Investment management can be a brutal business. When you're talking small caps, the brutality is amplified orders of magnitude.
Between March 20 and September 3 last year, the ASX Small Ordinaries Index sky-rocketed 44.38%. That's the kind of performance that will make a fund manager euphoric, but also nervous. Mean reversion is a thing.
Eventually, you need to pay the piper for that kind of performance. And pay the piper the small cap sector most certainly did, in the form of a 25% downward correction.
But just as what goes up must come down, what goes down will eventually go up. And we may have passed that inflection point, with the Small Ords Index up over 11% in the last month.
In this episode of The Rules of Investing, Livewire's David Thornton sat down with Donny Buchanan, Co-Founder, CIO and Portfolio Manager for the Lakehouse Small Companies Fund.
Donny's fund has been swept up in the sell-off. But frankly, so has just about every fund. What's important is how they set themselves up for the recovery. You make money in the buying, after all.
Donny discusses the problems associated with valuing tech growth, the importance of believing in and sticking to your fund's mandate, and the lessons he's taken away from this latest sell-off.
He also offers up a small cap tech stock that is quietly forming a monopoly by creating its own ecosystem.
700+ meetings each year: How WAM Global uncovers under-the-radar stocks
Chris Stott’s 5 high conviction stock ideas for the new bull market
Christopher Joye: No margin for error for risk junkies craving rate cuts
Why Ben Clark is taking profits on growth stocks (and where he's putting that money to work)
Trailer: Ben Clark, TMS Capital
The next 10 years in ETF growth could be dominated by this asset class
Warryn Robertson’s guide to picking the best infrastructure stocks on the ASX and abroad
The policy overhaul Shane Oliver would make to secure Australia's fortunes
Where Soul Patts is investing for long term growth and dividends
How Hyperion unearths rare but exceptional growth companies (plus two that pass their filters)
How to invest $1 million in 2024
The lead indicator for Dion Hershan’s best trades (and two high quality stocks for the ”slow grind” ahead)
Ben Griffiths’ small cap playbook as animal spirits awaken
2 killer growth stocks (and why culture is key to successful small caps)
Trailer: Qiao Ma, Munro Partners
We are in the midst of a social, economic, financial and political crisis
Invest in what you know, avoid what you don’t: Lessons from a Hall of Fame fund manager
Emma Fisher: Why it pays to be bullish (and the most outstanding idea on the ASX today)
Matthew Kidman: Get ready to run with the bulls
Hedge fund managers never name their shorts. This one does...
Create your
podcast in
minutes
It is Free
The Commercial Edge: Unleash the Power of People
The emPOWERed Half Hour
U.S Property Podcast
Aligned Money Show
Dubai Property Podcast
The Ramsey Show
The Clark Howard Podcast