In my last column, I discussed how estimate revisions can be a valuable element of the research process and can help identify companies whose prospects are improving. I used Ashtead (AHT) as an example as it had seen a pretty spectacular share price performance, partly on the back of positive estimate revisions and partly as a principal beneficiary of the theme of increased infrastructure spending in the US.
When I was a hedge fund analyst, I worked for global funds which in one sense was a major advantage but also brought its own constraints. If you have the luxury of investing globally, you can of course trawl a wider field for interesting ideas – I much preferred that flexibility. But there is additional work to identify the best possible global vehicle to play a particular theme.
I once interviewed well-known US investor Mario Gabelli and he described how he started investing globally in the late 1980s; this was very early and there were very few firms operating on a global basis then. Such investing is much more widespread today and I believe it will continue to grow in popularity because it gives the practitioner a major advantage.