About Me - Infinite Nuance

Thirty Second Intro

Hey, I’m Sean. I’m a converted investor who realised building businesses & products is much more rewarding than screening thousands of companies, looking for the best one. My special interest is in struggling companies. You know the saying:

“All happy families are alike; each unhappy family is unhappy in its own way.”

This is true of companies and teams too, and there is nothing that drives me faster or further up the wall than wasted potential. Removing limiting factors has become a career focus of mine.

I regularly meet people from the internet for lunch or coffee, so if you’re in Sydney please reach out. You can reach me at sean (at) infinitenuance.com or on Twitter @10footinvestor.

The Long Version

I grew up in Townsville, Australia, and earned an honours degree in psychology before moving overseas in 2014. I lived in Fiji for three years, before returning home to continue working in finance.

My investing journey began in 2008, pretty much at the trough of the GFC. Not understanding global finance, I couldn’t understand how subprime loans in the USA would affect Australian business. The first stock I ever bought was Macquarie Airports, which I followed with investments in Commbank, Wesfarmers, Stockland, Rio Tinto, and BHP. Through ignorance I made a directionally correct bet for roughly the right reasons and did very well in subsequent years. Emboldened by my genius, I went into small caps and mining services in 2011-2012, lost a lot of money and gave back most of those gains.

In 2012 I graduated with honours in psychology. Broadly, I thought university was a joke and wanted a Real Job. I worked as a labourer at a scrap metal yard until a friend suggested I contribute to The Motley Fool, which was just starting out in Australia.

The Foolish Years

I freelanced for The Motley Fool from 2013-2018. I took advantage of the remote life and lived in Fiji for three years. That was my first exposure to emerging markets, and I became very interested in the human talent that is totally underutilised because of a relative lack of opportunity.

The first properly good call I made as an investor was the end of the iron ore boom in 2014. In 2013-ish I’d started buying iron ore stocks like Rio and some juniors like BC Iron. Global iron ore demand was growing ~4% per annum, prices rose to >US$100 due to a mismatch in supply and demand, the AUD was US$0.80 and falling, and miners were printing obscene amounts of cash. I made ~100% of my purchase price in one year in dividends from BC Iron.

The industry ramped up production to take advantage of high prices. BHP, RIO, Vale flagged ~30% increases in output within a year, and juniors were aiming to double production. I sold. The rest is history. Iron ore went to $40, the industry went through a massive cost structure reset, Fortescue bonds were trading at 50 cents and most of those junior miners don’t exist anymore. (Writing this in 2021, it is satisfying to observe much stronger capital discipline in the industry today).

My horizons broadened and I grew interested in technology businesses, food, and healthcare. I read industry and labour regulations, Basel III, and the usual investing books. By 2016 I was growing bored and disillusioned. Over the next two years I watched a significant amount of very strong talent leave Motley Fool for other opportunities. I thought, and still think, that it was nigh-criminal from an organisational perspective to let these people get away. Australian readers will recognise most of their names: Owen Raszkiewicz (Rask Finance), Matt Joass (Maven Funds), Claude Walker (A Rich Life), Andrew Page (Strawman).

That was the first time I recognized that it is very difficult for organisations to facilitate proper careers for their most capable staff, and it’s an observation I’ve taken with me everywhere since.

The 10footinvestor blog

By early 2017, freelancing was rote and stale. I started an anonymous blog, 10footinvestor, to push myself further and focus on more detailed research without fear of sanction from either my employer or readers. My goal was to only buy stocks where I had never read any coverage of the business, and track my returns against both the ASX200 and an absolute hurdle of 8% p.a. (The final return of that portfolio was 7.3%p.a. with an average of 30% in cash).

Shortly after starting that blog, I stumbled across a group of companies named after pirates – Henry Morgan (ASX:HML), Benjamin Hornigold (ASX:BHD), and John Bridgeman (NSX:JBL) – that greatly concerned me.

