The 15 blue chip stocks Gerry Harvey bought at the height of COVID

Harvey Norman is flying for the billionaire, but he has had less luck with some of his other investments.

Harvey Norman is flying for the billionaire, but he has had less luck with some of his other investments. Picture: Richard Dobson

As markets were being smashed at the height of global concerns about COVID-19 towards the end of March, Gerry Harvey decided it was the right time to buy.

He chose 15 blue-chip stocks, including the big banks and others such as toll road operator Transurban and airline Qantas, and spent $1m buying shares in each.

“In about a week or 10 days I’d managed to turn that $15m into about $9m,” the billionaire retailer tells The Australian. “So I’d lost $6m in that time.

“I think even now I’m about $2m behind, so it goes to show no-one is really sure where we are heading at the moment in the market. And anyone who tells you that they know is probably lying.”

Harvey, 80, is one of the mainstays of The List – Australia’s Richest 250 with an estimated wealth of $2.32bn, and by many other measures the billionaire has had a decent time of it in 2020.

The chairman, founder and major shareholder of retail giant Harvey Norman, he recently told The Weekend Australian that his business is in one of its strongest financial positions in years, with a highly profitable stable of overseas stores complimenting robust sales in Australia and New Zealand as consumers filled their homes with new fridges, freezers and home appliances.

Harvey Norman’s share price has surged about 75 per cent since roughly the same time Harvey was buying his blue chip stocks in March, keeping the billionaire’s wealth among the most in the country and reversing most of the stock’s previous losses earlier in the year.

The retailer has no debt on its balance sheet and a property portfolio worth $3.5bn. It recently reported a 19.4 per cent lift in full-year net profit to $480.54m for the year to June 30, as sales revenue for the period rose 7.6 per cent to $8.23bn.

Harvey started the chain, which he now runs with his wife Katie Page, in 1982 with the late Ian Norman after the pair had previously sold the Norman Ross business. Harvey started in business as a vacuum cleaner salesman and remains a bricks and mortar retail optimist.

Buying and selling of horses

His Harvey Norman shares provide the bulk of his wealth, but Harvey also has an eclectic range of other investments that range from equities to cattle farming and an extensive thoroughbred racing business that includes the Magic Millions horse sales brand.

Harvey admits COVID-19 restrictions have been tough to deal with when it comes to buying and selling of horses, a passion of his that mixes business and pleasure.

“We’ve all been down [in terms of sales] and I’ve got a lot of horses to sell at the moment. I’ve got 70 or 80 to 100 that will be in the yearling sales in New Zealand. But the question is will people want to buy them without being there to look. I have to get used to looking at them on a screen myself.”

Meanwhile, Harvey says his farming interests are flying. “If you’re a farmer you’ve never had a better season.”

Harvey has about 15,000-16,000 head of Wagyu cattle and 7000-8000 of Angus cows. “The price of cattle land has gone through the roof, it has never been better. And that’s big and small. I’ve got one parcel of land that has gone from $2m to about $3.1-3.2m in value and that’s just in the past five years.

He says he would like to export more to the US, the Middle East and Indonesia and not be as reliant on the Chinese market, having had to deal with some abattoir closures in NSW in recent weeks.

As for the outlook for retail and with his Victorian stores still closed as the state government keeps Melbourne and much of the state under lockdown, Harvey is guarded.

“No-one knows. You talk to a lot of people and they all say the same thing: I don’t know. And if they tell you something else then it’s probably their best guess.

“We are in totally uncharted waters. I go down to the local shops and you speak to the greengrocer and he says they’re going okay. The cafe around the corner is going pretty well, but for the restaurant next door it is really bad. We just don’t know what will happen.”