“One of the reasons I recommended this restaurant is that it’s the cheapest place in New York City,” he says, keeping his cheerful Australian accent intact. “It’s a bargain!”
Finemore, 52, learned to deal when he was young. “I’m a AFR reader since I was a 14 year old schoolboy. There wasn’t much competition for the AFR of the school newspaper table in Wagga Wagga. My favorite stories were reading the M†An activity from the entrepreneurs of the day: Robert Holmes a Court, Alan Bond and John Elliott, and Ron Brierley of Industrial Equity; I was fascinated by the dealmaking.”
His other early financial insights hit the track.
“My grandfather and I went to the trot in Wagga on a Wednesday night and I ran around looking at the bookmakers’ prices. I was fascinated with creating odds and why one horse would be even money and the other 20 to one.”
He thinks champion racehorse Winx at 2-1 was a sensational value bet. Arbitration is a bit of an obsession of his, and he later tells me that he bought himself on twitter expects the market to underestimate the likelihood of Elon Musk completing an acquisition deal.
Good investment ideas are everything, says Finemore.
In his early twenties, after studying at UNSW for a few hours or “on a day when there were no horse races,” Finemore worked for a brokerage firm run by businessmen and horse enthusiasts John Massara and John Leaver.
“I remember one day in the eighties when the whole telephone system in Sydney went down. But at the time, John Leaver had a cell phone — I think it was the first cell phone I’d ever seen — and I thought if we sent that cell phone to our biggest customer, we’d get all the business that day. So we grabbed the cell phone and I looked it up.” He can’t remember if the company got any bigger transactions that day, but he says it was the idea that counted.
However, it was a different story in 2020, when the COVID-19 virus crashed the markets. Finemore had no plan and decided to return money to investors.
“Afterwards they will say I capitulated, but how you communicate with people matters. And we communicated quickly at the time, so that everyone was informed very quickly. And they knew what the circumstances were. We returned our investors’ money within a short period of time so that any investor who wanted a high risk exposure could do so.
The burden of taking care of other people’s money
“My reputation is very important to me. And the burden of taking care of other people’s money is very heavy.”
He knows how carefully reputation must be guarded after Manikay was fined by the US Securities and Exchange Commission for a… technical infringement of the so-called Regulation M in 2013. As a result of that incident, Finemore resigned from the board of ASX.
“If the exchange hadn’t been very sensitive, I wouldn’t have resigned in hindsight.”
Finemore quickly prepared the thick tomato salad as a good country boy should. He washes it back with the fresh, young Crocker † Starr Sauvignon Blanc.
The lesson for Finemore, he says, is that you need to have a plan for any crisis – whether it’s a pandemic or the entire phone system in Sydney goes down.
“If any lessons have been learned from COVID, it’s that, certainly from my perspective, I never thought about what the script looked like for that scenario.”
Finemore, who claims to have invested in nearly every major stock or commodity exchange worldwide, helped set up a derivatives trading company in his early twenties at Swissbank. Because of this, he regularly visited Chicago, which he calls ‘the Wagga Wagga of America’.
Leg work is important before making any investment.
“Every time I’m interested in something, I grab a bag and go. I bought a large stake in Modelo SAB (the Mexican brewery owned by AB InBev) after a trip to Mexico City and repeated the exercise when I was interested in the Tequila business. I went to Tequila and bought a large position in Jose Cuervo. That’s the method I used to buy the exchanges: I got on a plane with an old buddy, John Murray, and we visited pretty much every exchange in the world.
“You can learn a lot with your head in a 10-K [annual report]† But you learn more by talking to management, competitors and industry players. All important information is on its way.”
Although he says he will not start a new fund, he is working on a script for the next big risk. It’s one that Federal Reserve Chair Jerome Powell Says He Keeps Him Up At Night† And that is a massive cyber attack on the financial system.
“If a foreign agent could shut down the banking system in the US for a week,” says Finemore, “what would that mean? What happens if we can’t make all the payments in the United States for a week? I think it’s is a bigger risk than people think, and you have to have a script. I’m thinking about what it would be.”
