Ann: 2016 AGM Presentation, page-52

An over or undersubscription is only representative of the market's perception of the business model. Take Dicker Data for example. There was a capital raising at $1.75 not too long ago - it was undersubscribed.
The business model itself is perfectly sound and the company is performing nicely. However, some investors took no interest for reasons beyond my understanding. They may have had their fill already, or just not interested in the sector... It doesn't mean the investment wasn't worthwhile, but rather that perceptions are not always in line with reality (unless of course, you believe the Efficient Market Hypothesis)

There are countless examples of this sort of result.


I know this is a little off-topic, but I'll go one step further:
When you apply the concept of 'second level thinking' (Howard Marks outlines this well) to this, you notice that great investment returns are found when the general perception is not in line with reality, and you take advantage of this discrepancy.
If you invert this, it also means that when you take your queues from the market itself, you give up the chance to make large gains.

So ignoring volume may actually assist in achieving greater, not lesser, returns, as you are no longer making Mr Market your master, but your servant.


For one of the Oaktree memos on second level thinking, see here:
https://www.oaktreecapital.com/docs/default-source/memos/2015-09-09-its-not-easy.pdf?sfvrsn=2