Stacking the odds in your favour

When looking for mispriced opportunities, it’s important to separate what a company says from what it actually does. Simon Shields from Monash Investors Limited explains that while management is restricted by their legal obligations, careful observation of their behaviour can give an indication as to what they might do next.

“We got set in Afterpay because we could see that on the back of their success in Australia and the metrics around that from online retailers, they could put that information in front of other retailers, who would be very quick to adopt Afterpay.”

With such amazing success locally, the obvious question that follows is ‘what happens next?’ Shields says it was “very likely” that Afterpay would expand overseas, most likely to the USA. But despite the very high likelihood of an overseas expansion, management were forced to keep their mouth shut until the deal was approved by the board.

Watch the full video to find out how Simon used this insight to stack the odds in his favour.

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. Find out more here