After 35 years of stockbroking for some of the biggest houses and investors in Australia and the UK, the Secret Broker is regaling Stockhead readers with his colourful war stories — from the trading floor to the dealer’s desk.

I just watched a documentary on Freddie Mercury and it ended with a tribute concert at Wembley Stadium.

Halfway through, a guy who looked identical to Freddie was hoisted onto someone’s shoulders and the band who were on stage had to do a double take.

80,000 Queen fans packed into the stadium and there is Freddie himself, watching them perform.

Turns out that the guy was a Freddie lookalike performer and he later told his story about being ridiculed at school for having goofy teeth.

It was only when Queen arrived on the scene that he came into his element as someone rich and semi-famous.

This is the bit that stood out for me. Not that I am a fugly guy; in fact, it’s the opposite. I am a pulchritudinous guy according to our editor (Ed: pulchriwhatnow?), who knows all these very big words.

Regardless, something fugly can work to your advantage.

It reminded me of how an unloved stock can at some point become loved.

When we were in the City back in the 80s, we would always look for fugly and unloved companies. The kind that when the lights come on in the disco at the end of the night, everyone gasps and runs.

“Go ugly early” was our motto.

Then a bit of boardroom makeover and a cheap placement got us set and ready for a trip to David Jones.

One stock we liked got backdoored at 20 cents and a year later they were 7 cents. Nothing had changed except for the fact that one of their large holders had got divorced and his ex-wife was dumping them out of spite.

We just kept lowering our bids and then one day, she was gone.

There followed a quick call to the Chairman and a rapid fundraising of nicely priced options was put together and bingo, we were set (again).

This was at the time, a stock no-one else would touch, lights on or off.

Five years later, they were taken over at $3.20 a share. At this point they had become a princess.
 

Hit by the ugly bus

In London we had an analyst who looked like a junior Mr Bean and was definitely – in some way – “a bit different”.

He was brilliant at finding us unloved bonds. The type that had gone from AA rated to junk status and hopefully would become re-rated later on.

He was very dedicated, didn’t drink and went to church every Sunday. Fugly? hard to argue with. Think of Sheldon from Big Bang Theory – that was him.

But he threw himself into his work, so much so that he had two breakdowns.

Once when he was so engrossed in a document he stepped off a red bus as it was still moving. Two weeks in hospital!

The second time he was “cleaning his teeth in his pyjamas” on a Sunday night and thought he was getting ready to go to work.

So he put on his suit and was found trying to get through chained up gates to the office. That ended up with two weeks of rehab in the Priory with the rich and famous.

Eventually we found him a nice girlfriend and she managed to get him a bit more “normal”. Great for him, but less junk bond spotting for us.

The joke I always loved was my mate telling someone that they were so ugly, that when they were born, all the nurses slapped your mother.

So if you have a face only for radio or one that only a mother would love, just like unloved shares, there is hope for you.

My ‘Fugly’ watchlist occasionally has something that moves on to the ‘one to watch list’ and then to the 10-Bagger list.

Just keep the lights off when you start picking and you may find an unlikely princess… or at least one with thick glasses!

The Secret Broker can be found on Twitter here @SecretBrokerAU or on email at [email protected]

Feel free to contact him with your best stock tips and ideas.