Investor Points of Few – Jim Mellon Goes Long on Longevity

Jim Mellon is a billionaire businessman, investor, author and friend, and has been described as the UK’s equivalent of Warren Buffett. But don’t say that to him. He’s made it very clear: “I don’t want to spend my life drinking Cherry Coke and living in the same house I bought in the 1950s.”

By Alan Steel

This one was really special.

Not only has it been two years since my good friend – billionaire businessman, investor and author Jim Mellon – has spoken publicly back in his home town of Edinburgh about investing, but he agreed to do so to clients and friends of ASAM while on the cusp of launching his new (and literally “life changing”) book entitled Juvenescence – Investing in the Age of Longevity.

Jim’s latest collaboration with entrepreneur and business advisor Al Chalabi has seen him spend a year sifting through cutting-edge research, visiting laboratories and interviewing key opinion leaders in the field of life extension.

Juvenesence will be on bookshelves in mid-September, and the profits will be donated to a number of age research charities.

And this will be his only Scottish appearance, other than attending the Edinburgh Festival to see Dominic Holland perform his “Eclipsed” show at the Voodoo Rooms (though he’ll be in the audience for that one).

Back in 2015, Jim was gracious enough to share his insights at Edinburgh’s New Club with Alan Steel Asset Management clients about the future of investing and his recently published book at that time, Fast Forward..

Fast forward to yesterday at Edinburgh’s Waldorf Hotel and it’s easy to see that Jim’s expectations about the development of different markets hasn’t changed much, except for his enhanced focus on “living young” and the impact of healthcare, technology and the finance sectors on human longevity.

In fact, the energetic 60-year-old has spent the last year traversing the planet in order to listen to and speak with a host of longevity charities and age research specialists.

And in an era when celebrity pundits change their minds regularly on how best to wind down the doomsday clock and seal the fate of the financial world, it’s refreshing to hear the words of a truly successful investor and businessman as prolific as Jim focusing on the other side of that coin.

Jim regaled the audience with his views on the current “distortion of reality in the markets right now,” noting the level of investor overindulgence and concentration on what he sees as the massively overvalued FANG technology stocks (Facebook, Amazon, Netflix, and Google – now Alphabet, Inc.).

He also pointed out that, while the US markets and economy were relatively healthy, albeit high-priced, when America sneezes the rest of the financial world tends to catch a cold; a cautious warning to investors with big US exposure.

The likelihood of a 15% to 25% correction over the next two years is, in his opinion, very high.

Jim actually started his career in the early 1980s out in San Francisco as a young fund manager working with a firm called GT. I first met Jim back in 1981. He was one of the first people to recognise the potential of Silicon Valley (before there was a Silicon Valley). Three years later Jim would follow the UK’s renowned Far East market’s guru, Richard Thornton, out to Hong Kong in 1984.

He subsequently invested in a uranium mining business called UraMin – his first big £multi-million success. The company’s market value leapt up from $100,000 to $2.5 billion in the space of two years. Jim said, “We didn’t own it all. It was a public company. But that was a good investment.” And the rest, as they say, is history.

Apart from his focus on investing in the age of longevity, Jim remains enamoured with Japan and his favourite major market, the Nikkei. His suggestion to our attendees was that it, “now holds some of the best companies in which to invest and stands out as cheaper than any other major markets, with relatively low foreign ownership.”

But it was the disruptive effects of technology that stood as the highlight of Jim’s presentation, alongside a dizzying array of wellness and longevity research and the forthcoming products and knowledge that will make “living to 100 years old no big deal anymore.”

So, warn the Queen to stock up on postcards. It looks like she’s in for some serious writer’s cramp.

And, as always, Jim puts his money where his mouth is. He’s going long on longevity, where new drug products take over ten years and a $billion to get to market.

Jim notes that, “Within 20 years life expectancy will rise to 110 or 120. It is equivalent to living another 50% of your life. It will be like going from a 24 hour day to 36 hours. Life expectancy in 1900 was 31. In 2015 it was 72. By 2030 it could be 120.”

Long on longevity indeed.

He also reminds us that if we don’t take a big picture view on technology we can wind up getting stuck holding our knitting needles. You need look no further than Provident Financial’s 70% one day loss, a drama Jim attributes to being asleep at the wheel as technology-driven market disruption rather suddenly changed the traffic signals.

The message is simple: Look long-term, invest long-term and try to live long-term.

Oh, and apparently red wine is still good for you, so there’s hope for this investor yet!

Alan Steel, Chairman, Alan Steel Asset Management

 

 

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