The apparent contradictions intrigued me. To give a few examples of things that I saw:

A company publicly engaging in behaviour where its prospectus specifically says “we are not able to engage in this behaviour”
A fund talking about its views on macro markets, Mexican Peso etc, when all of its assets were in unlisted businesses, and the overwhelming majority of reported performance was driven by mark-to-model on a portfolio of Level 3 unlisted assets
When both sides of a transaction are reported differently (e.g. Company A reports selling 100 shares to company B at $1, Company B reports buying 87 shares from Company A at $1.30)

10footinvestor wrote a series of reports on the Pirate companies that highlighted the potential for incomplete disclosures, inflated asset valuations and various other fun miscellanea. You can read this corrective disclosure to the ASX to get an idea. In my view the behaviour was completely egregious (I had never seen its’ like before, although I have certainly seen some since!) and I was pretty forthright in my description. I’ve been told that I hold the unofficial record for the number of “f- words” quoted in the AFR.

You can read some of the media coverage here:

In 2018, a group of Benjamin Hornigold (ASX:BHD) shareholders led by Gary Miller, Sulieman Ravell, and Michael Glennon (assisted by law firm Corrs Chambers Westgarth and myself) applied to the Takeovers Panel to reverse a related party takeover bid. My research formed the foundation of the application, and The Panel found that the bidder had improperly used a lock-up device to reduce the attractiveness of BHD to alternate buyers and ordered the reversal of the lock-up device.

Messrs Ravell, Miller, and Glennon subsequently rallied enough shareholders to vote out and replace the Pirate directors. Thanks to our efforts, BHD was able to recover ~$7m for its shareholders, exit suspension, and return to trade. Shareholders were able to realise approximately a third of their assets (all that was left). You can read more about that here:

Of the other two companies involved, Henry Morgan and John Bridgeman, both have since been delisted by their respective exchange operators. In late 2022, I published the definitive version of my part in this story here:

The End of Henry Morgan

I consider the work I did here to be the dividing line between my amateur and professional careers.

The Simply Experience

In 2018, a friend reached out to me on Twitter and encouraged me to apply for Simply Wall St. The job was building “robo” templates for Simply Wall St News. I met the Head of Growth, Adam Hejl, and the CEO/Founder Al Bentley. Fortunately, they offered me the role, I said yes, and it was an excellent professional decision. Later, Al took a chance on me and I became Content Lead, a position I held until I left.

Wait, but aren’t those robo articles really bad?

No. To view them as “bad” is to misunderstand the purpose. The purpose is to provide structured, timely information in an easily accessible format to investors. If you want to know the ownership structure of XYZ company without calculating it yourself – there’s a Simply Wall St article for that. If you want to know what analysts are forecasting for next year & if the forecasts have changed – there’s a Simply Wall St article for that. Yes, they are “robo”, but you know what you are dealing with and you get the information fast, in an attractive format, with no hidden agenda, literally for free. Simply Wall St doesn’t recommend or promote stocks, and the only way revenue is generated is via individual subscriptions to the analysis platform (this may have changed since I left).

The numbers don’t lie. When I left, the articles attracted well over ten million unique readers a month just in the USA. Many of these were repeat readers. The majority of readers read each article to the end. Simply Wall St is one of the largest financial publishers in the world, and the information is free. Not bad for robo, eh?

Writing algorithmic articles was extremely interesting because it explicitly forces you to assess base rates across an entire universe, not just in a single industry or geography. I learned a lot there, and when they made me a manager, well, that was a learning experience too. Becoming explicitly responsible for the process that produces the outcome, with limited time for direct output myself, was very interesting and formed the genesis of this site.

What were your main takeaways from Simply Wall St?

Work with people who are more talented than you are.
Put yourself in a position where serendipitous exchange of ideas, collaboration, and the cross-pollination of skillsets leads to magic (1+1 = 3 moments).
The best type of management is facilitation. Once the team understands its role, the best thing management can do is focus on facilitating the team’s ability to produce good work, i.e. generally getting out of the way and spend your time removing roadblocks, coordinating dependencies and so on.
The success of an organisation depends not just on its ability to attract talent, but to apply it effectively and with limited frictional loss.
Org structure and processes must be continually reworked to avoid spiralling bureaucracy and maintain speed of iteration.
- The concept of org reworks (a dynamic, shifting organisation, or what I called “good transitions“) should be introduced into the culture & lexicon as soon as feasible. People should understand that they will need to recurrently shift their attention to focus on the area of highest need/impact.
- Offsetting this; the organisation should not change too frequently. If the minimum effective period for delivering product is a quarter, the best versions of that product don’t come until two or three quarters later, when people have had time to think, research, collaborate, and iterate.
- Domain-specific expertise is nontransferable and difficult to replace.
There is a trade-off between process and chaos; the optimal mix is in the middle. Too much chaos and you lose the ability to coordinate and to apply resources to pressing problems; too little and you lose the magic I described above.
Every management decision should be approached with a conceptual dial in mind. Are you turning the needle towards or away from chaos? Towards or away from autonomy and creativity? Towards innovation or iteration? What is the optimal mix and what outcome are you seeking with this decision? Why?
(more thoughts on this in The Rebrandening and Management: Infinite Nuance)
“Strategy”, “leadership”, “direction”, “process”, “alignment” are much maligned buzzwords – but you don’t know you’re missing them until you haven’t got them. They become critically important as an organization moves beyond the single product team stage.

