Money Puzzle Podcast: The investment of choice for Taylor Swift (and her stockbroker dad)

This week’s podcast covers inflation-proofing your portfolio and what we can learn from the financially astute singer who listens carefully to her father, an ex-Merrill Lynch stockbroker.

Singer-songwriter Taylor Swift is also an astute investor. Picture: Getty Images

In the latest episode of the Money Puzzle podcast we talk about how to tackle inflation as an active investor.

Within the last few days the persistence of 7 per cent inflation has become clear, with higher food and energy prices not to mention a big lift in HECS student loan bills.

Many younger investors have little experience of dealing with inflation. In this episode we explain how you – the active investor – can tackle inflation by scrupulously managing your cash and getting the very best deals on your savings.

We also deal with a question on discounted Listed Investment Companies which – believe it or not – leads us towards the Taylor Swift school of investing.

The spectacularly successful Swift has rewritten the rule book for the music industry by re-recording her own material to widespread acclaim from fans while boosting her royalty streams.

Swift is a big time property investor. But it also turns out she takes tips from her ex-Merrill Lynch stockbroker dad, Scott, who has pointed her towards discounted funds.

We know this because a friend of Scott’s – the hedge fund manager Boaz Weinstein – recently told the world that Taylor had been following her dad’s advice with a string of investments in what the Americans like to call “closed-end mutual funds”.

In the Australian market our version of this investment category is ASX-based Listed Investment Companies. There are dozens of so-called LICs on the ASX and many of them are regularly selling at a discount – that is the share price is at a discount to the fund’s Net Tangible Asset value.

The Taylor Swift approach is to buy these funds at a discount getting a double whammy if the fund invests successfully. As the fund’s returns improve, the discount should move to become a premium making more money for everybody concerned.

Does it work? Find out in this week’s podcast.

Who is the guest?

Bruce Brammall of Bruce Brammall Financial

Why him?

Bruce is a financial adviser, newspaper commentator and author of several personal finance books.

What are the topics this time?

1: Optimising your cash to tackle inflation

2: Gearing at a time of high interest rates

3: Taylor Swift’s investment of choice

4: Exploring family trusts

Question of the week

Regular listener, Mike, asks: I own an ASX-listed investment company Hearts and Minds (HM1) that has a large unfavourable discrepancy between NTA per share and price per share (greater than 20% for HM1).

This hasn’t always been the case and the divergence appears to have become more pronounced since they changed strategy from only holding listed securities to also holding private equity securities. Given the value of private equity holdings is more opaque do you know how often they need to be revalued?

Questions for the podcast are welcome at [e-mail]