Expert: Andrew Page - How we can all invest in Aussie small caps (and Bitcoin)
Feb 4, 2025
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In this enlightening discussion, Andrew Page, Founder of Strawman.com and an expert in small-cap investing, shares his insights on the burgeoning potential of Australian small caps for 2025. He dives into the historical trends of small-cap performance and strategic investing tips. Page also reveals his evolving perspective on Bitcoin, highlighting its role as a revolutionary form of money rather than just an investment. He emphasizes the significance of thorough research and maintaining belief in one’s investment choices amidst market fluctuations.
Predictions for 2025 suggest that small caps may outperform large caps, yet historical caution should temper investor enthusiasm.
Successful small-cap investing requires thorough research on fund managers and focusing on those with proven track records and personal stakes.
Bitcoin's evolving perception as a legitimate asset class reflects its growing acceptance among traditional investors and its impact on financial paradigms.
Deep dives
Revisiting Small Caps
Small-cap companies, which are smaller firms typically worth up to a few billion dollars, have historically underperformed larger corporations but are now gaining attention. Predictions for 2025 indicate that small caps may finally outperform large caps, with multiple investment firms citing compelling opportunities in this sector. Notable predictions include forecasts from Jeffries and Russell Investments, both suggesting that small caps are poised for a breakout year. However, it’s essential to recognize that past predictions about small caps have often failed; therefore, investors should approach these claims with cautious optimism.
Investing Strategies for Small Caps
When considering an investment in small caps, different strategies can be deployed, such as investing in index funds or picking individual stocks. Passive investing is often recommended as it simplifies the process, but caution is advised, as small-cap index funds may contain a mix of solid and underperforming companies. Investors should conduct thorough research on both small-cap funds and individual stocks, ideally focusing on businesses with clear monetization strategies and competitive advantages. A selective approach can yield better results than simply buying into broad small-cap indices.
Insights from Successful Fund Management
Successful small-cap investing often relies on identifying active fund managers who have a proven track record, ideally coupled with a personal financial stake in their fund. Researching these managers involves examining their previous performance over several years, including their investment strategy and how they manage risk. Transparency and alignment of interests are critical; if fund managers don't invest personally in their own funds, it raises a red flag regarding their commitment. This thorough groundwork is akin to the diligence required when evaluating individual companies before making investment decisions.
Opportunities in the Current Market
As the new year approaches, small-cap sectors have displayed renewed vigor, driven by a recovery from past downturns and increased investor interest. While large companies have continued to dominate performance metrics, many smaller firms are offering appealing valuation opportunities that deserve attention. Active investing communities, like those on strawman.com, often highlight promising companies within the small-cap arena, where careful analysis can reveal hidden gems. Investing in these overlooked sectors may yield significant returns, particularly if market interest continues to shift towards smaller firms.
The Evolution of Bitcoin Perspectives
In recent discussions about investment paradigms, the conversation has shifted from traditional equities to cryptocurrencies, particularly Bitcoin. Initially met with skepticism, Bitcoin has gained traction among traditional investors as a viable asset class due to its decentralized nature and potential for appreciation. The notion of Bitcoin as a commodity rather than a mere speculative investment is gaining popularity, indicating a broader acceptance among institutional investors. Investors are exploring Bitcoin not only for its potential financial returns but also for its foundational role in redefining how value and currency are perceived in the modern economy.
Have a look at the predictions for 2025 from the large financial institutions and one prediction is repeated over and over again: this year is the year small caps outperform.
But here's the thing - look back in previous years and this isn't the first time that prediction has been made.
So on today's episode of Equity Mates Investing, we speak to one of our favourite small cap investors, Andrew Page of Strawman.com, about the possibilities in small caps in 2025.
In the second half of the episode, we also touch on Andrew's changing view on Bitcoin and how he fits it into his portfolio today.
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