Wednesday 28 September 2016

Emmet Savage: Rubicoin founder is the toast of Wall Street

He's the ultimate Savage Eye: Dublin-born investor Emmet Savage, an entrepreneur who's made it to Wall Street's top 50 Irish in business.

Published 15/10/2015 | 02:30

'Culturally, land and property has been our passion. We don't have an evolved stock market system,' Emmet Savage says of Ireland.
'Culturally, land and property has been our passion. We don't have an evolved stock market system,' Emmet Savage says of Ireland.
'House of Cards' and 'Orange Is the New Black', two Netflix Inc. series that have boosted the popularity of online viewing.

Long before Google and Facebook, Dublin-born investor, Emmet Savage, began blogging on the subject of investing in US public companies.

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Then a physics student in Dublin City University, it wasn't long before he was snapped up by financial investment site, The Motley Fool.

Twenty years on, the father of two has been honoured in Irish America's Wall Street 50, noted as one of the most successful investors in the world and raised €2.1m in total for his startup, Rubicoin.

Savage told the Irish Independent that his father introduced him to stocks at a young age. "Things were explained to me as a child because I was a child. But if you explain a complex process to a kid you actually strip it down to all that matters.

"So when I explain to people what a stock exchange is I just say it's a supermarket for shares. Just as you can go to SuperValu for milk, eggs and butter you can go to the Irish stock exchange for Ryanair, CRH and Kingspan."

The 40-year-old's latest venture, Rubicoin, is an app that aims to get people investing. It displays a host of companies that Savage and his team recommend, companies that they say they have invested in.

"These stocks that we've put in our showroom have been extensively researched by me and my team and my track history, as the Wall Street 50 has shown, is now ranked amongst the top, possibly the top, in the world," Savage said.

US streaming giant Netflix has proven to be Emmet's biggest coup, with a return of 24.4pc or higher on his investment per year for the last 12 years. Comically, a hatred of Xtra-vision's 'late fees' model helped spur the investment.

"One of the best things I ever did was to sell my car 15 years ago to buy shares in Netflix, nobody had heard of Netflix. It was sending DVDs in the post in six states.

"At that particular junction in my life I had a resentment for late fees into Xtra-vision. It made me sick that I could take home a DVD or video or whatever and find myself down a sizeable amount of money a few days later. I really had resentment for that model and I loved that Netflix had a policy of no late fees. It was all you can eat. That was a time before The Wire or the Internet."

Earlier in the month Savage was included in Irish America's Wall Street 50. The list recognises the achievements of the most innovative Irish-American and Irish-born leaders in finance.

"It was a huge honour, It was on in the Metropolitan Club of New York. I didn't realise it was as big a deal as it was.

"The luminaries of the investing world are on that list. Fortunately I have made new friends that two weeks ago I didn't have.

"Two years ago I was a telecoms guy. Everyone else who has been honoured has been working in or on the periphery of Wall Street their whole lives and I managed to be honoured by doing this on the side."

Savage is a big believer in teaching investment at schools.

"It's not difficult to understand how and why companies float on the stock market and how normal people like you and me can actually buy a little piece of those companies.

"It should absolutely be introduced as part of the curriculum and if I had a second me, I'd set the other me off about making that happen in Ireland.

"In Ireland, culturally, historically, land and property has been our passion, our pre-occupation and I can understand why. We don't have an evolved stock market system, we haven't grown up with it."

Savage operates under a few key principles of investing. These include what he calls a 'long game'.

"Females make better investors than males because, broadly speaking, they're more inclined to use the right side of their brain which is the artistic side and they're better at looking at a business and answering questions such as 'will my kids be using this business'?

"Men, in general, are alpha male investors, especially in America. They are a little bit more about the sport of investing and watercooler chats. They're taking a smaller look, whereas the females actually naturally take a more sophisticated look at a business and they can see who are the competitors and where it is going.

"To be a good investor you need incredible temperament. In fact the hardest thing to do is also the easiest, to do nothing. There's a magical pixie in the sky that's going to make sure that stocks fall in value the moment you buy them. That's the truth.

"Ninety-nine per cent of your effort should go in before you buy a stock and then one per cent over the next two decades just to make sure they haven't gone mad.

"I bought into Under Armour. I was down 65pc to 70pc for about eight years. Eight years is a long time but now I'm up 15-fold on that investment.

Savage co-founded Rubicoin with fellow ex-Vodafone manager John Tyrrell. The company currently has two apps with another on the horizon.

Rubicoin's 'Invest' is the primary app. It allows users to add their brokerage to it and then begin buying stocks on an easy-to-use platform.

While Rubicoin currently allows users to add their own brokerage to the app, the ability to link up with a new brokerage through the app isn't that far away.

Savage says they are working with a brokerage in the US to allow the feature in the app, which is set for US release later this year. The EU function won't be far off either. He says that they are working on bringing the new brokerage function to countries outside the US next year.

The company also launched a 'Learn' app which helps users understand the stock market, how to use it and how to understand various techniques used by traders. While a third app, Invest Pro, is on the horizon, Rubicoin is currently targeted at a more average investor.

"An average investor has so many more advantages than a professional Wall Street fund manager, because you don't have to answer to anyone. You won't be moving billions or tens of millions or millions, so being small gives you agility," he said.

"It's a bit like watching kids play football on a soccer pitch. They're trying the tricks; the young lads are giving it a shot because they're not scared of failure. Whereas if you're managing $200m of someone else's money, you won't go for that bicycle kick because you're scared you'll fail."

Rubicoin is operating out of two offices in NovaUCD and New York. The company's expansion is continuing.

While he would encourage many to begin investing, Savage says that short-term financing should not be on the table when contemplating investing.

"Spare cash implies that at the end of the month, after you've paid your bills, there is money there. You should never invest in shares if there's short-term debt in front of your nose. You should deal with that first. Certainly there is a place for people to put some of their spare cash and some of their savings away for the very long term."

Keeping his investments to himself hasn't been a top priority for Savage. In fact Savage is making a point to make users aware of his market tips and the direction in which he has gone in the stock markets.

While he keeps his Twitter account on request he says that he never turns potential followers away.

"There's only 300 people there but that has brought some very famous people to me, who have watched," he says. "To protect their own privacy, some of the most famous people in the world have followed me and asked me to show them what I've done in the stock market."

Savage is a big fan of Paddy Cosgrave's Web Summit and says he has attended the Lisbon-destined event in four of its five years.

"I think it's a shame it's moving to Portugal, I think being in Dublin is part of its appeal. If you go to Silicon Valley the Irish brand carries a lot of weight. I might be wrong but I don't think the Portuguese brand carries a similar weight. So you get some of the heavy hitters coming because, partially because it's in Dublin."

Savage said that successful investing really boiled down to one question.

"Tomorrow's superheroes are brands such as Tesla. Tesla is the birth of a superhero, everyone knows about it and it's kind of a sexy car at the moment and Elon Musk gives rousing speeches and all the rest. But you've got to think in 20 years time will Tesla still be here and will it be bigger than it is today?

"That's all you've to ask yourself to be a successful investor you also have to answer it correctly."

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