Paul Taylor: What to do when crisis becomes the norm

23 years at Fidelity has exposed Paul Taylor to a raft of industry heavyweights and market-shaping crises. Working with names such as Peter Lynch and Anthony Bolton offered unique insights into the minds of some of the world’s greatest investors, and it is these experiences that underpin Paul’s commitment to a data-led approach to investing. 

Markets are prone to “shooting first and asking questions second,” so capitalising on these rash, heuristic-driven decisions can present substantial opportunities to those that can dissect the noise.

“The market is dealing in heuristics and rules of thumb. It is not dealing in specifics because at this point, we don’t have a lot of the data. We don’t really understand.”

Paul’s array of crisis experience reaffirms his belief in ‘compounder stocks’ delivering the strongest long-run performances within any portfolio. Such businesses are those that maintain the ability to reinvest capital at high rates whilst being led by quality management teams and operating in industries with major structural growth tailwinds. This mantra remains true during times of market uncertainty, however at the foundation of any such stock must be a sound balance sheet that will allow the realisation of upside once relative normality resumes.

In this extended interview, Paul reflects on the key circumstances that have informed his investment philosophy and the current themes his Australian Equities fund is focused on. He further considers the long term implications of Covid-19 on market trends and warns about the dangers of confusing cyclical swings with structural changes. 

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Paul invests in a diversified selection of around 30 to 50 Australian companies using a bottom-up stock-selection approach that focuses on undiscovered earnings potential, value and growth and is designed to be a core holding. To find out more, use the contact button below.