The Australian market is uniquely concentrated. The top end of the index is dominated by a few big companies, and that’s supported by a long tail of small positions. This presents a difficult opportunity for an investor to express a negative view on one of those small companies, but also makes betting against the bigger companies a risk.

Paradice Investment Management has traditionally been known as a long-only manager, but David Moberley seeks to combat this concentration by adding short selling to the toolbox.

In this video, David shares his ‘four bucket’ strategy to identifying a company to short, and details the pros and cons of this investment approach.

 

This video was produced by and originally appeared on Livewire Markets. 

David Moberley is a 2020 Conference Fund Manager, and Paradice Investment Management is a Core Fund Manager.