Where to next for L1 Capital after a winning vaccine trade?

The Rules of Investing

Livewire Markets

Getting the "vaccine trade" right was perhaps the single biggest factor for investors' performance in the second half of 2020. Equity markets jumped 10% in November on the back of the announcement, a huge month by any account. But for those who made the right call, a good year’s worth of returns were realised in a month.

One fund that called it better than most was L1 Capital’s Long Short Fund, which posted just shy of 32% for the month. Founders and Joint CIOs, Mark Landau and Rafi Lamm, spent a huge amount of time last year researching vaccines, which gave them the confidence to fully position the portfolio for a positive result in November.

In this episode of The Rules of Investing, Mark and Rafi tell us how far along we are in this vaccine trade and how it plays out from here. We also discuss what went wrong following the IPO of the L1 Capital Long Short Fund, and they share several of the stocks and trends they believe have outstanding opportunities ahead.

Time stamps:

  • 2:02 - Mark and Rafi explain their backgrounds and the inception of L1 Capital
  • 8:34 - What happened following the IPO of their LIC and lessons from this experience
  • 12:14 - The strategy behind the Long-Short Fund
  • 18:48 - How much upside is there in equity valuations today?
  • 20:10 - The emerging themes and areas for investment in the current market
  • 24:48 - How far along the vaccine trade are we?
  • 29:01 - Profiting from the short squeeze
  • 32:55 - An Aussie small-cap with a big future
  • 38:07 - An undervalued large-cap set for earnings upgrades
  • 41:35 - Mark and Rafi answer our three favourite questions.

Books discussed:

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L1 Capital is an independent global investment manager. The business is 100% owned by our staff and all members of the investment team are invested alongside clients. Find out more.

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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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