Antony Bolton - Investing against the tide

- Cash is King
Cash generation is the key

- Management talk

One of the main inputs for my investment process has been talking to the management; meeting management is ok but not for (mis)guidance; alignment of incentives. Recommend in management you trust

 - Valuations

Look at charts extending beyond two business cycles, credit spreads, earnings upgrades vs downgrades

- Sentiment

Falling prices create uncertainty and concern, rising prices create confidence and conviction. Successful investment is a blend of standing your own ground and listening to the market.

- Portfolio construction

Start with a small stake and increase stake as conviction builds

Valuations

- believe in relative valuations over discounted cash flow models

Special sits

- best recovery stocks are with those companies where new management comes

Technical analysis

- lets you cut losses and run profits; long term trend is up, hence optimistic bias is good; markets make v shaped returns at market tops and bottoms

Market timing

- Historical pattern of bull and bear markets (don't fall prey to turkey problem)

- indication of extreme optimism or pessimism are good contrarian bets

- Look at long term valuations P/B or P/FCF