Below is an interesting slide from the QVG guys, who had their semi-annual presentation webcast today. I think they are reasonable investors. The chart is courtesy of my old Mac Bank account manager, Mark Carew, a broker now at Wilsons—a good guy. What it shows is an assessment of positions in small-cap managers, where MC has gone through the disclosed holdings of small-cap managers and constructed a proxy of small-cap exposure.
How to read the chart: The largest symbols indicate the largest common holdings. As you may be aware, there is much copycat investing and momentum investing amongst small-cap funds. So the largest companies on the chart are HUB, PNI, 360, BRG, GMD (I don't know that one), and a group of second-ranking ones. Disclosure I hold BRG PNI and HUB.
So what? being overheld is not necessarily a reason to sell or even to be fearful. many are the strongest performers over the last year or so. but as Buffet says as the stock stories evolve the investor base moves with it from innovators (those that first see the attractive story), then imitators (self-explanatory), to idiots (those that have missed out and are covering the short or jumping onto the momentum too late. the last mob are invariably "weak hands". that means expect excess volatility in the stocks as these guys get shaken loose. This is bias and outcome i try and mentally prepare for, i accept that usually when you see this crowding, you get seemingly irrational and outsized moves on little new info. all part of investing imo. having a view of the shareholder base and its evolution can help rationalise market responses.
of course, it goes the other way, unheld stuff can be attractive if the numbers keep improving.
You may not know that one @Solvetheriddle - but I do:
Disc: Held.
PS: I do not consider them to be a bubble stock, or even overbought; they have one of the best growth profiles of any ASX-listed gold producer and some of that future growth is now starting to be priced in.
There's also a management premium because their MD, Raleigh Finlayson, built up Saracen Minerals (was SAR.asx) from bugger-all to being Australia's 4th largest gold miner (behind NCM at the time, NST and EVN) and then helped organise a merger with Bill Beament's Northern Star Resources (NST), now the largest Australian gold producer. Bill then left to head up Venturex, now called Develop Global, and Raleigh left (earlier than Bill did actually) to start building up another goldie, GMD.
His MO is to buy up all the decent gold deposits in the Leonora to Laverton area of the WA central goldfields (just north of Kal), and he's done a good job so far, with only one major asset always remaining just out of reach, Red 5's KOTH Mill which is surrounded on three sides by GMD tenements. Red 5 is now known as Vault Minerals (VAU) and is run by Luke Tonkin who has been a thorn in Raleigh's side for a while now, particularly in the first half of CY 2023 when Genesis were trying to merge with SBM and then instead trying to buy all of SBM's Leonora assets, which they eventually did (settled on June 30, 2023) however Luke Tonkin (then at SLR - Silver Lake Resources) made it as difficult as he could at the time, but I digress...
Yeah, there's good reason why people have been piling into GMD.
