Rising geopolitical tensions, ‘draconian’ lockdowns across the country and a market flush with easy cash have made the last 12 months an interesting time for investors, according to Alex Waislitz.

That hasn’t stopped the billionaire founder of Thorney Investment Group from growing the share prices of his two listed investment companies, Thorney Opportunity (ASX: TOP) and Thorney Technologies (ASX: TEK) during the “challenging” period.

Even so, Mr Waislitz noted it’s a confusing time for investors as markets continue to give off mixed signals about what the future may hold.

Speaking to Reach Markets ahead of his second appearance on The Insider, Mr Waislitz noted that governments globally pumped money into their economies through numerous stimulus channels, notably support for furloughed workers and new infrastructure spending.

At the same time, interest rates have remained “stubbornly low” despite briefly appearing to trend upwards earlier in the year.

On a geopolitical level, Mr Waislitz noted China’s relationships with other countries, notably the US and Taiwan, have continued to deteriorate, while the recent regime change in Iran is “perhaps even strikingly more dangerous”.

“Nothing gets easier on the global political front,” he added.

The Australian political landscape has also raised some concerns for Mr Waislitz.

“At the moment we’re seen to have arguably the most draconian lockdown measures in the western world,” he said.

“It seems from my perspective, and from talking to a lot of people, that decisions are being made around industries without much consultation with industry leaders.”

“I would prefer it the other way around, with good consultation and a lot of shared decision making that results in a more pragmatic approach to dealing of course with the health concerns, but also the economic concerns and wellbeing of individuals in terms of their financial livelihoods.”

As all this plays out however, markets remain near record highs and many experts struggle to reach a consensus about where we go next, Mr Waislitz said.

“There are many who think that, particularly with the low interest rate environment and the amount of cash on the sidelines that there’s no reason markets shouldn’t continue to trend up,” he said.

“But there are others who are nervous about multiples that are being priced on a lot of stocks, and at the same time the looming threat of inflation.

“I don’t think I’ve been in a situation before where speaking to a bunch of smart people will give you different views on the markets,” he said.

Happy to be of service

While value investing appears to have fallen out of vogue in recent times as investors flock to growth and tech stocks, Mr Waislitz said he still believes value will always come out eventually and has continued to focus on value names in the Thorney Opportunity fund.

Even in the past 12 months, when by Mr Waislitz’ own admission market trends have been “going against the nature of the portfolio”, TOP has still recorded a successful year.

“We’ve done pretty well in the last 12 months, increasing our dividend, increasing our share price, NTA has grown after tax and fees more than 10%, we paid a fully franked dividend,” he said.

Excitingly, Mr Waislitz said he’s taken several positions through TOP he expects will see value come out within the next 12 to 24 months, particularly within the mining and infrastructure services sectors.

“There’s an enormous amount of money being dedicated by state governments and federal governments to the infrastructure sector,” he said.

“I’m not talking about tens of millions or hundreds of millions, I’m talking about many many billions here and those are multi-year decisions. You want to be positioned in the service companies that will take full advantage of that.

“We’ve also seen an enormous amount of money raised in the last 12 months in the mining sector. As that money is deployed into exploration and more production, we’ll see mining services companies be the beneficiary of that.”

Mr Waislitz will be joining us for ‘The Insider: Meet the Fund Manager’ on Friday 27th of August at 12 pm (AEST) where he will discuss his 3 favourite stock opportunities, why he thinks select value stocks could have their moment in 12-24 months and his approach to investing in international unlisted companies. This will be followed by an interactive Q&A. Book here.

‘The Insider: Meet the Fund Manager’ is a free webcast series which gives you direct access to prominent fund managers. This session is live and interactive and includes a live Q&A. Spots are limited, so please book into this session as soon as possible.

Reach does not assume responsibility for the accuracy or completeness of any information provided, and the views expressed are not reflective of Reach Markets position.

Any advice contained within this presentation is general advice and does not consider your personal circumstance, you should consider whether it’s appropriate for you.

The information we are giving you is for educational purposes only. “Investing is about understanding your risk” and every time you invest in the share market there is a risk of loss.