Meet Andy: The 21-year-old who already has a $100k portfolio

Andrew, known affectionately by the team as Andy, is a softly-spoken former Livewire intern and investing die-hard with a passion for picking stocks. 

At just 21 years of age, he's already been investing for more than four years - and as Livewire readers with a few more years on their belts will know, the key to success in the market is time - of which, Andy has plenty. 

He's focused on levelling up his investment acumen through post-graduate studies, reading, and learning from mentors within the industry. 

He looks up to fund managers like Hyperion, Forager, Aoris, Claremont, L1 Capital, TAMIM, and Firetrail - all of which have helped Andy build his investment philosophy over the last four years. 

And ultimately, he dreams of one day opening up an Australian small-cap boutique of his own. 

"There's nothing more euphoric than opening your portfolio up at 10 am and seeing your investment thesis being proven right," Andy says. 

In this Meet the Investor profile, Andy shares how he got started in the first place, some of the investments that have helped him outperform the ASX 200 each year since he started, and opens up about his dreams for the future. 

Investor Profile 

Can you share how you started investing and what your first investment was?

I first started investing on March 6th 2020 as the market started to crash. I was in my final year of high school doing my HSC during lockdowns and my economics teacher introduced me to Livewire. From there, I convinced my dad to put in his first $50,000 into the stock market, the market continued to fall so I convinced him to double down and put in another $50,000 around a week later and from there I spent more time looking at stocks then doing homework and studying for my finals. There’s been no regrets since then, despite kind of flunking my HSC whilst being on an academic scholarship.

With the first $50,000, I chose 10 stocks so there wasn’t just a single first investment. These were:

• Afterpay (ASX: APT) now Block (ASX: SQ2)
• A2 Milk (ASX: A2M) 
• Lynas Rare Earths (ASX: LYC)
• Appen (ASX: APX)
• WiseTech (ASX: WTC)
• NextDC (ASX: NXT)
• Seek (ASX: SEK)
• Wesfarmers (ASX: WES)
• Magellan (ASX: MFG)
• BHP (ASX: BHP)

Over the past four years, I’ve been able to outperform the ASX 200 on a p.a. basis and have never had a negative year which has been extremely rewarding and fulfilling.

How would you describe your strategy and your investment goals?

My strategy has definitely changed over the years. Often people will create a checklist and as they read more and more, new items will be added to that list until you have 50 metrics that no stock will ever be able to satisfy or meet. Because of that, I try to keep my strategy as simple as possible whilst drawing aspects from both fundamental and technical analysis.

I never buy a stock that is in a long-term downtrend (200-day moving average). I always look for a strong balance sheet where possible (quick and current ratio). And on valuation grounds, there needs to be some upside there (anything greater than the ASX 200’s average return p.a of 13.2%).

Most importantly as a sucker for small caps, I need to buy into the company’s story and there needs to be some underlying tailwind or trend. I’ve found watching fundies like Hyperion, Forager, Aoris, Claremont, L1, TAMIM, and Firetrail have really helped me build my investment philosophy and as Benjamin Graham has said to be an investor you must be a believer in a better tomorrow.

My investment goals are simple too, to one day reach a point of wealth where I no longer have to work and can just live off dividends.

Can you share your top five holdings in percentage terms and why you hold these positions?

Rounded to the nearest percentage weighting, my top holdings are:

1. Droneshield (ASX: DRO) - 9% 

It's an unfortunate reality of the world that defence companies will always do well during times of geopolitical tension. I've been an investor in Droneshield since Jan 2021, and the ongoing landscape for a company like Droneshield has sadly only ever improved. I think their product is placed in a sweet spot to where even investors who detest conflict can see the value in their anti-drone technology.

2. Catapult Group International (ASX: CAT) - 7%

As a sports fan and data nerd, Catapult is a company that I love. I was actually introduced to the company through a former coworker at Livewire, and I think they’re the leading player in sports data and analytics and the transition from wearables to SaaS has so far shown promise and has further legs to run on.

