Finding interesting opportunities in Europe's cyclicals

For most of the world, the economic recovery from the Global Financial Crisis has been weak compared to previous cycles.

Interest rates are low or negative, and corporate profitability has grown more slowly than in previous recovery periods. For several years, equity investors have reacted to this by seeking out stable, safe companies. Quality is an attractive attribute, and I am willing to pay an appropriate premium for this. However, this trend has reached extreme levels compared to history and investors are in danger of throwing the baby out with the bathwater. Basic materials (chemicals, metals/mining companies and steel producers) are cyclical and so have customer demand that rises and falls wit...