Tassal – something smells fishy

Founder and Chief Investment Officer of Montgomery Investment Management
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It has been hard to find high quality businesses trading at attractive valuations in recent times. With share prices growing faster than earnings in recent years, valuations have started to become stretched across the board.

At times like this, one option for investors is to lift their heads above the immediate detail and scan the distant horizon; to try to spot large structural changes early and position accordingly for the long term. This is not easy to do, but potentially very profitable. For example, investors who anticipated the strength and duration of the mining boom could have enjoyed many years of rising tides.

Food bowl oversold

One potential area of opportunity is agriculture. It has been said that Australia should aspire to be the “food bowl of Asia”, and there are some obvious reasons why this might be argued. In particular, the emergence of a very large middle class in Asia with increasingly Western tastes, combined with Australia’s long-standing agricultural credentials and clean environment.

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