Auscap Asset Management founder Tim Carleton invests in companies with good track records – so don’t expect to be shocked at the Sohn Hearts & Minds conference.

Why is Auscap so bullish on Mineral Resources?

This trio of businesses are high quality, so sooner or later the market will recognise them for the gems they are.

Cars and motorbikes were all the rage during the pandemic when Australians shied away from public transport. Can these auto businesses grow past the sugar hit?

Opportunities often come at moments when fear and uncertainty are causing market dislocations and lower equity market prices. This is when stocks are on sale. Yet the inclination of many, looking at a decline in the quoted value of their portfolio, is to be a seller rather than a buyer in such markets. Elevated inflation is currently causing central banks to rapidly increase interest rates around the world. This has potentially negative implications for economic activity, corporate earnings and the discount rate used to price equities. We would make three observations in this environment.

Ask A Fund Manager: Auscap Asset Management's Tim Carleton tells how investors need to strike while bargain ASX shares are still cheap.

Inflation is the topic du jour. And for good reason. Inflation in the United States is at the highest level in 40 years, running at a staggering annualised rate of 8.6%. In Australia, inflation was 5.1% at the end of March, the highest reading in over 20 years. As a result, market participants are fixated on the impact to financial markets from central banks trying to lower these numbers through interest rate increases. But as legendary investor Stanley Druckenmiller has said, “never, ever invest in the present ... you have to visualise the situation 18 months from now, and whatever that is, that’s where the price will be.”

Tim Carleton of Value-focused fund manager Auscap Asset Management believes now is the time to buy Aussie stocks. “I think you want to be as overweight Australia as you can possibly stomach for the rest of our lifetimes,” he told attendees at a recent webinar. Why Australia, and not the US or Europe? Carleton believes the goalposts have moved for these offshore markets and that Australia is positioned more favourably. Citing several structural reasons for this view, he outlines the types of cyclical companies his team likes and discusses four stocks they’ve been buying in recent months, including one that’s a clear favourite.