Simon Shields: The stocks turning market headwinds into competitive advantage

We're all well aware of the headwinds battering markets today - inflation, supply-chain pressures, and rate hikes. Yet it's easy, and misguided, to broad-brush the market and expect all stocks to respond in the same way. 

As you'll learn in this edition of The Rules of Investing, what is a headwind for one stock can be relative value for another. 

Today’s guest is Simon Shields. Simon co-founded Monash Investors in 2012 following stints as head of equities at UBS and Colonial First State. 

Monash Investors are a long/short Australian equity manager with an absolute return focus, which it adopts in its two funds – one listed and one unlisted. Today won’t focus on Simon’s investment style – for that, I urge you to listen to the episode published back on Oct 09, 2020. You can find it here. 

In this episode, Simon really connects the headwinds and the affects they have on different stocks and sectors. Highlights include the outlook for oil prices and two well-known Aussie producers that will benefit from it, the companies that have avoided the supply chain bottlenecks, and what earnings downgrades will mean for some of Australia's most loved companies. 

This episode was recorded on June 1 2022. 

Timestamps

• 1:30 - What gave birth to today's headwinds
  
• 3:30 - Oil supply in trouble, and the stocks that will benefit
  
• 9:00 - Inventories and cost pressures
  
• 17:00 - Cost pressures on consumer discretionary
  
• 20:30 - Growth discount rates
  
• 24:00 - Companies with moats
  
• 26:00 - Time for shorts
  
• 30:00 - The problem with benchmarks
  
• 37:00 - 3 favourite questions
  

Reading Recommendations 

Where are the customers' yachts. Available at Amazon and Booktopia. 

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