WEEKLY WRAP

Many things can and do go wrong in small cap investing, so we found it was useful to note and understand what exactly went wrong with any of our companies that had a bad year, compared to what we thought should happen.

During the week one of our long term holdings Minbos Resources (ASX:MNB) convincingly ticked past a 500% share price rise since we first invested over a year ago, a huge milestone for any small cap investment.

An explainer of how green hydrogen works or which critical metals are required to create an electric vehicle battery are usually buried deep in the special interest section of a newspaper, not on the six-o’clock news. This means that green hydrogen is starting to become part of the public interest, a huge boon for the sector.

Small cap markets were up and down again this week - some days were red but it seems like there are always new investors still interested to buy waiting to come in the next day.

It’s been another volatile week and the small cap market doesn’t seem to know what it wants to do, delivering some ups and downs during the week.

Earlier this week the mainstream news had everyone worried that Evergrande’s default and its ripple effects in the global economy might be the start of another market crash.

Aside from VUL raising a whopping $200M and then trading $72M of volume on Friday before its entry to the ASX 300 next week... uranium continues to be the story of the moment.

Readers who have been with us for a few years know that our best gains have come from identifying high conviction investment themes early, taking positions in quality companies with good management and then patiently waiting for the market to catch on.

The boring small cap market months of “Sell in May” and “Tax loss selling June” seem a distant memory now as the small cap market was running hot again this week, with most of our portfolio stocks having a good run.

Kuniko Ltd (ASX: KNI) is the biggest story of the week after its 20c IPO on Tuesday. Two days later the share-price exploded to as high as $3.60 on massive volume , going into a price query trading halt before re-opening on Friday, where it spent the day pretty comfortably bouncing around the $2 mark on an outrageous ~$64M shares traded.

Remember a couple of weeks ago when the small cap market was roaring and everything was going up? Seems like an eternity ago now after the majority of the small cap market took a beating this week.

The market definitely seems to be back this week with a sea of green in many small cap portfolios, adding to the general positive mood and attracting investors from the sidelines as they hear stories of paper profits.

The small cap market has roared back this week after a couple of boring months during “sell in May and go away” and “June tax loss selling”, followed by a pretty limp start to July as many investors were unsure about coming back in.

Here’s what happened this week on Next Investors We recently increased our investment in Alexium International (ASX: AJX), Vulcan Energy Resources (ASX:VUL, FWB:6KO) released probably the most significant announcement in its history and more...

This week Next Investors covered the unusually high amount of news coming out of Europe in the EV space, we also provide commentary on the LCL cap raising and a full summary of the week gone by.

It’s been a very busy week for us as we followed key events that positively impacted some of our investments in VUL, EMN and PRL - and today we provide a few extra comments on what happened with some of our other portfolio companies.

The new financial year arrived this week and it certainly delivered what we were hoping for with many of our long term portfolio companies reclaiming some lost ground in a suddenly buoyant small cap market.

Another week of June tax loss selling behind us and only a couple more days to go… it wasn’t as bad as we expected. Visible strength in small cap share prices last week tells us that money on the sidelines may have jumped out of the gate early and is flowing back into the small end, perhaps to pick up some tax loss battered bargains before a bounce.