HALL OF FAME

The man they cant afford to ignore

PUBLISHED: 13 Jul 2011 PRINT EDITION: 13 July 2011 Brad Hatch Richard Copplesons market report lands in the email inboxes of 4000 Goldman Sachs institutional clients every trading afternoon. A place on the official distribution list means shelling out $50,000 in commissions a year, but thousands read his market musings for free. The Coppo Report, as it is known, quickly goes viral. It is circulated around the market to rival traders, fund managers, company executives, directors, politicians and journalists. Since starting the report 15 years ago, Coppleson has written more than 3000 essays on the ups, downs and sideways of trading. But it is often the curious tangents he explores rooted in a deep love of history and politics that create the most buzz. The 46-year-old executive director in Goldmans Sydney institutional sales and trading team knows how to read the market beyond the red and green of the ticker board. Richard Copplesons Coppo Report has become a must read for thousands of market followers since he began writing it 15 years ago. Illustration: Daivd Rowe

His skills have been hailed by the Australian Stockbrokers Foundation, which admitted him last month to its hall of fame, which includes notables such as David Horsfield, the chief executive of the Stockbrokers Association of Australia, and veteran stockbroker Harold Shapiro. Coppleson, not surprisingly, loves his job. Its so dynamic stocks, economics, politics, macro factors, war, natural disasters the recipe of what makes it interesting and fascinating is endless, he tells The Australian Financial Review .

Coppleson grew up in the eastern suburbs of Sydney in a well-heeled medical family. He attended elite schools, Sydney Grammar prep and Cranbrook, and always had his nose stuck in history books. He completed a commerce degree and joined Ord Minnett as a bookings clerk in London. Two years on, in 1987, he returned to Ord Minnett in Sydney as a trainee institutional dealer. Ord Minnett boss Giles Kryger welcomed Coppleson by pointing to an empty chair on the dealing desk, saying: Here, we throw you in at the deep end and you either sink or swim. The last guy who sat there sank. Coppo was wet behind the ears, full of opinions, and couldnt be silenced. One thing many people have said over the years is that they like the fact I have strong opinions, especially at times when many brokers are not prepared to make a call for fear of getting it wrong, Coppleson says. What I have enjoyed over the years has been meeting people for the first time who tell me that they have been following my stuff for years and how much they love it. Coppleson began writing the report in mid-1995 at Ord Minnett on an eyes-only basis for a young dealer, Jade Petkovic, who worked for a fund manager client of Ords and asked Coppo for assistance with market information. Coppleson and Petkovic later married. Since then, the report has slowly built up its wide audience. Coppleson thrived at Ord Minnett as part of a top-rated sales trading desk before leaving in 2000 with colleagues Steve Maartensz and Stuart Goddard to join Goldman Sachs JBWere. Maartensz and Coppleson remain at Goldman. The hall of fame gong recognises Copplesons 25-year stockbroking career and the wide, unofficial reach of his report. Copplesons followers include Reserve Bank of Australia officials, as well as Kevin Rudd and Malcolm Turnbull. In October 2008, as the global financial crisis swirled, then prime minister Rudd told then Goldman Sachs boss Craig Drummond that he was a religious reader of the report. Rudd labelled it outstanding despite Coppos political leanings. Coppleson, aged nine, handed out Liberal how to vote cards for Billy McMahon. When Gough Whitlam became prime minister in 1972 and tough times ensued, Coppleson lost his 20 weekly pocket money. Yet he remains passionate about politics.

