Sometimes the stocks that attract the most concerns from investors present the best opportunities.
Throughout 2018, slowing economic growth in China and rising US interest rates dictated, to a significant extent, how many investors behaved.
During this period it was the fast-growing businesses and “bond proxies” that performed the best, while those with cyclical earnings tended to falter. Overall, these trends have led to a premium being placed on safety and predictability.
Given the above, it might seem counter-intuitive to remain invested in cyclical businesses. But as this piece by Platinum Asset Management explains, there are deeper factors at play affecting the long-term performance of different companies, even cyclical ones.
In this piece, you will learn:
- why high valuations are being paid for businesses with defensive but growing earnings
- where investment opportunities can be found in times of market polarisation
- how even notoriously difficult sectors can still comprise great businesses
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