TOL - 22nd Apr, 2023
No lithium, no worries for this outperforming small cap manager
Spheria's Matthew Booker discusses how he preserves capital in bear markets and outperforms in bull markets.
When volatility rattles markets, micro caps and small caps typically suffer the biggest drawdowns. But markets have a reliable habit of reverting to the mean sooner or later. That’s arguably very good news if you’re investing in small caps now.
This week’s guest is Matthew Booker, portfolio manager and co-founder at Spheria Asset Management. Matt’s managed small company portfolios for over 15 years, consistently outperforming the index.
The Spheria Australian Microcap Fund has outperformed the S&P/ASX Small Ordinaries Accumulation Index by over 7% per annum since inception, while the Smaller Companies fund has outperformed that same index by over 3% per annum. Just as importantly, they’ve managed to preserve capital, outperform the benchmark through the volatility of the past year, and achieved this feat without lithium stocks!
In this episode of The Rules of Investing, Booker and Livewire's David Thornton discuss:
- where we are in the small cap cycle;
- the opportunities Spheria are targeting;
- capital preservation; and
- the former market darling that’s back in business.
Note: This interview was recorded on Wednesday April 19, 2023.
.png)
Timestamps
- 1:50 - Where we are in the small cap cycle
- 3:30 - Lessons from the past year
- 5:30 - Preserving capital
- 6:50 - Outperforming without lithium
- 10:00 - Why the best is ahead for small caps and microcaps
- 11:00 - Filtering down an enormous universe of stocks
- 12:40 - "Inverse broker" indicator
- 14:00 - Investing in "legitimate growth"
- 16:55 - Red flags
- 21:20 - Takeovers
- 23:00 - Outlook for M&A
- 28:00 - Return of an unloved market darling?
- 35:30 - A bottom-drawer stock (from New Zealand)
Managed Fund
Spheria Australian Smaller Companies Fund
Australian Shares
View
Managed Fund
Spheria Australian Microcap
Australian Shares
View
Never miss an update
Enjoy this wire? Hit the ‘like’ button to let us know.
Stay up to date with my current content by
following me below and you’ll be notified every time I post a wire
The Rules of Investing is one of Australia's top investing podcasts. We interview the leading investment minds from Australia and overseas to better understand their processes and philosophy. After launching in October 2017, there have been over 150 episodes published - you can access all content on Livewire Markets, Spotify and Apple Podcasts.
........
Livewire gives readers access to information and educational content provided by financial services professionals and companies ("Livewire Contributors"). Livewire does not operate under an Australian financial services licence and relies on the exemption available under section 911A(2)(eb) of the Corporations Act 2001 (Cth) in respect of any advice given. Any advice on this site is general in nature and does not take into consideration your objectives, financial situation or needs. Before making a decision please consider these and any relevant Product Disclosure Statement. Livewire has commercial relationships with some Livewire Contributors.
1 topic
2 funds mentioned
2 contributors mentioned
Livewire Markets
The Rules of Investing is one of Australia's top investing podcasts. We interview the leading investment minds from Australia and overseas to better understand their processes and philosophy. After launching in October 2017, there have been over...
Livewire Markets
The Rules of Investing is one of Australia's top investing podcasts. We interview the leading investment minds from Australia and overseas to better understand their processes and philosophy. After launching in October 2017, there have been over...
Comments
Comments
Sign In or Join Free to comment