News & Insights #17

Stampedes *** early days for a promising razor - razorblade business *** HK staples de-rating *** and more

Links, references & more

• Stampedes

  Fascinating how fast investor sentiment can turn. This year, there were several instances where I was over-run by a hungry herd of investors when I tried building a position. This week, the herd reversed course.

  

  In the last few years, I have been diversifying my portfolio towards a) small/microcaps and b) (absurd-)cheap, high dividend-yield stocks. If this week marks the start of a longer downturn in the equity markets it will be a good test to see how that strategy holds up vs the often high valuations of western large/mega-caps. Unfortunately, in really violent downturns, correlations among stocks tend to move up, and stocks all go down indiscriminantly, quite like we saw on Friday.

  Having a sizable cash position helps during such times.