Contrarian investing is a like an extreme form of value investing; contrarians will make investments that even a bold value manager would baulk at. It’s a fact of investing in unloved (and, in some cases, distressed) companies that some of the companies you invest in will fail. Simon Mawhinney, Chief Investment Officer at Allan Gray Australia, says that when seeking to separate the turn arounds from the future bankruptcies, the first step is studying the balance sheet.
In the short video, Simon explains why some of their best investments have come from investing in companies trading on a high P/E Ratio.
