2 Oct 2026
Crisis Investing: Finding Generationally Cheap Companies in Unloved Markets | Michael McGaughy
When a country enters a financial crisis, collapsing currencies and forced selling can make good companies extraordinarily cheap. They can also expose investors to weak governance, capital controls and permanent loss. How can an investor tell the difference?
James speaks with Michael McGaughy, Head of Research at Fusion Wealth Management and portfolio manager of Research Alpha, about his approach to crisis investing. Michael uses a three-part framework - people, structure and value - to find quality companies trading at generationally low valuations in out-of-favour markets.
They discuss the psychology of market panics, signs that selling may be exhausted, currency devaluations, minority shareholder protections and related-party transactions. Michael draws on investments across Argentina, Sri Lanka, Nigeria, Egypt, Turkey and Pakistan, and explains why patience and detailed company research matter more to him than forecasting a macroeconomic recovery.
A clear guide to the opportunities and risks of investing where the news is bad, valuations are extreme and few institutions are willing to look.
For educational purposes only. This episode does not constitute financial advice or a recommendation.
Key takeaways
· Crisis investing begins with extreme valuation, but the company still needs capable owners, sound governance and a structure aligned with minority shareholders.
· A market may be near a bottom when continuing bad news no longer drives prices lower and knowledgeable investors begin buying.
· Michael treats currency devaluations as potential entry points because local shares may already have fallen before the currency adjustment.
· Mapping listed companies to their controlling shareholders can eliminate weak business groups before detailed company analysis begins.
· Related-party transactions can move value from a listed company into privately owned entities and are a central governance risk.
· Patience is necessary, but investors must still manage liquidity, capital controls, forced delistings and the danger of selling winners too early.
About Michael
Michael McGaughy is Head of Research at Fusion Wealth Management in Hong Kong and portfolio manager of Research Alpha, a long-only absolute-return equity fund launched in 2017. His career spans buy-side and sell-side equity research, private equity and fund-of-funds management. He has researched and invested across emerging and frontier markets for decades, using a process centred on the quality of controlling shareholders, corporate structure and valuation.
CONNECT WITH MICHAEL
LinkedIn: https://hk.linkedin.com/in/michael-mcgaughy-caia-647653 (https://hk.linkedin.com/in/michael-mcgaughy-caia-647653)
Minority Report: https://michaelmcgaughy.blogspot.com/ (https://michaelmcgaughy.blogspot.com/)
Astra and Sinar Mas comparison: https://michaelmcgaughy.blogspot.com/2013/08/astra-and-sinar-mas-22-year-perfomance.html (https://michaelmcgaughy.blogspot.com/2013/08/astra-and-sinar-mas-22-year-perfomance.html)
Seeking Alpha: https://seekingalpha.com/author/michael-mcgaughy
(https://seekingalpha.com/author/michael-mcgaughy)
DISCOVER POOR MILLIONAIRES
https://poormillionaires.com/ (https://poormillionaires.com/)
Disclaimer
This podcast is for educational purposes only. The information does not constitute financial advice or recommendation and should not be considered as such. The value of investments and any income derived from them can fall as well as rise and you may not get back the original amount you invested.
