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Alastair Mundy

On Value

Notes and musings from a Value investor

Have the obituary writers got it wrong for Value investing?

Head of Value Alastair Mundy and Portfolio Manager Alessandro Dicorrado discuss some of the reasons why Value investing remains out-of-favour and the outlook for Value from here. Read more

Does it feel like 1999 yet?

1999 was meant to be a once in a lifetime working experience for Value investors. Alastair ponders whether we’re back to those levels. Read more

Talking with Alastair Mundy

Square Mile’s 'Talking with' series speaks to Alastair Mundy on his experiences: how he started, what a typical day is like and what he does to relax. Read more

Value traps… and how to avoid them

In this short video, Alastair and Steve Woolley, Portfolio Manager of the Investec Global Special Situations Fund, reveal some of the questions they ask themselves as they seek to avoid value traps across their portfolios. Read more

In or out of favour?

One of our challenges as Value investors is to ascertain which companies on our watch list are most likely to have futures significantly different from their recent past. But things like facts (earnings) and views (the valuation put on those earnings) can and do change. Read more

What’s on regulators’ radars?

Head of Value, Alastair Mundy looks at some of the themes currently on regulators’ radars that appear heavily on his team’s current list of out-of-favour stocks. Read more

“Value investors just buy junk, don’t they?"

Head of Value Alastair Mundy and Portfolio Manager Alessandro Dicorrado dispel the myth that value investors just buy junk. Watch this engaging conversion about the five categories, or ‘buckets’, they use when characterising the different types of out-of-favour companies they seek. Read more

What goes up…

Where were the red flags? Alastair considers the conclusions that can be drawn from seemingly high flying companies that have capitulated, and even gone bust, within 2 years. Read more

Where to look next, for the next Next

In 1991, Derek Terrington, an investment analyst at UBS Phillips and Drew issued a research note on the Mirror Group Newspapers flotation. Rather inconveniently, his employers were bankers… Read more

Make sure we remember what ‘value’ means

We are at that point of the investment cycle where as a value investor one feels that people are being exceptionally nice to you as some sort of compensation for your extraordinarily poor career choice. Read more

"No one waves a flag at the bottom"

In this series of short videos Alastair Mundy and Steve Woolley reflect on what the last 10 years have looked like for Value investors before turning to their portfolios and the opportunities they’re now seeing with unloved stocks. Read more

Product pricing - art or science?

Kate Swann’s departure as chief executive of airport franchise operator SSP was announced in November and brings the curtain down on another successful reign for her, following her previous excellent efforts at WH Smith. Read more

The Hall of Shame of Meaningless Drivel

The long-awaited market wobble finally came in October. Readers can pick their catalyst of choice. I’m going to settle for more eager sellers than buyers (see below), but there is no end of factors which are clearly exercising investors’ minds currently... Read more

Margin of safety

In the late 1950s, Sandborn Maps was struggling. Sales of its detailed maps to insurance companies were under pressure as a consequence of industry consolidation among its customers and those customers finding superior ways to assess fire risk…. Read more

Lies, damned lies and charts

A lot of the work our team does involves extensive use of statistics. A lot of these are from company report and accounts and can usually be trusted (although fraud and human error are risks to be aware of). However, we also come across data and particularly graphs from a number of other sources. And this is where the fun really begins… Read more

Question time

Some questions come up quite frequently when meeting clients. In this month’s piece, we summarise our thoughts on those subjects which seem most contentious… Read more

The value-investing journey

I read recently that a value investor travels with a stock on its journey from being perceived as truly awful to merely bad. Obviously, this – purposely – oversimplifies the approach… Read more

Yielding to the dividend stocks

With ‘search for yield’ competing as one of the most overused phrases of that period, how can we make sense of this statistic and does it represent a big investment opportunity? Read more

Reading lessons

There can be a temptation when talking about fund management to make the job of analysing and investing in stocks sound as action-packed as possible… Read more

Spring cleaning

A wet Easter weekend provided a perfect time for a spring clean in the Mundy household. As this was apparently a game in which the whole of the family was expected to participate, I quickly went to hide in the cupboard in which we keep our sports equipment… Read more

Feeling foolish

The most notable of the downward movers in the portfolio over the month was the collapse in Capita… Read more

The consequences of complacency

As a team, we invest in companies that are significantly out-of-favour and cheap, based on a sensible assessment of their normalised profitability. A price we pay for doing this is that, generally things look fairly unattractive when we invest. Read more

Scrapping the scrip

In a release at the end of November that would not typically start hearts racing, Royal Dutch Shell announced that it was cancelling the option for shareholders to take a scrip dividend in preference to cash… Read more

Who’s left to buy bonds?

In general, and I speak from bitter experience, it is not much fun being early on a trade - even if that trade is ultimately successful… Read more

Spinning off

Over the years we have found the vast majority of our investment opportunities by focusing on stocks that have significantly underperformed. However, every so often we go slightly off-piste and come across other unloved candidates… Read more

Recovery, brick by brick

I am a sucker for a good recovery story. At heart, Value investors have a great belief in the powers of mean reversion and there is nothing like a well told anecdote to illustrate that not all declines need be terminal. Read more

CRUNCHTIME

One of their current rebuttals to value investors from those investors not in the value church (and boy, there do seem to be a lot of them these days) is that our stocks are cheap for a reason… Read more

Bits and pieces

Having met a number of clients in the last few weeks it is interesting to observe that views are fairly consensual – significant bearishness on bonds (so significant as to encourage a contrarian to be long bonds??)… Read more

Dealing with debt

Not surprisingly, the OBR’s annual reports are typically pretty dry stuff, which makes it all the more interesting when the language used in them perks up…. Read more

Bolton’s magic

A recent desk move reacquainted me with a few items I thought were lost for ever. One of them was ‘Investing with Anthony Bolton’, written over a decade ago by the man himself and journalist Jonathan Davis… Read more

Excessively good?

I was recently chatting to a chap who runs a shop on our local high street. He sells what my mother-in-law eloquently describes as toot (i.e. tat) and appears to have secured a decent… Read more

Taking the medicine

We recently met with the management of one of our poorest investments. The company is now what can perhaps euphemistically call a ‘recovery’ stock and poor trading has necessitated a change in strategy… Read more