Sitting on a >450% gain in under 20 months from one of their positions, Monash Investors not just sold out, but sold short. Simon Shields told the Livewire Live audience: “You can’t just be sitting on the same side all the time. If things change you have to change pretty quickly too”.

Key points:

• The company is Australia’s largest pure-play digital retailer. It is 12 years old, and already generates $400mil in revenue annually. After IPOing at $1.80 in mid-2016, it touched $10.00 a few months ago.
• The company focuses on using tech to identify demand, respond quickly with low-cost products, and adjusts prices in response to inventory drawdown.
• Network effects with growing database facilitate a customer acquisition cost of just $25. Has been applying its strategy to numerous diverse verticals, and may move into financial services and utilities. The market may notappreciatee the potential here.
• However, despite the bullish long-term vision, Monash recently saw signals that suggested short-term weakness, and switched quickly from long to short.

Further insights

Monash Investors aims to achieve their objectives by investing in a small number of compelling stocks that offer considerable upside, and by shorting expensive stocks that are at risk of falling. Watch us provide an overview of our fund here.