With a rich background in financial services and international business, Davide Marcotti arrived in Australia in 2017 with a solid foundation of global markets knowledge. With more than 12 years of investing experience and a keen interest in cutting-edge technology and fintech, Davide needed to find a new trading platform in his new home. So he joined eToro, drawn to its low fees, CopyTrader community and Popular Investor program, which Davide has since joined.
Read on to see his outlook for the Aussie market in 2021 and why he thinks the re-emergence of travel will have such a huge impact on the country and its businesses.
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Why and how did you get into copy trading?
When I moved from my home in Italy to Australia in 2017, I had to find a new broker to invest with. After comparing all of Australia’s regulated brokers, I chose eToro because of its low fees, community and the opportunity to copy the trades of people who had more time and experience than me.
Copy trading is probably the best feature I’ve come across in any of the seven brokers I’ve used. At the time, I was extremely busy with my job in strategy and consulting for major financial institutions in Australia and New Zealand, so I didn’t have much time to analyse stocks and other investing opportunities. After browsing through potential Popular Investors, I chose my champions and rolled with them. In just a few months, I was already outgaining the yearly fixed assets yield.
What do you enjoy most about being part of the Popular Investor community, and how has it helped you succeed financially?
The eToro community was one of the main drivers in my decision to choose a new broker. I’ve been trading on eToro for five years, and I truly believe the knowledge and invaluable insights I’ve received from community posts and conversations with incredible traders have been key to my success. I know they are talented traders because, as opposed to other brokers, eToro lets you check past performance.
In the past, when I’ve published articles about stocks, the positive response and encouragement I received from the community encouraged me to dig deeper into the industry and competitors to make sure I was providing my readers with the best possible information.
What tips would you give others looking to start copy trading?
Here are the main qualities I look for in a Popular Investor:
- Proven track record. I would want someone who consistently outperforms the S&P 500 (SPX500) and the Nasdaq. If I wanted a 3% annual return, I would consider an investment in something like bonds. In order to choose which Popular Investors to trust regarding managing my savings, I would look at their proven experience on LinkedIn, their qualifications, tenure on eToro, risk/reward ratio, past and current trades, blog or YouTube and community posts. Investing is serious and should be taken as such.
- Communication. There is no such thing as overcommunicating as a Popular Investor. When I was looking for Popular Investors, I ignored those who did not communicate enough with followers and copiers. It’s your money at risk, and you don’t want to be left in the dark. I believe it’s the Popular Investor’s responsibility to be clear and transparent at all times. Just because someone is having a bad month (which is totally normal in these changing times), they should not disappear from the platform and come back when (and if) they recover. Communication is key at all times.
- Humility and transparency. Please allow me to be extremely frank: nobody (and I mean no one, not even that guy you saw on YouTube posting fancy technical analysis graphs) knows where the market or a stock is headed in the next 2–3 trading days. Warren Buffett once said: “The longer the view, the wiser the intention,” and I agree. I invest for the long term, and when I consider an investment, I always take a step back and look at the bigger picture. I do my due diligence and ask myself questions like: “Why am I investing in this asset?”, “Where is this stock going to be in 1–2 years?”, “What is my exit strategy?” and “Would I buy more of this if it fell 5–10%?” It has been my winning recipe for the past three years.
How do you feel the Australian market has performed so far, given the events of 2020, and what do you think might be in store for the rest of 2021?
Australia has gone through droughts, bushfires and COVID-19, yet, Aussies have shown how resilient this country can be. I have no doubt we will come back stronger than ever.
I also believe Australia (and the ASX) is much better-positioned to outperform any European index in the next few years, as the impacts of COVID have been less severe and the economy is likely to open up much earlier than other places.
Tourism is obviously a key stream of revenue for Australia, so when more borders reopen, I will look to take more positions.
While the vaccine rollout has begun, there’s still uncertainty around time frames for global immunisation, so I personally would be conservative with their estimates. I think the remainder of 2021 will be a very good year for Australia. We have not printed cash anywhere near the levels of Europe and the US, and that’s why the AUD has strengthened in recent times against other major currencies.
What about the future of trading in Australia makes you most excited?
We have recently seen major US banks (such as Goldman Sachs) beating earnings estimates on their expected revenues partly due to government loans to SMEs, decreasing interest rates that cause bond prices to rise and increasing trading volumes.
I expect to see a similar scenario playing out in Australia, with the big four banks registering better-than-expected earnings while strengthening relationships with their customers by providing much-needed support in these difficult times. I have a positive outlook for the traditional banking industry, with the caveat that they will need to keep innovating to retain their market share over the new entrants to the market such as Revolut and other very strong neobanks like Judo and Avenue.
One of the key stocks I am interested in is Marley Spoon (MMM). After going up massively thanks to COVID-19 and the newfound interest in cooking at home, I think there’s long-term potential for this stock to rise even further for the following reasons:
- It managed to retain its newly acquired customer base.
- The stock is still undervalued in terms of P/E multiples when compared to main competitors such as HelloFresh.
So, I think Marley Spoon could be a stock to keep an eye on for the value investors out there.
Finally, from a very long-term perspective, I am also very excited about travel and all that implies. With plane technology advancing and new routes added every year, more and more people will want to move to, and visit Australia, the most beautiful country in the world. This would help boost the economy and, therefore, the Australian stock market and currency. I see good times ahead for us here.
In his four-plus years with eToro, Davide’s long-term investment strategy and transparency have helped dozens of traders decide where to invest their capital. As the Australian market continues to recover from the disruption of 2020, he hopes to use his insights to find more great investment opportunities. Check out Davide’s Popular Investor profile and check out eToro’s CopyTrader platform today.
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