He is no clairvoyant but he has a knack for gauging market sentiment and picking trends. Peers say his ability to mesh a macro view of the world with a deep dive into corporate performance and events sets him apart from the crowd. I write a lot of it myself on ideas I have noticed or observed over the years that sometimes tend to repeat, Coppleson says. Im a very keen follower of crowd psychology as an important indicator for major turns in markets. I also get a lot of motivation from my colleagues ideas and thoughts, but only those I agree with I may talk about in the report. The Coppleson ideas factory is very much independent. Ive never been advised by management to say or push any stock, story or idea every one is purely up to me, he says. Im allowed to write whatever I think is interesting about the market, a stock or it can be whatever I may find interesting that has no relevance to the markets, but I think some clients will. Coppleson has to be fearless in offering his views. For example, a report in May that was negative about the property market prompted feedback from a number of real estate agents who told him the market was healthy and to butt out. Having an opinion on things means you will always get criticism from those who dont agree, he says. Copplesons report is often seen being read on the Mosman ferry and at cafes. On one occasion, a gym in Hornsby frantically called Coppo to tell him his confidential report had been left on a treadmill. Hes such hot property, but hardly knows it. Coppleson hung up three times on ABC broadcaster Kerry OBrien, who was ringing to flesh out an observation in one report, thinking it was a dealing-desk prank. His correct prediction in early March 2003 that hostilities in Iraq would start on March 15 because it was a moonless night also sparked a call to him from the US State Department. A number of major assaults have happened throughout history on moonless nights. I began calling [the Iraq war] back in 2002 and everyone, including a number of Americans, said I was absurd as they were not hearing that the US was going to invade Iraq, Coppleson says. So how did I know? I studied history. Feedback to Coppleson from one devotee sums up his reputation nicely: Either you have a direct line to the man above or you have stolen the newspapers a few weeks before publication which is it? Like most brokers, Coppleson thrives on the adrenalin rush the stockmarket provides. I love the unpredictability of markets and the fact that every day can be different to the way you thought it would be before the market opens, he says. Coppleson has clocked up 20 years as a sales trader and now does sales research at Goldman for boutiques. My clients come first, trading for the clients second and my third priority is producing the report each day, he says. Coppleson says he is most inspired by historys great names and events. He has a library of photos of everything from sharks to cats, which are used to visually enhance his reports. The shark fetish stems from his grandfather, Victor Coppleson, who was the surgeon at St Vincents Hospital who stitched up shark bite victims and also wrote the book Shark Attack . Such seemingly trivial details find their way into the Coppo Report, although he would argue that all his musings have relevance to investors. Thats debatable. In one report, Coppleson inserted flags and challenged clients to work out what he meant. One was US presidents by their state flags; another was most deaths per head of population in world war two. The third flag was Nauru and thats why only about three got it. Clients loved that because it was a bit different, Coppleson says. Other notable research includes market moves every July versus June since 1970; total market returns since 1883; second-term government seat losses since federation; percentage change in the Dow Jones Industrial Average in September since 1896; listing all significant events that occurred on September 11; as well as producing a 2008 Bogan Index, which measured the impact of the global financial crisis by looking at the increase in so-called big boys toys and luxury cars for sale. Copplesons daughter also feeds into his daily assessment of the market. She learned a few years back to switch on CNBC each morning and assess whether there were more red or green arrows moving on the screen

information that dictates the mood of the trading day ahead. Coppleson says one of his best market calls was going bullish in March 2003 and staying that way for a long time despite many saying it was just a bear market rally. He went similarly bullish on markets just before the collapse of Lehman Brothers. That was a bad call, he admits, but then I called the bottom in March 2009 and many told me I was a lunatic as the world was going to get a lot worse that crowd psychology at the time told me that everyone was very negative. I went bearish on markets around September 2007 because of the credit crisis thats when I put the shark on my reports every now and then and looked silly for a few months until it finally fell in early 2008. Copplesons advice to young brokers or those entering the industry is to be very keen and do as many different things as you can. You need to read as much as you can on stocks and the economy. adding its important to learn from those who are older and can give you the advice that is invaluable experience. There are two books he recommends to young people: an inspirational volume called Think and Grow Rich by Napoleon Hill and the classic One Up on Wall Street by Peter Lynch. His No 1 rule is to look after your clients. Treat them like gold, he says. If you look after them well, then you will build up over time. The most important asset any broker can have with their client is trust. The quickest way to make money in the stockmarket is to make it slowly. The market should not be used like a casino but instead should be seen as a place where long-term slow-as-she-goes wealth accumulation in the blue chips is the best strategy and one that never fails. Brokers will typically see two to four bull and bear markets in their career, he says. Everyone feels at the time that it will never end and everyone tells you that its different this time. How many times I have heard that one over the years. It isnt. The rule Coppleson lives by is that history repeats itself over and over again. I believe its true that those who forget the past are condemned to repeat it, he says. The excesses will come again: credit crunches, bank failures, sovereign debt crises, new ideas, recessions, booms and busts. Only having worked through these events can you recognise that they are all part of the cycle. The Australian Financial Review

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