Value investing is all about buying stocks that are trading below their intrinsic value.
In practical terms, that often involves investing in companies and sectors that have been shunned by the market due to particular macro headwinds.
"It should be no surprise as to where the pockets of opportunity are," says Tim Carleton, Auscap Asset Management CIO and today's guest on the Rules of Investing.
"They're in the more cyclical sectors that people are most concerned about from an earnings perspective."
In today's interview with Livewire's David Thornton, Tim runs through two retail stocks in the Auscap Long Short Australian Equities Fund that fit this profile. I won't give them away, but one is the only stock on the ASX with a return on equity above 50%, while the other is a long-term compounder poised to take market share.
He also discusses why he's avoided the tech and energy sectors, what he expects from earnings season, why he doesn't put much weight in earnings beats and misses, and why lithium is a crowded trade (yet remains invested in it).
Note: This episode was recorded on July 26, 2023.
Timestamps
0:00 - START
1:30 - Have we avoided a hard landing?
3:30 - Australian base case
4:30 - Reporting season
10:00 - Stock prices follow earnings
12:30 - A checklist for finding value
14:20 - Consumer discretionary in 2023
17:55 - Two COVID beneficiaries primed for growth
20:50 - Avoiding tech and energy
23:00 - Lithium is crowded, but does that matter?
29:20 - Look past the market's time horizon
44:00 - Bottom drawer retail stock
Rudi: AI is the end of investing as we know it
Trailer: Rudi Filapek-Vandyck
The investment secrets of Australia's billionaires
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
Create your
podcast in
minutes
It is Free
The emPOWERed Half Hour
U.S Property Podcast
Aligned Money Show
Dubai Property Podcast
The Ramsey Show
The Clark Howard Podcast