A year ago I sat down with Oscar Oberg, lead portfolio manager at Wilson Asset Management. His thesis then was that small caps were beaten down and due some mean reversion.
Alas, small caps haven’t done much since then, with the Small Ords returning 3.91%. Yet Oscar’s thesis also remains unchanged. 
In fact, it’s gotten stronger!
Not only is he positioning for a rebound in smalls and microcaps, he’s doing it with overweight exposure to consumer discretionary, a sector that has been tarred and feathered by today’s macroeconomic landscape of high inflation and high rates. As Oscar puts it, “there’s no mean reversion without consumer discretionary.”
In today’s episode, Oscar lays out this thesis and the companies that make it up. 
He also discusses:
the relationship between the tech rally and small caps;
generating return with short-term tactical trades; and
how he deals with low liquidity, 
and the primed aged care stock under takeover.     

Note: This episode was recorded on Tuesday July 20, 2023.


Timestamps

0:00 - START
1:50 - When will small caps bottom?
4:30 - No small cap rally without consumer discretionary
6:30 - Profit taking
7:30 - Why large cap tech matters to small caps
10:14 - 30-40% rally is not out of the question
14:30 - Harvey Norman's (ASX: HVN) property backstop
16:00 - Wearing the volatility
17:00 - Industrials
20:20 - Going tactical
24:15 - Mermaid Marine
26:30 - Body language matters
27:30 - City Chic (ASX: CCX) was a mistake
29:20 - Managing liquidity in small caps
32:45 - Takeover target
34:50 - Balance sheets look good
36:55 - Going public too early
40:25 - The classifieds company for the bottom drawer

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