services for us. So we’re super excited.

Alpesh, thank you so much for taking the time to join us today. And readers, viewers, look out for more. There’s a whole lot more where that came from. So thank you very much.