About Montaka

In the Midst of an Historic Reallocation?

Over the last 12 months we have borne witness to one of the most significant portfolio reallocations of modern times.  Investors have sold ~US$250bn of global equity funds and bought ~US$780bn of bond funds (inc money market). Looking at the difference between equity and bond flows (i.e. equity flows minus bonds flows), implies over US$1 …

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Look for Businesses That Get More Than Their Fair Share

Peter Lynch, the legendary investor, once quipped that it’s best to invest in businesses that any idiot could run, because sooner or later one will. This begs the question of what drives the economic returns of businesses: is it the competitive forces of that industry or the skill of management? It’s likely a combination of …

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Goodbye 2017

Investing legend, Seth Klarman, recently wrote that: “When the market reverses, dormant advantages conferred by analytical edge, discipline, thoughtful hedging, a sourcing network, team building and process improvement are restored.” We have no idea if or when the market will reverse, but we continue to work hard to strengthen these “dormant advantages” to which Klarman …

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The Hidden Value of Low Correlation

We recently wrote about the reward-per-unit-of-risk ratio. Ultimately, investing is entirely concerned with generating reward-per-unit-of-risk taken. And there are two obvious ways to boost this ratio: Boost the numerator: that is, identify skilful managers who implement sound investment process with extreme discipline; and/or Reduce the denominator. But how does one reduce the denominator? Well, there …

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Welcome Daniel

This month the Montaka team welcomed a new Research Analyst by the name of Daniel Wu. Daniel is an extremely sharp financial analyst with previous experience at Goldman Sachs and UBS in their investment banking division. Daniel’s formal education was completed at the University of Sydney from which Daniel graduated with a Bachelor of Commerce …

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What makes a great short? (Part III)

The third (of four) characteristic that we think makes an attractive short is called Asymmetries. (For a review of the first characteristic, Thematics / Structural Declines, click here; and the second, Divergent Expectations, here). Asymmetries are specific drivers of asymmetric risks that can result in a stock price collapsing rapidly over a short period of …

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Showing a clear sensitivity to wages

Australian investors that were able to catch our recent national roadshow (video here) will know that we position Montaka’s long and short portfolios to take advantage of medium-term trends we are observing in the global economy. We talked about a short position in Montaka’s portfolio called Regis Corporation (NYSE: RGS) – a network of around …

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