RPM Global offers a wide range of IT solutions and advisory for miners across the world. A recent presentation stated they have nine out of the top 10 global miners use their services. They have growing revenue, EBITDA and profit and a solid balance sheet too. Just a fundamentally great business that’s operating in a good industry and niche.

Data centres as a whole have an amazing outlook and everyone knows that. GDC is just another way to play the theme on the ASX along with players like NextDC, Goodman and Macquarie Telecom. They own a 1% stake in AirTrunk and there is a lot of speculation about how much the asset will be sold for, around $10 billion, so I think GDC is a big beneficiary of the potential upcoming sale.

5. Med Advisor (ASX: MDR) - 7%

MedAdvisor is a new holding for me, they provide IT solutions for pharmacies and for patients. They have partnered with 95% of pharmacies in Australia and New Zealand, including Priceline, Chemist Warehouse, and Terry White and also have connections with big pharma like Pfizer, Moderna, Eli Lilly, and Novo Nordisk. They also had a recent announcement saying they would have a positive NPAT for the year, which is a great achievement and they are anticipating continued growth in FY25.

Do you have any investments on your watchlist? 

Dug Technology (ASX: DUG)

They keep winning contracts, the share price has been on a run in the past couple of years and the company has great relationships in the Middle East in the major oil-producing countries.

Most interestingly recently is their product DUG Cool, a data centre immersion cooling solution - which cuts power usage by up to 51%. With the growth and rise of data centres globally and the new strain on electricity grids, I think there’s major potential in a product like this.

Also, super excited about the Guzman IPO and if I were to invest globally, I love businesses like Costco and TK Max that offer amazing value for customers.

What has been your worst investment and what has been your best?

Retail and wholesale investors will remember 2021 and 2022 as the year of lithium and EVs. It just so happens that both my best and worst investments were lithium explorers based out of Argentina’s lithium triangle. Unfortunately, not a 10-bagger but lesser-known Argosy Minerals (ASX: AGY) has been my best performer with a return of over 850%. 

My worst performer has been a much more well-known and at the time hyped-up stock, Lake Resources (ASX: LKE) which I lost over 80% on. This was a time when I got too caught up in the noise and didn’t understand the underlying drivers of mining stocks and commodity prices. Simple yes, but at the time I was completely naïve. 

However, this has been a blessing in disguise because I’ve learnt so many lessons from that period and find that my losers have always been the biggest learning experiences for me as an investor.

Are there any lessons you’ve learnt during this journey that could help others?

1. Whilst a portion of my holdings are speculative or don’t pay dividends, from a traditionalist standpoint, a stock is only worth as much as it will return to its shareholders now or in the future, just like how a property is only worth as much as it will return to its owner in rent.

2. Technical analysis is your friend, it removes emotions from your decision-making. Learn the basics.

4. Taking profit, partial or full, never loses you money. There will always be another company to rotate funds into no matter what stage of the cycle the market is in.

6. Use stop losses, don’t be like FTX. Whether it be a fixed %, trailing or a technical indicator like the 200-day moving average, use them.

8. Always seek new learning opportunities and develop your skills and knowledge. A lack of innovation kills companies, don’t let the same happen to you and your portfolio.

9. And for students interested in investment management, have skin in the game, find your niche and build a track record that you can show to employers.

Can you share a personal passion or ambition you have for the future?

I come from an IT background, so I’ve really been exploring post-graduate studies such as a CFA but my long-term ambition will always definitely be to one day open my own boutique high-conviction Aussie small-cap fund. 

I think there's nothing more euphoric than opening your portfolio up at 10 am and seeing your investment thesis being proven right. But to get there, a lot more work needs to be done - a lot of learning, reading, studying, networking and building those relationships with experts and mentors and people in a similar position to me who want to one day be successful investors too.

Want to share your story like Andy? 

Livewire is looking for investors who would like to share their stories and investment journeys with our audience. If you are interested, head over to this link and let us know.