The difference between a stock price and a company’s value

In episode 27 of Stocks Neat Co-Portfolio Manager Gareth Brown and CIO Steve Johnson discuss the recent performance of small caps and the psychology of investing. 

Understanding the psychology of ourselves and others can go a long way to helping us navigate through life. Markets and investing is no different. Understanding this can enable us to avoid biases and regulate emotions to make rational and effective investment decisions. 

In the episode, Gareth and Steve discuss the works of Kahneman and Tversky, and how their own personal experiences of investing have been changed and shaped over time. Listen to the full episode to find out why.

“You could make money out of the stock market without ever looking at a balance sheet or PnL if you really understand investing psychology when people are behaving irrationally”

In episode 26 of Stocks Neat Co-Portfolio Manager Harvey Migotti, Analyst Nicholas Plessas and CIO Steve Johnson sit down to discuss the year just passed in markets, most notably a strong rally in uranium and the small cap recovery at the end of 2023.

The uranium story grew throughout 2023 with the spot price increasing through the year. This was discussed in detail in Stocks Neat episode 22, where Harvey and Steve explored factors leading to a recovery in this market. Since then, the uranium spot price has continued to rise and has now reached over 100 USD/lbs for the first time since 2007.

The small cap recovery towards the end of 2023 came as inflation eased across the US and other developed economies. However, the recovery domestically has been largely limited to profitable small caps thus far.

Listen to the full episode to find out more about Steve and Harvey's views on the year.

For our holiday edition of Stocks Neat, Alex Shevelev, Portfolio Manager of the Forager Australian Shares Fund, is filling in for Steve and Gareth and he’s joined by a special guest, Will Lopes. 

Will is the CEO and Managing Director of Catapult (ASX: CAT) which has been an investment of the Australian Shares Fund for a number of years. With origins in the Australian Institute of Sport, CAT has pioneered the sports wearables space and their product is now used by thousands of teams around the world. Despite the impressive growth seen by CAT, Will believes there is significant room to continue growing the business. 

Listen to the full episode to hear how CAT is helping professional sporting teams reach their full potential using data analytics and where the business sees the opportunity from here.

“There is still about 80% of the market that has yet to be penetrated. While we're the leaders, we continue to find really, really healthy growth within that space today.”

In the latest episode of Stocks Neat, Steve Johnson and Harvey Migotti discuss what they learned on their recent trip to the US and Japan. 

Their trip started in Chicago at an industrials conference, which gave the pair a  temperature check on what is happening in the US economy. Then, Steve and Harvey visited Tokyo to meet with a few companies undergoing transformational changes in the IT space. 

Listen to the full episode to get their insights from their recent trip abroad. 

In episode 23 of Stocks Neat, Co-Portfolio Manager Gareth Brown and CIO Steve Johnson sit down to discuss the opportunities available for investors in the current interest rate environment, following our CIO Letter, "Reasons to welcome the death of TINA”.

In October, yields on US Government 10-year bonds hit 4.98%, a level not seen since the mid-2000s. With rising yields has come weakness in equity markets as investors take advantage of risk-free returns. So does the death of TINA mean disaster for equity markets? You might certainly think so. For Steve and the Forager team, however, we feel far more comfortable with TINA in the ground.

Listen to the full episode to find out why.

“We are living in a world where capital has some element of scarcity to it, and people are making sensible decisions about where to allocate capital and what businesses get it.”

In episode 22 of Stocks Neat, Co-Portfolio Manager Harvey Migotti and CIO Steve Johnson sit down to discuss the growing interest in uranium, with the spot uranium price up almost 10% since the start of August and 27% so far in 2023.

It has been a tough period for uranium investors over the last few years, with no new mine supply and rock bottom prices, investment in the sector had fallen to an all-time low. However, due to a number of factors, including the increased acceptance of nuclear energy as a cleaner and safer form of energy, it seems like things are finally starting to go right in this space. 

Forager identified an attractive setup for uranium back in 2021 and has been invested in the sector since, but what do Steve and Harvey think is in store for the sector from here? And what is their preferred way to get exposure to this theme? Listen to the full episode to find out. 

In the latest episode of Stocks Neat, Steve and Gareth discuss the recent news surrounding the GLP-1 inhibitor drugs taking the world - and stock markets - by storm. Originally used to treat Type-2 diabetes, clinical trials have shown GLP-1 drugs may be highly effective in causing weight loss. While the most common form of the drug requires regular injections, Steve believes that the forthcoming oral version could be a "game changer" for the future of health. 

