114: Bellmont Securities' Michael Block – The Michael Block Roadmap to Investing

Conversations with Institutional Investors

Michael Block is Chief Investment Officer of Bellmont Securities and Adjunct Industry Professor at the University of Technology Sydney (UTS), where he helped establish the UTS Anchor Fund. The UTS Anchor Fund is a live investment portfolio managed by students to give them hands on experience with managing portfolios.

In this episode, we take a look at Michael's extensive career in investing, spanning roles with Future Plus, Nambawan Super, Australian Catholic Superannuation & Retirement Fund and now Bellmont Securities, and discuss the lessons learned during this time and how you can condense this experience in a course for students. We talk investment theory & philosophy, impact of regulations, meeting your investment heroes and the Michael Block Roadmap to investing. Enjoy the Show!

Overview of podcast with Michael Block

02:00 I’m just a nerd with a PC, interested in investments

05:30 I once was an analyst working for the government looking at money laundering, where I saw the bust of a bikie gang and they confiscated a live alligator

08:00 The greatest accolade I can have is that the people I’ve [mentored] are now achieving in the outside world

09:00 Getting involved with the UTS Anchor fund

11:00 The UTS Anchor fund helps students ‘from go to woah!’

13:00 The Graveyard of Good Ideas – There are many good ideas that super funds can’t do

16:00 A super fund of the future will look massive and passive

17:00 Changes in the wealth space can be glacially slow

20:00 There will never be another super fund that fails the [YFYS] performance test again, because they will never take enough risk for that to occur

26:00 The Michael Block roadmap: 1 Set an age appropriate SAA

27:00 Funds that don’t believe in lifecycle just want to put everybody into a balanced fund. That is lazy

28:30 The Michael Block roadmap: 2 Only move away from the SAA under extreme circumstances

30:00 The Michael Block roadmap: 3 Decide when to be active and when to be passive

35:00 Your time horizon is what matters; LTCM became insolvent but was ultimately proven right

40:00 Super funds are faced with an activity bias

42:00 I rather be vaguely right, then precisely wrong

44:00 I’m a purist so I believe there are only two asset classes: equities and bonds

48:00 Mean/variance optimisation is like driving in a car looking only in the rearview mirror

55:00 On Jeremy Grantham and other heroes

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[i3] Insights is the official educational bulletin of the Investment Innovation Institute [i3]. It covers major trends and innovations in institutional investing, providing independent and thought-provoking content about pension funds, insurance companies and sovereign wealth funds across the globe. The [i3] podcast is available on Apple Podcast, Spotify, Amazon Music, YouTube Music, or your favourite podcast platform.