Woolworths: How to decide when to leave a party

Chad Slater

Ellerston Capital

Within investing, dealing with success isn’t the problem; understanding when your roadmap isn’t working out is the hard part. If you change your mind too early, you run the risk of shutting down good ideas on what we’d call “noise”.  The original thesis on Woolworths in 2015 was of over-earning with margins that were too high. This played out over the intervening period to the point where we’d acknowledge that the idea had become a “consensus short”. The idea was that there would be a second leg to the story with a competitive response from Wesfarmers taking pricing down to protect Coles’ newly grown market share gains.  When this Team Morphic member was younger, there was a saying “nothing good happens after 3 am”. So, has 3 am passed for now in the stock, and is it “time to leave the party?" (VIEW LINK)


1 stock mentioned

Chad Slater
Co Head Global Equities (ex-Asia)
Ellerston Capital

Chad co-founded Morphic Asset Management in 2012. As a stock picker Chad is also a generalist but has strong regional knowledge of Europe and the Americas. He has also been awarded the CFA Charter.

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.