Category: General

A recent article in the AFR proclaimed “Small caps are ripe for a comeback“, citing the relative underperformance of this space in recent years, and the potential for easier credit conditions later in 2024. It’d certainly be welcomed by those of us that play in this space. As discussed below, the Strawman Index has kept pace with the broader market […]

Negative cash flows usually set off alarm bells for investors, and for good reason. At the end of the day cash is the lifeblood of a business. Still, a closer look at things may just reveal a company that is sensibly investing in its future growth. If you can go beyond the surface-level numbers, and build some confidence in the capital allocation decisions of […]

Wall Street columnist Jason Zweig once remarked that his job is to essentially write the same thing 50 to 100 times a year, but in a manner that keeps it fresh for his readers. The reason, as Zweig points out, is that while markets are in a constant state of flux, the big ideas seldom change. “..while people need good advice, […]

At Strawman we’re all about small-cap investing. “Crypto”, in the main, isn’t much of a focus for most of our members. Magic internet tokens are almost antithetical to any notion of sound, time-honoured investment principles. And it’s hard to think of an industry that has a worse history of blow-ups, Ponzis and grift. But with Bitcoin now back at all time highs […]

The market always offers up something of a mixed bag each results season but, on balance, at least among the most popular stocks on Strawman, what we’ve seen so far has been rather encouraging. Not so much in terms of the immediate market reaction — though we’ve certainly seen some big moves — but in terms of what these numbers say […]

Do you like highly illiquid assets that involve significant trade frictions and costs? Do you like dealing with an army of mostly useless, self-serving middlemen? Do you like assets that require extreme leverage and offer pitiful yields? Welcome to Australian property. I’m currently in the process of trying to secure a house, and I need to get a few things off […]

Over the long run, the main driver of share price is earnings per share (EPS). If, for example, EPS has grown at 10% annually over a decade, you can be reasonably confident that the share price will show a similar appreciation. Consider REA Group (ASX:REA), whose per share earnings compounded at an average annual rate of 27% between 2004 and 2023 (yes, it’s […]

“Life is really simple, but we insist on making it complicated” Confucius  The same could be said of investing, where the complexity bias — a logical fallacy which equates complexity with accuracy — results in a proliferation of highly detailed models and valuations.  But, to paraphrase Joel Greenblatt; if you can easily and simply explain why something’s a great business, and how […]

Things have been fairly quiet on the corporate news front recently, but that’s about to change in a major way as companies begin to release their quarterly and half-yearly numbers.  It’s always a challenging time for investors, who not only need to digest and synthesise a fire hose of information, but also contend with heightened volatility. Anand Sridharan, an investor at Nalanda […]

Happy New Year Investor! We hope you managed some well-deserved time off in recent weeks, both from your usual vocation as well as with your investing. Not that we’re advocating for complacency, but it’s often useful to take a step back every now and then. Partly because it’s important to have some time for a broader reflection on your investment goals, […]