Skip to content

SmallCaps.co.za

Small Companies, Big Investments

Menu
  • About
  • Newsletter & Research
  • Small Caps & Other Stocks
  • General
  • Blue Gem Research
  • Twitter
  • Email
  • Portfolio
Menu

Tag: investing theory

Management Shareholding Abuses

Posted on 27/08/2020 by Keith McLachlan

OLD ARTICLE – Original posted on June 21, 2018 A traditional view wants a listed company to have their management as large shareholders. This gives them skin in the game, aligns them to shareholders and incentivizes them to succeed. All perfectly good reasons. But, this did not prevent Steinhoff from happening. If anything, this was…

Tax-Free Savings Accounts: Buy Risk & Sell Time

Posted on 26/08/2020 by Keith McLachlan

OLD ARTICLE – Originally posted on June 4, 2019 A Tax-Free Savings Account (TFSA) offers a superb, tax-efficient mechanism to compound long-term investments for South African citizens. In the below example, I use an assumption of 15% CAGR per annum from a basic South African equity investment and assume that you are paying a marginal…

Why Quality Matters for Small Cap Investors

Posted on 26/08/2020 by Keith McLachlan

The below is extracted from the December 2019 Alpha Prime Small & Mid Cap Fund investor letter where I briefly unpack our argument for quality in the small cap space: Quality: Above all else, we try to find good-quality, fast-growing, listed small cap businesses. Value: We invest in the cheapest of these options, constrained by our concentration &…

Lessons: Over-reliance on Management

Posted on 26/08/2020 by Keith McLachlan

OLD ARTICLE – Originally posted on January 7, 2020 The last couple of years have been very hard on those that invest in South African small cap stocks. Unfortunately, me, the Alpha Prime Small & Mid Cap Fund and my (incredibly resilient) investors have been no exception to this. Since the FTSE/JSE Small Cap Index’s…

Lessons: Two-edged Blade of an Anchor Shareholder

Posted on 26/08/2020 by Keith McLachlan

OLD ARTICLE – Originally posted on January 9, 2020 More than any other directive, human beings act in line with their individual incentives. In the natural world and bleeding into modern-day addictions to drugs, social media and pornography, human beings are predominantly incentivized by dopamines. In business, though, human beings are typically incentivized with money. The ability…

Lessons: Mining is (Dam) Complicated

Posted on 26/08/2020 by Keith McLachlan

OLD ARTICLE – Originally posted on February 10, 2020 I’ve been invested directly in a growing, junior coal miner for going half a decade, amongst several other mining-related investments. Likewise, I’ve followed a wide range of mining companies closely for even longer and previously was invested in a mining exploration company and poked around a…

Lessons: Management Over-value Themselves

Posted on 26/08/2020 by Keith McLachlan

OLD ARTICLE – Original posted on January 16, 2020 Per Wikipedia’s definition, “…illusory superiority is a condition of cognitive bias wherein a person overestimates their own qualities and abilities, in relation to the same qualities and abilities of other people.“ People tend to think that they are of above-average intelligence while, statistically, at least half are not….

How Does Acquisitive Growth Work?

Posted on 26/08/2020 by Keith McLachlan

OLD ARTICLE – Original posted on January 4, 2017 Due to consolidation accounting (or “Group accounting”) rules, when one company controls another one (from 50% + 1 vote up to full-control of 100%, depending on circumstances), that first company (or the “parent” company) gets to accounting for both the financial performance of itself and the financial performance of all…

Lies, Damned Lies & Adjusted Earnings

Posted on 26/08/202026/08/2020 by Keith McLachlan

OLD ARTICLE – Originally posted on September 23, 2016 When investing in a listed share, you are buying part of a business and own a portion of its future profits (or losses). Therefore, the per share earnings of a listed company are a big deal for investors with shares rising and falling base on them (or at least…

Forgotten Safeguard: Diversification

Posted on 26/08/2020 by Keith McLachlan

OLD ARTICLE – Original posted on April 7, 2016 The global economy is desynchronised with significantly diverging views at both global and country-level. China could implode, Europe could fragment and USA could falter. All of these could happen. And then you get commodity volatility coupled with massive forex swings (up and down)…. If you listen to…

Sign-up

Want research in your inbox? Sign up here!

RSS Research Reports

  • Renergen – Funding (Almost) Secured
  • Renergen – FY 22 Results – Token Update
  • Trellidor Door Holdings – H1:22 – Series of Unfortunate Events
  • Renergen – Government Investor Highlights Virginia’s Value
  • Sabvest Capital – FY 21 – Great Performance with More to Come

Recent Posts

  • Investment Analyst Society launches IAS Portal
  • Hospitals: Overlooked Reopening Trade
  • Pick of the Education Stocks
Tweets by keithmclachlan

Tag Cloud

alignment of interest analysis analyst buy-side domestic downside education equity executive fundamental analysis fundamentals global growth ifrs incentive invest investing investing theory investment investment theory jse learning lessons management master drilling master drilling group mine mining offshore pennystock returns risk risks sell-side short small cap small caps south africa stock stockpicking stocks theory upside valuation value
©2022 SmallCaps.co.za | Built using WordPress and Responsive Blogily theme by Superb