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:

1. A spike in short interest
2. An unexpected downgrade by the company (not by analysts)
3. 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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