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Capital Ideas Investing Podcast
Risky business: Investing in troubled companies
Aug 29, 2024
Todd Saligman is an insightful analyst from Capital Group focusing on troubled companies, while Steve Watson is a seasoned portfolio manager with expertise in crisis investing. They dive into the unique strategies for identifying opportunities in distressed firms, emphasizing a contrarian mindset. The duo discusses the resilient travel industry during the pandemic, highlighting contrasting outcomes between legacy and low-cost airlines. They also explore the resurgence of the cruise sector and delve into the psychological nuances influencing investment decisions.
25:45
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Quick takeaways
- A contrarian investment approach during market crises can uncover undervalued assets overlooked by others, highlighting fundamental analysis importance.
- The contrasting recovery experiences of the cruise and airline industries demonstrate the necessity of understanding industry dynamics when assessing risk.
Deep dives
The Rationale for Investing During Crises
Investing in companies during times of crisis can present unique opportunities, especially for those with a long-term perspective. A contrarian approach is often required, as these investors are willing to hold high-quality companies through short-term pain for potential long-term gains. Times of crisis typically generate strong negativity in the market, allowing informed investors to identify undervalued assets that others may overlook. This potential arises from the ability to maintain a different view from the prevailing market sentiment, emphasizing the importance of a robust analysis of a company's fundamentals.
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Discover
highlights
Listen to the best highlights from the podcasts you love and dive into the full episode