LOW growth and high yield is the key investment driver these days for former NBA star Luc Longley.
LOW growth and high yield is the key investment driver these days for former NBA star Luc Longley.
Mr Longley addressed a WA Business News Success in Leadership Series breakfast last week, treating attendees to some insights into his investment strategy, the pressures of playing top level basketball and the decisions he made that paved the way for his return to Western Australia.
And he found time to throw some good natured barbs at the expense of fellow Perth Wildcats owner Andrew Vlahov.
Mr Longley also rated his best and worst investments. Among those in the former category was the decision to buy into Clinical Cell Culture at a very early stage.
It is understood the shares were worth 2.5 cents when he and Mr Vlahov bought into the company. The stock now sells around the 30 cents a share mark.
Mr Longley said his worst investment was probably buying the Wildcats because it was a decision based almost solely on emotion.
With his earnings window from professional basketball closing this year, Mr Longley told WA Business News after the breakfast that he needed to make those earning last for the rest of his life and to set up his family.
His basketball career came to an end in 2001 due to a chronic ankle injury and his compensation payment in the form of salary from his last NBA club the New York Knicks finishes this year.
“I have to take the long view. In the past it’s been growth and now I’m looking at yield,” Mr Longley said.
He said property made up the bulk of his investment portfolio.
“People are always going to need somewhere to live. It’s something tangible at the end of the day and better than stocks and bonds if you don’t like volatility,” Mr Longley said.
“I’ve always seemed to do well out of property.”
Mr Longley said he felt he did not have as good an investment strategy as he should have.
“The strategy I had was always to return home,” he said.
“But while I was in the US I had predominantly US investments because I could touch, feel and see them. Now most of my investments are here,” he said.
“The biggest failures I’ve had was when I tried to run things remotely. I’d have to rely on other people to run them for me and deal with powers of attorney and things like that. I found that discomforting.”
On the Wildcats decision, Mr Longley said he had no regrets because it was a chance to keep basketball alive in WA.
“If I’d spent the money on a low yield, high growth investments I’d be a lot better off by now,” he said.
“But I feel good about it [buying the club].
“It’s a good investment from an emotional point of view.”
While Mr Longley prefers to keep his investments close, he retains some US investments, mostly stocks and bonds but also a restaurant that played a seminal role in his early basketball career while he was on a scholarship to the University of New Mexico.
He played college basketball and the restaurant sponsored the team.
Because he was a “starving” student he and his team mates were allowed to eat meals the restaurant had cooked but not served.
Mr Longley said that going from a financially struggling college student to the high incomes of professional basketball had been a shock.
When he joined his first professional basketball club, the Minnesota Timberwolves, he received a $US1 million signing bonus – on top of his salary.
“At that stage I’d had a cheque book for a year and didn’t know how to balance it,” he said.
“Most people start out from university, get a low paying job and then progress to a higher paying one. They grow up with their money. I didn’t have that option.”
