3 early warning signs it’s time to change your view
When a stock has been in your portfolio for a while, it’s easy to get attached to the position and ‘anchor’ yourself to old information. In recent years, Simon Shields, Principal at Monash Investors Limited, has shown repeatedly his willingness to change his view.
He’s made money on both the long side and the short side on stocks like Kogan, Qantas, and Corporate Travel Management. So when I recently sat down with him for the latest Rules of Investing podcast, naturally, I wanted to know how he went about it. He pointed to three key “early warning signs” that he looks for that indicate it could be time to reduce a position:
- A spike in short interest
- An unexpected downgrade by the company (not by analysts)
- When a company fails to meet their ‘signposts’ that are expected along the way.
He expands on all these points in this episode. He also shares an under-the-radar small cap that’s perfectly positioned for an outstanding 2021, and he nominates a controversial stock as one he’d hold if the market were closed.
Time Stamps:
- 1:43 – The inception of Monash Partners and Simon's history with partner, Shane Fitzgerald
- 6:15 – Reflecting on his April rationale for bull market optimism
- 11:12 – Simon’s current market outlook and catalysts for change
- 12:25 – Strategies to avoid being anchored to past information and the importance of being able to act on both short and long signals
- 18:00 – Insights into the travel sector and opportunities that will arise
- 21:30 – How has EML held up during Covid-19 despite shopping mall shut downs
- 24:10 – One stock that will have an outstanding 2021 regardless of economic conditions
- 26:55 – Simon answers our 3 favourite questions
Content discussed:
- 5 reasons this fundie is bullish right now, Livewire Exclusive featuring Simon Shields
- Podcast: Cautionary Tales by Tim Harford
Benefit at every stage of a cycle
Monash Investors Limited invest in a small number of compelling stocks that offer considerable upside and short expensive stocks that are at risk of falling. Want to learn more? Hit the 'contact' button to get in touch or visit their website for further information.
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The Rules of Investing is one of Australia's top investing podcasts. We interview the leading investment minds from Australia and overseas to better understand their processes and philosophy. After launching in October 2017, there have been over 150 episodes published - you can access all content on Livewire Markets, Spotify and Apple Podcasts.
Featuring
Simon Shields,
Monash Investors
Simon has over 30 years experience as an analyst and fund manager. He co-founded Monash Investors in 2012 - a long/short Australian equity manager with an absolute return focus.
Monash Investors Limited,
Monash Investors
In 2012, Monash Investors was established by two of Australia’s most experienced fund managers in Simon Shields and Shane Fitzgerald. In 2018 Sebastian Correia joined the team and is now a Co-Portfolio Manager.
Both Simon and Shane have over 30 years’ experience. Simon previously was Head of Australian Equities at UBS Global Asset Management and Colonial First State. Shane’s previous experience was with JP Morgan and UBS Global Asset Management. Sebastian previously worked at EY. Monash Investors offers investors an Australian equity exposure with a strategy of outperforming the S&P ASX Small Ordinaries Total Return Index over the medium term (5yrs).
........
Livewire gives readers access to information and educational content provided by financial services professionals and companies ("Livewire Contributors"). Livewire does not operate under an Australian financial services licence and relies on the exemption available under section 911A(2)(eb) of the Corporations Act 2001 (Cth) in respect of any advice given. Any advice on this site is general in nature and does not take into consideration your objectives, financial situation or needs. Before making a decision please consider these and any relevant Product Disclosure Statement. Livewire has commercial relationships with some Livewire Contributors.
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7 stocks mentioned
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Livewire Markets
The Rules of Investing is one of Australia's top investing podcasts. We interview the leading investment minds from Australia and overseas to better understand their processes and philosophy. After launching in October 2017, there have been over...
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