Ask A Fund Manager
The Motley Fool chats with fund managers so that you can get an insight into how the professionals think. In this edition, Marcus Today portfolio manager Ben O'Leary reveals the lesson he learnt from the pandemic panic.
The ASX share for a comfortable night's sleep
The Motley Fool: If the market closed tomorrow for four years, which stock would you want to hold?
Ben O'Leary: There's one that jumps out to us here, and we unanimously love it here, and that is Macquarie Group Ltd (ASX: MQG).
It's a pretty simple answer — they just have a track record of making money in almost any environment.
We can't predict the future, we don't know what will happen in the next four years. We can take educated guesses, but if you take us back in time to 2018, there's no way you'd guess that we'd be where we are now after a pandemic and the [US Federal Reserve] rates being where they are and whatnot.
So rather than trying to guess the future, I'd rather invest in a company that will adapt for you and do the hard work.
MF: It's a company that is, again, investing in thematics, aren't they?
BO: Yeah. They really do look at the landscape, and their sole goal is to make money. So if the environment changes and they're not going to be as successful, then they change their tactic. They don't just ride out waves, which I think if you're talking about something that you can have your money in and not be able to get it out for a few years, that's the kind of team that I'd want paying my money.
Looking back
MF: Is there a move that you regret from the past? For example, a missed opportunity or buying a stock at the wrong timing or price.
BO: I think probably everyone learned a lot throughout the COVID period. Unprecedented was the key word that everyone was talking about.
The thing that we learned was not trying to catch trends in the short term. The volatility that came through the market was just enormous. And, honestly, it looked like there was a lot of opportunity to get some quick gains on things as they were rotating around. But in the market, things were literally rotating in a matter of days and weeks, rather than months and years, like they normally do. So things like travel and retailers running giant swings on the back of health numbers and then government incentives.
We know now that it's better to look through that short term and let the peaks and troughs play out, rather than trying to catch them and getting burnt if your timing is slightly off. In the really fast market, you don't have time to set yourself properly. And then by the time you have set yourself, the tide's turned and you've ended up blowing the top.
So it was just a really good lesson of just let the short-term stuff fly by, keep that long-term focus. Well, for us, that's what it is. If you're a trader, it's different. But we've got a three to five year timeline, so keep that focus, look through the short-term and stick to the investment process. Don't try and catch the latest trend.
