Holding high-growth names has been a painful exercise in recent months. Valuations in a number of quality companies have come under intense pressure due to a range of factors including: 1) increased competition, 2) structural shifts in industries, and 3) a simple case of sectors de-rating as investor sentiment swings. The collective valuation of REA Group, Carsales and Brambles, all quality businesses, has fallen $6.7 billion or 21.1% over the past six months and serves as a simple illustration of these shifts. Yet each company occupies market-leading positions in its respective industry locally, and in some cases globally. So, does this swift change in sentiment present a compelling opportunity for investors? Matthew Kidman puts this question to Alex Leyland from Leyland Private Asset Management and Hugh Dive from Atlas Funds Management. They also each share a quality company they think looks attractive right now.
Hi, Thank you for this segment as it answers, in part, why my portfolio is down by around 23%. I hold shares in 117 diverse companies & I only began buying shares in July 2016 The price action over the past 8 months of BAL, BKL, CME, FPH, JHL. HSN, IGO, MBE, MIG, NCM, NST, SWM et al, is perverse What signs were there that this drop in share price was likely? Is part of the price action seasonal? Both reporting seasons seemed to knock the share prices down What can we look for in the future to avoid being trapped in stocks whose share price has nosedived unduly? Thank You Craig
Craig, I suggest investing in a lot less companies.When I used to invest in individual companies (now I stick to LICs), I figured about 15 was about the most I could keep tabs on. I suspect with 117 there is no way you could have sufficient knowledge of each to be useful.