• This week, i joined the 'Equity mates' podcast to discuss the current state of the market LISTEN NOW

Two businesses to put in your Christmas stocking

Two businesses to put in your Christmas stocking

At the Montgomery Small Companies Fund, our small caps team’s approach is to invest in businesses that benefit from supportive underlying themes. Two themes we like right now are what we call Stable Compounders and Structural Winners. And we have two preferred stocks – one in each theme – that we think will provide solid long-term returns.


subscribe for free
or sign in to access the article


Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.

This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.

Why every investor should read Roger’s book VALUE.ABLE


find out more



  1. Hi, Roger,

    I don’t get your comments on inflation. Terry McCrann thinks we’re living through the biggest bubble in history. The Fed forecast inflation at 2.4% at the start of the year … it’s running at 6% plus and interest rates are still near zero. I agree with McCrann and unless everything I ever studied about economics is wrong we’re on the verge of a crash that will make 2007/08 look like a picnic. MMT or as it should be known “print money forever” is going to bring the world to its knees.



    • Hi Peter, Thanks for sharing. I respect Terry’s work and experience and I know others, including friends in the industry, who have offered this view. I kind of hope he’s right because we’ll have a wonderful selection of businesses to buy at much cheaper prices. I think the central banks are right however to hang their hat on the base effects working BEFORE the pressure on wages occur. I believe this time next year, the headlines about inflation will have all but disappeared (of course there will be something else to be scared about by then). Provided employment participation rates remain solid, the inertia in wage setting could mean we don’t see widespread rising wage claims at all because this time next year we could see disinflation. The very high rates of inflation today are very much within the narrative we have shared since the start of the year. Everyone expected inflation to emerge – it always does after a recession, and this time we had supply chain bottlenecks too. So now we are in the middle of the inflation scenario we knew was coming and ye, it looks terrible. But we currently expect it to pass, as does the US Fed. Already commodity prices are falling again and we are nowhere near the targets the US fed has set (using ten year averages) to require a rate rise. I know there are people are saying the RBA and the US Fed are idiots but when I look at their experience and qualifications, I know who I’d rather have setting monetary policy! They could be wrong but the markets are usually wrong more often. Just have a look at past yield curves and what markets thought future interest rates would be at any date over the last thirty years. They were 100% wrong every time. If central banks are wrong, the market – when it comes to forecasting anything about the economy – are ‘wronger’. The market has a neat habit of worrying about many things – it makes investors feel they need expert guidance. At this stage I still believe the inflation bogey man is just that. As I said, I hope I am wrong and we get a chance to buy some amazing businesses really cheap again. Another reader Joe, offered the following too https://www.youtube.com/watch?v=ax0NouW21L0

      • Thanks, Roger,

        This is what makes markets. When Buffet said most of Berkshire’s companies were raising prices without any resistance I thought there goes the ‘transitory’ argument. Secondly, Berkshire has been a net seller of stocks over the past four quarters. Then the ex Richmond Fed leader said he wouldn’t be surprised to see rates at 3 -4%. But most importantly my partner says the official inflation rates here are rubbish and her supermarket spend is up by over 6% since the start of the year but her ‘buy’ remains the same. I think this is the first time I’ve ever disagreed with you. Time will tell who is right, Cheers, Peter

  2. Hello Roger

    The financials for MAQ look awful and have done for years, and yet the share price chart has exploded. I don’t see how this sort of company equates with value investing. This is a scenario that makes the share market pretty difficult to understand at times. Would you care to elaborate a bit more please?

    Wes Horn.

  3. Gee Roger you are hammering Waypoint and Macquarie telecom.
    Seems every time I go to an investment talkshow or Finance Website there they are, getting promoted. Your fund/s must be filled up to the gills with these! (Not meaning to be mean Roger just an observation).

    • I’ll always talk about the companies we have some confidence about and or those where we have recently reappraised their prospects and value. In the case of MAQ we have not changed our view of the long term value but the share price has fallen recently, which has rendered it relatively more attractive to us. Of course if we didn’t mention it when we thought it was relatively better value (based on our current view) we’d be criticised for “going quiet” when the chips are down. We can’t please everyone all of the time! And Waypoint gets a run because the proceeds of the sale of a few properties earlier in the year are due to settle soon, and then be distributed. Hope that makes sense Matthew.

Post your comments