Talking Funds with Kuttabul Capital Management: Investing with Rich
Richard Hemming
In this episode of Investing with Rich, I interview Richard Bailey, chief investment officer at Kuttabul Capital Management on what it takes to run a successful Australian hedge fund, and provide helpful tips for investors.
Richard Bailey is one of the few fund managers in Australia to successfully manage a hedge fund, which makes money no matter whether the market goes up or down, buying a portfolio of stocks, but also selling stocks short, in order to profit from price weakness.
In the past 3 and a half years the fund has returned almost 10% a year, despite the market flat lining it. How does he do it?
“We take long and short positions. In a downturn like in March 2020, we could manage the market better than a fund that had to be 95% invested in stocks.
“(When buying) we want to see stocks that have an increasing rate of earnings growth especially compared to prior expectations. When the earnings outlook improves, the multiple those earnings trade on also improves.
“On the selling/shorting side, there are three types of companies we look for. The first is those with deteriorating earnings outlook; the second, what I call a deflating hype situation; and last, those struggling to repay debt.”
Here are some highlights:
How automotive stocks PWR Holdings (ASX:PWR) and Eagers Automotive (ASX:APE) have driven performance.
Why investors should consider buying Tourism Holdings (ASX:THL) after its 10% sell off.
Why travel stocks are going to continue to motor up – Helloworld Travel (ASX:HLO), Webjet (ASX:WEB) and Corporate Travel (ASX:CTD).
Why Lindsay Australia (ASX:LAU) is going higher and higher.
THE BIG SHORT. Which stocks to short-sell? Star Entertainment (ASX:SGR), Pointsbet (ASX:PBH), Synlait Milk (ASX:SM1).
THE BIG TAKEOUT!
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