Investors' Chronicle
Investment psychology lessons & Ashtead: The Companies and Markets Show
Dec 13, 2024
Alex Newman, a writer specializing in behavioral psychology and finance, joins Julian Hofmann to discuss intriguing investment insights. They dive into Ashtead's move to list in the US and its market implications. Newman elaborates on how biases affect investment decisions, advocating for awareness in behaviors. Hofmann reviews Victrex's surprising share rise amid investor optimism. They also touch on the dynamics surrounding the acquisition of fintech firm Equals, exploring its market potential and the complex landscape of investor reactions.
33:09
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Quick takeaways
- Ashtead's shift to a US listing stems from 98% of its profits being generated there, even amidst challenging market conditions.
- The podcast emphasizes the importance of understanding cognitive biases in investing, suggesting that trusting instincts can improve investment strategies.
Deep dives
Ashtead's Performance and Market Reaction
Ashtead's recent financial report revealed a less-than-expected performance, with rental revenue growth of only 6% and a 14% drop in shares following a guidance cut. The company adjusted its full-year rental growth expectation down to 3-5%, from 5-8%, and anticipated a decrease in capital expenditure. This lackluster update sparked broker downgrades, prompting investors to reassess the company's stability amidst a challenging US market, which accounts for nearly all its profits. Key factors affecting Ashtead include higher interest rates and mixed non-construction spending in the US, invoking a reminder that even in robust sectors, unforeseen challenges may arise.
