Macro/markets – Small caps podcast with Paul Scott – Episode 18 (part 2 of 2)

In this week’s markets/macro podcast, Paul mentions the latest inflation data & comments from the Bank of England, which says it will end 2023 at 5% (up from previous 4% forecast), but we all know how useless their forecasts are!

Also a pep talk from Paul about feeling despondent in a bear market, which has been savage for small caps – AIM 100 down c.40% from the Sept 2021 peak, to bumping along the bottom today. Remember though that bear markets lay the foundations for the big winners of the future!


  • Jim (Notts)

    Great Pod Cast’s Paul, thank you for your efforts, you bring balanced reasoning to an unreasonable market, Beers are on me if our paths ever cross, keep up the good work.

  • Thank you, Paul, for these entertaining and informative podcasts. They have been my best internet discovery over the last twelve months.

  • Hi Paul,
    Just like to say thanks again for all your hard work.
    I enjoy your personal stories.

    FYI, not sure if you have heard of him but there is a gentleman called Ramin Nakisa (pensioncraft) who puts out excellent macro ecenomic stuff on youtube. Ramin is always factual really knows his stuff. Take a look and see what you think. Would be interested in what you think.



  • hi Paul thanks for another couple of great podcasts.

    One personal comment on holding through bear markets – I find it much easier psychologically to hold onto a stock that pays a dividend, especially a growing dividend where I can justify a belief that will continue. Then if the SP is weak, well if results are good and the divi keeps growing, it’s easy to be sanguine as I’m being paid in the meantime. I’m aware this is something of a crutch and I’m certainly missing out on some opportunities, but it’s a style I’m comfortable with and enables me to avoid panic selling etc.

    cheers and keep up the good work

    • Martin, I think you are spot on, more money is lost by switching styles or cutting portfolio exposure during a bear market than by almost any other ” investment sin”. One needs to find a style that is psychologically sustainable, and allows one to stick to that strategy even during the worst of times, in essences I think that is almost the only thing one needs to do in order to have some long term investment success.

      However, as we all know it is also one of the hardest things to do, I have literally seen bear markets and the associated volatility reduce friends to tears and then leave them with permanent “investment scars” having cut exposure or changed styles in the depths of a bear market and often just as the markets take a turn for the better.

    • Hi Martin,
      Good comment, thanks, and I agree. Dividend paying companies are much easier to hold through downturns. I get frustrated when shares I hold keep going down, but it’s important to separate out market moves, with the fundamentals. If a share is soundly financed, ideally with net cash (or only modest debt), is putting out OK to good trading updates, and paying divis, then I largely ignore the share price, and would tend to buy more, rather than selling. Detaching our buy/sell decisions from the share price, is I think quite important. Although if the share price really detaches from reality, in either direction, then that might be a signal that something is happening we don’t know about (bad, or good).
      But generally in bear markets, I think a lot of the sellers are panicked, or forced sellers, not necessarily rational sellers. It might be a fund manager that is cutting positions to raise cash for redemptions. Meanwhile buyers just sit and wait since the price is drifting down. This can lead to explosive upside once conditions turn more bullish, as the sellers are done, and there’s no stock available for the backed up wall of buyers, all trying to time the exact low point! So I do think these conditions will improve, and maybe quite fast, hence why I think it’s important for value investors to remain invested, unless you can consistently time the market well (I can’t!)
      Regards, Paul.

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