Ardevora's Jeremy Lang explains why he continues to have a nervous view towards many sectors and sticks to his 'lower risk' principles when it comes to investing.
While we have mentioned our negativity towards natural resources companies a few times previously, it is worth mentioning again as this sector has been dominating laggard tables over numerous time periods. This period of extreme underperformance could tempt investors to once again buy into stocks in the sector. We believe company managers in the natural resources sector are in denial about the likely efficacy of their past investment decisions, which appear to have often been taken with overconfidence and myopia. Past hopes now frame the way managers respond to disappointment and risk...
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