Matt Geiger: Seeing the Pendulum Swing Back from Growth to Value Investing
Tom welcomes back MJG Capital Managing Partner Matt Geiger to the show.
Matt discusses his fund’s performance during 2021 and how things have changed from 2020. 2021 was overall flat for the fund but marginally up. He explains their weightings for precious metals and his long-term investment approach. There are advantages to being more patient than other investors.
Matt is excited about the long-term prospects for energy metals due to the global decarbonization efforts. Energy metals are going to be a good space to be in but be careful of overall market risks. Ag commodities and fertilizer are also looking good.
Removing emotion from trades is crucial as well as having a good macro framework to follow.
Matt discusses the overvalued S&P and how equity markets are dangerously priced. Sentiment and valuations are currently lining up to bring serious concern regarding these markets. Equities are now valued higher than during the Dot Com bubble and in the last year, retail investors have put more money in markets than in the last 19 years combined. We’ve reached euphoric investment levels.
Passive ETFs have created a feedback cycle of re-investment but eventually, we will have a true risk-off event. This will bite investors at some point.
The major trends will eventually reverse so it’s important to have a defensive approach. U.S. performance has to reverse compared to the rest of the world at some point and begin to tread water. The focus on growth over value is due to lower interest rates and the resulting economic forecasts.
Time Stamp References:
0:00 – Introduction
0:52 – The Year Ahead
6:36 – Long-Term Approach
9:00 – Position Trimming
13:14 – Macro Framework
17:06 – S&P Risks
22:00 – ETFs & Crashes
24:22 – Trends & Future
28:45 – Position Concentration
31:40 – Finding Deep Value
35:18 – Prospect Generators
38:53 – Private Placements
42:48 – Wrap Up
Talking Points From This Episode
- Fund performance and state of the equity markets.
- Energy metals potential over the next decade.
- Passive ETFs create outsized market risk.
- Finding deep value in resource companies.
MJG Fund Review: https://mjgcapital.com/wp-content/uploads/2022/01/January-2022.pdf
Mr. Geiger is Managing Partner at MJG Capital, a limited partnership specializing in natural resource investments. The partnership is long-only and holds a concentrated portfolio of resource equities. Investments include explorers, developers, and producers of precious metals, energy metals, industrial metals, and ag minerals. Matt is a graduate of the Wharton School at the University of Pennsylvania and previously founded a venture-backed technology company most recently valued at $150m.