But are GLP-1's really a magic pill for weight loss? And how do we think about the future of portfolio companies like ResMed or Viva Leisure in light of this news? Listen to the podcast to find out. 

In episode 20 of Stocks Neat, Co-Portfolio Manager Gareth Brown and CIO Steve Johnson sit down to explore the global economic outlook, its goldilocks nature, and its implications for investing.

Switching from their usual whiskey, Steve and Gareth opt for a coffee as the conversation kicks off with a reflection on the past year's positive investment returns, despite being a year marked by market scepticism and uncertainty. They explore the highlights and lowlights and reiterate an ongoing focus on smaller cap companies, given the potential for these to pay off in a relative sense over the next five years.

Steve and Gareth follow on with a deep dive into the enigmatic world of housing markets, interest rates, and their far-reaching economic impacts. They discuss the surprising resilience of house prices amid rising interest rates, exploring various factors influencing this phenomenon. They share their perspectives on the economic recovery and its potential impact on different industries and stocks.

We want to extend our apologies for the slight delay in recording July's episode, which is attributed to a bustling end to the financial year and the Forager Roadshow. Watch it here in case you missed it.

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For regular videos, investment insights, and fund updates, visit www.foragerfunds.com.

In the latest episode of Stocks Neat, Co-Portfolio Manager Gareth Brown joins CIO Steve Johnson to shed light on the commercial property industry and the broader issue of unlisted assets, particularly focusing on Australia's super funds and their refusal to recognise the real value of some of their unlisted assets.

The second topic they explore is the current bull market, dubbing it the "bull market that nobody believes in," highlighting the lack of enthusiasm despite statistical evidence of its existence, especially in the larger tech companies in the US. The conversation touches on the remarkable rise of artificial intelligence and its current bubble-type behaviour, using NVIDIA as an example to explore the implications of high valuations relative to earnings.

Gareth and Steve also touch on inflation and its impact on the economy, mentioning positive developments out of the US, with Australia likely six months behind, given the persisting labour pressures. 

Tune in and join Steve and Gareth as they try a locally made American Pale Ale by Batch Brewing in Marrickville, Sydney.

Show Notes:

• Joel Greenblatt podcast (mentioned by Gareth) - IC Interviews: Joel Greenblatt
• The Economist article on San Francisco - Downtown San Francisco is at a tipping-point

You can also find us on:

Twitter - @ForagerFunds
Facebook - Forager Funds Management 
LinkedIn - Forager Funds Management
Instagram - Forager_Funds

For regular videos, investment insights, and fund updates, visit www.foragerfunds.com.

After some time on the sidelines, Co-Portfolio Manager Gareth Brown is back in the hot seat, joining CIO Steve Johnson for the latest episode of Stocks Neat as they delve into lessons from the recent Berkshire Hathaway meeting.

They reflect on the meeting’s evolution over decades, how size has impacted investment decisions and the increasing conservatism in Berkshire Hathaway's investment strategy.

Additionally, Steve and Gareth revisit a topic previously explored at the beginning of the year - the underperformance of small-cap stocks. They examine the current valuation differential between small and large-cap stocks, with relative valuations for US small caps at their lowest levels on record. They shed light on what this means for investors and discuss the potential for a change in sentiment towards small-cap stocks as we enter, and ultimately emerge from, any recession.

According to recent research from Global Alpha Capital Management, small caps tend to underperform going into a recession. But that underperformance typically stops right around the onset of a recession. From that recessionary onset, small caps have outperformed large caps over the following 3-4 years in all 6 US recessions for which the company had data. 

Pour yourself a glass of whisky and join Steve and Gareth as they explore these topics while sipping on a glass of Super Nikka Japanese Whisky.

Show Notes:

• Stocks Neat episode on small caps - The contrarian case for small-caps in 2023
• Steve's recent Livewire article - Why a recession might be needed for small caps to work
• Global Alpha article - Small cap is back

You can also find us on:

Twitter - @ForagerFunds
Facebook - Forager Funds Management 
LinkedIn - Forager Funds Management
Instagram - Forager_Funds

For regular videos, investment insights, and fund updates, visit www.foragerfunds.com.