I was extremely fortunate to have met Adam and Al, and the team at SWS was outstanding.

The Leveraged Experience

Following Simply Wall St, in 2021 I joined Leveraged, which is Australia’s largest margin lender and a subsidiary of Bendigo & Adelaide Bank. Leveraged had historically been mismanaged, was under new management and was starved of investment.

The idea was for me to build out a direct customer acquisition arm to complement its existing B2B2C channel. My role would be to take ownership of the website & content (which had not had a dedicated owner for several years) and focus on growing direct customer acquisition and conversion with a view to building out a team over time.

What I found was a frustrated organisation set in its ways, and while Leveraged recognised & discussed openly its many challenges, it struggled greatly with change & focus due to its functional silo structure. It was highly hierarchical and had a very “do what you’re told” culture that was a real drag.

This would ordinarily be no problem – I knew what I was getting into – but unfortunately the organisation was also too comfortable to change. Australian margin lending is extremely profitable – think 70% returns on equity – and has had no new entrants for 10 years until IBKR in 2020. Consequently, Leveraged struggles to deliver the changes it needs to thrive.

I helped deliver a number of important projects there including the acquisition of the ANZ Investment Lending book, an email system deprecation & replacement and myriad other BAU initiatives but achieved only a tiny fraction of what I thought should have been possible. We had differing views on whether the organisation should focus on the longer-term goals & vision instead of operating on a day-to-day basis, and ultimately I resigned frustrated.

What were your main takeaways from Leveraged?

Train your managers. One of the more common mistakes large organisations make is promoting strong ICs into management with minimal training. This results in a number of predictable and undesirable behaviours such as minimal questioning/challenging, managers being the only people who speak during meetings, fiefdoms & tribal behaviour, unresolved vision/execution conflicts, and so on.
Hierarchies destroy talent and motivation. If your approach to management is not sharing the context and simply issuing instructions, you will end up with crappy results and be frustrated by your employees’ lack of knowledge, ownership, and initiative.
Optimise for productivity & clarity of direction. High impact initiatives can be driven by a handful of people and relatively small sums of money, but you don’t get these benefits when you don’t know the difference between what is likely to move the needle and what isn’t.
Never join an organisation with management or cultural issues unless it’s in a leadership position with clear scope to promote change. The reason is simply that it is hard for an individual contributor to create positive change; the management team needs to buy in to those behaviours and then propagate them, which is hard in an organisation with cultural issues.
Never take a more junior/lower salary role unless it is exquisitely clear that you will be learning immensely valuable skills, OR unless the organisation is growing rapidly and will create space under you for you to rise up.

Overall, the people I worked with there were great, and I found the leaders highly supportive within the constraints they operated under, but unfortunately at the bank I learned more about how not to do things than how to excel. It is a damn shame and was a strong personal disappointment.

These Days

I help correct deteriorating situations at companies before they become catastrophic. Often in the late stages of the game, alignment between stakeholders breaks down, stress and key departures increase to the point where delivering change becomes impossible and it’s all downhill from there.

Types of situations where I can assist include:

Multiple go-to-market failures & leadership turnover (i.e. to the point where it’s indicative of a product problem more than a sales problem).
Automation & digitisation especially in areas where a business has a large data store (proprietary or otherwise) that is not being fully utilised, or where there is no feedback loop with the market, data is not collected or decisions are made without it.
Leadership & management issues, for example where poor communication, unclear goals, key staff departures, or internal conflict are hindering execution, or alternatively where a legacy “command & control” / “do what you’re told” leadership style is limiting growth.

If your organisation feels clunky and slow, your teams are demoralised, and it’s hard to get everyone to agree on what the future looks like, drop me a line at sean (at) infinitenuance.com.