3 wires you should read this weekend
1) Mergers and Acquisitions are hot at the moment, it seems that those who aren’t buying assets are selling them. Anthony Aboud manages Perpetual’s ‘Share Plus’ long/short fund, so he studies both the good and the bad acquisitions to look for opportunities. I found this piece very practical, as even if you’re not looking to take short positions yourself, it offers a great guide for what to avoid. He finishes up by explaining what a good acquisition should look like. Some great tips in here that investors can put into their strategy. (VIEW LINK)
2) Given the rally in resources stocks so far this year, a lot of investors are now asking themselves if we’ve seen the bottom of the cycle. While the sharp rally did seem to overshoot somewhat, it’s hard to deny that there seems to have been a change in sentiment towards the sector. As Hedley Widdup, Fund Manager at Lion Selection Group, put it; “It appears that investors broadly have changed their view of miners, and the realisations that miners are 1) cheap and 2) probably have very little downside on price, have now set in – It would be very hard to “un-realise” that.” This insightful piece really helped to clarify in my own head what’s going on in the resources market right now. (VIEW LINK)
3) It’s generally not easy to go against the crowd and buy genuinely cheap stocks which nobody else wants a bar of, but to be a successful value investor you need to do just that. It can feel lonely at times being a contrarian; Steve Johnson from Forager Funds shared a reminder that uncertainty is essential in order for opportunity to appear. The most interesting point I thought was that by the time the uncertainty has disappeared, so has the opportunity. (VIEW LINK)
This week I caught up with Nathan Bell, Head of Research at Peters MacGregor. He had some great advice on how you can prepare yourself to take advantage of the next big market crash – whenever that may be. (VIEW LINK)
We hope you enjoyed Livewire this week. As always, good luck in the markets next week.
Patrick was one of Livewire’s first employees, joining in 2015 after nearly a decade working in insurance, superannuation, and retail banking. He is passionate about investing, with a particular interest in Australian small-caps.
No areas of expertise