The Dark Art of Buying Bargains
The two companies impacting our portfolios are South32 (ASX:S32) and Whitehaven Coal (ASX:WHC). South32 shares hit a low of $0.87 on 13 January this year. Yesterday it closed at $1.65, up 90% in less than two months. Whitehaven’s nadir was $0.355 on 11 February. It’s up 110% from there in little more than a month. For all I know it could be a false dawn. I attended a breakfast briefing with South32’s CEO Graham Kerr a couple of weeks ago and he said the last thing he needs is prices to rise in the short term. His comments were to the effect that we need another 12-18 months of low prices to permanently remove oversupply from key commodities markets. But that’s the whole point. Whether this is a false dawn or the real one, you don’t get to wait until the sun comes up and still get to buy cheap stocks. It is uncertainty that creates the opportunity and, the second the uncertainty abates, the opportunity disappears with it. Read the full post (VIEW LINK)
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Steve began Forager Funds in 2009, and now manages approximately $470m across two funds. Offering a listed Australian Shares Fund (FOR) and an unlisted International Shares Fund, Steve focuses on long-term investing in undervalued companies.