The delicate white fish arrives, but there is a proliferation of bones that is just as difficult to navigate as the questions my subject has asked me.
As part of his plan to create a script for a major financial cyberattack, Finemore has built up stakes in the market infrastructure. That includes exchanges such as the Tel Aviv Stock Exchange, Israel’s only public stock exchange, and more recently Members Exchange MEMX, the fastest-growing stock exchange in the US, which took 4 percent market share in its first year of trading. It has no headquarters, lives in the cloud and is preparing the start of a new US stock options exchange. It is such a threat to the major exchanges that Citadel, Goldman Sachs, Morgan Stanley, UBS, Credit Suisse and Citibank have taken positions.
MEMX’s technology is complex. But Finemore puts it under the “Cambrian Explosion of Innovation” the cryptocurrency and blockchain industry has spawned.
“The reason I have spent so much time looking at cryptocurrency is because there is tremendous innovation happening in the cryptocurrency universe that will be applied to the established exchanges.”
But about crypto, he is cautious: “If you have conversations with people who really understand bitcoin and cryptography in general, one of the things they’ll say is that quantum computing is a threat to encryption.”
He does not own crypto and likens it to the airline industry because innovations and rapid growth are not enough on their own to create a good investment opportunity.
“Often, high innovation and fast-growing industries produce profitless wealth.” to tiehe says, “will be the iconic crash of this cycle”.
Finemore says you can know everyone, but hard work is the best investment tip. He learned that from his truck-driving father, Ron Finemore, the executive chairman of his eponymous company, who — at age 78 — wakes up at 3:45 a.m. every day.
“He’s my best friend. And he’s my business role model. And he’s the hardest working person I know. He always says that doing business is just hard work and the TFDs: the small details, and you can find out where the F stands for.’
Ron Finemore replaced his father as a truck driver after he accidentally dropped a piece of steel on his father’s foot. Unable to work after the accident, his father dropped out of high school and kept family trucking operations going in the countryside. Over time, the company grew so much that it was sold to Toll Holdings in the early 2000s.
We both finished the fish, which was not that filling, which makes me think I should have studied the menu more closely. We move on to the Greek yogurt and honey and the sweeter things in life: family, horses, fashion and art.
“One of the happiest days of my life was Christmas Day when I was a kid, when Santa left a little bay pony tied up under the tree in the front.”
Finemore became and still is a polo fanatic: “The most fun you can have in a day is on a horse.”
That is also the opinion of his youngest child, 18-year-old Isabel, who hopes to become a professional event rider. She is now coached by Australian Olympian Andrew Hoy in England, where she is studying economics.
Manikay means song storyline
His oldest, Olivia, 23, is studying medicine. His son, 22-year-old Connor, recently graduated in Mathematics and Economics from the University of Virginia.
“All the happiest moments in your life are with your family and friends,” he says. “None of them have anything to do with business.”
He also appreciates the finer things in life, such as a well-tailored suit.
“I had a Zegna suit with a tear on the inside and I took it to the Zegna store assuming they would fix it. The man in the store here in New York went to the computer and said, “Sir, it looks like you bought this suit in 1998. [20 years ago]† Maybe it’s time to buy another one.’”
He decided to buy another Zegna suit. And he likes the publicly traded Zegna, despite being a SPAC.
Another of his passions is native art. He has several works including one by Emily Kngwarreye, Australia most wanted Indigenous artist internationally.
“I am a crazy Aboriginal art lover and collector. In fact, that’s what we called the company, we wanted an Australian name that was memorable and Manikay is an Aboriginal word for a song’s storyline.”
In the middle of my last question and his double espresso, the Finemore administrative assistant calls. He has five minutes to be somewhere where it normally takes 30 minutes. If anyone can make it, it’s Finemore.
Estiatorio Milos, 125 W 55th St, New York
2 three-course meal, $78
Fish of the day
Greek yogurt, thyme honey and walnuts
Darjeeling Tea, $US6
Double espresso, $US7
Sparkling water $US9
Bottle of Crocker Starr 2020 Sauvignon Blanc Napa Valley, $US 90
Total: $US190 ($273)
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