Lessons from 30 years in credit markets

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Jason Lindeman, head of credit research at Coolabah Capital Investments, has seen some unusual things in his three decades managing credit. From Argentinian gaming companies operating from river boats, European and UK poultry farms when bird flu first hit, an Italian dairy company with fraudulent bank statements, Bulgarian steel plants, and a CFO who was apprehended at an airport with $500k in his suitcase, it’s safe to say he’s a hard man to surprise. But upon returning to Australia and taking a position at Coolabah, he said he was blown away by the intensity and depth of the due diligence process. 

Key points:

  • Don’t search for yield, search for mispricings.
  • Focus on minimising risk, look for implicit government guarantees such as ‘too big to fail’ institutions.
  • Never forget the definition of credit quality: “the ability of an entity to withstand both internal and external shocks.” Avoid companies that can’t withstand shocks.

In this video, Lindeman shares an example of this process in action.

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