202. War, inflation and the threat of recession – why history tells us to be contrarian in difficult markets

Although Europe is once again under the microscope for all the wrong reasons, Waverton European Capital Growth co-manager Chris Garsten believes the much-maligned market is now a far more compelling investment proposition than it was eight months ago. He also talks to us about the threat of recession and why he feels it is important to go against the consensus when markets are difficult. Chris also talks to us about why the political need for the Euro to succeed will prevent any further break up. He also runs through the cyclical recovery opportunities he is finding in a post Covid world and the importance of having a strong investment process to find opportunities in the ESG space.
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The managers of Waverton European Capital Growth fund focus on finding companies whose management interests are aligned with shareholders, have earnings visibility, pricing power, cash generation and return on capital. But companies don’t have to have all these attributes at the point of investment – indeed, many of their best ideas are businesses in the early stages of reform.

What’s covered in this episode:

  • Why challenges equal opportunities in a post-Covid world and the attraction of cyclical recovery stocks
  • How the semiconductor shortage benefitted car companies
  • Why finding ESG winners is anything but straightforward
  • How new EU rules around sustainability could impact capital flows into miners
  • Why he is a fan of Scandinavian/Nordic companies and the importance of “strategic thinkers” like Nestle and Rush
  • His fears about recession in Europe and why history tells us to be contrarian in difficult markets
  • Why the political will for the Euro to succeed means it is unlikely to break up
  • Why Europe looks a more interesting investment than it did eight months ago
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