Mark Landau: Why it's time to put down the last decade's playbook

The Rules of Investing

Livewire Markets

The old adage that "past performance is not an indicator of future returns" is possibly more relevant in today's market than ever before. 

When the market is driven by momentum, as it has been through the past decade, piling into winners pays off. And why wouldn't it? Earnings have been easy to fuel when debt costs next to nothing, in a market where shareholders reward the blind pursuit of market share - no matter how it's achieved.

But we're now in a new paradigm. Inflation, rates, and therefore the cost of debt have all gone up. Oh, and growth is slowing amid fears of recession. So transposing the winning strategy from last decade to this decade just isn't going to work.  

In today’s episode of The Rules of Investing, David Thornton sits down with Mark Landau, Co-Founder and Chief Investment Officer at L1 Capital. 

Mark started L1 in 2007, alongside Raphael Lamm. Their flagship long/short strategy has returned a whopping 18.7% per annum since inception and was ranked in an HSBC survey as the ‘Best Performing Hedge Fund Globally’ in 2015 and a ‘Top 20 Hedge Fund Globally’ in 2016, 2017 and 2021. 

The episode covers an enormous amount of ground. We discuss everything from the uniqueness of today's market, where L1 is deploying capital, what makes earnings sustainable, and the importance of balance sheets. Mark also shares why the investing playbook of the last decade should be put back on the shelf. 

Note: this episode was recorded on Monday October 10, 2022. 



  • 1:15 - The origins of L1 Capital
  • 3:20 - Lessons from the GFC
  • 5:30 - The problem with long-only investing
  • 6:00 - Pursuing a 'quality value' strategy
  • 8:10 - Today's unprecedented market cycle
  • 10:00 - No quick fix for inflation
  • 19:55 - How macro informs L1's bottom-up approach
  • 22:30 - Where L1 is deploying capital
  • 24:30 - Overpriced defensives 
  • 28:00 - The need for sustainable earnings
  • 30:30 - Go for under-geared balance sheets
  • 31:10 - Why pricing power is key
  • 32:00 - Management teams on notice
  • 35:30 - The key to finding a good short
  • 42:50 - The single biggest thing investors are getting wrong about markets
  • 47:00 - L1's big wins and losses
  • 51:10 - The gambling stock Mark would put in the bottom drawer 

Managed Fund
L1 Capital Long Short Fund – Wholesale
Alternative Assets

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The Rules of Investing
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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