Reddit Trading
- Product of new social media universe, but there are always these sorts of events in history (Tilray, Hertz)
- Relatively easy self-correcting mechanism
- Views it as another day in the markets, not even a story, and does not impact how Mark invests
Re-Opening Stocks
- Feels like the re-opening trade is over
- Most of the stocks that will benefit from a re-opening are back to pre-pandemic levels (travel, leisure, retail, etc.)
- Weird zone where maybe we're reopening & maybe we aren't
- Is there enough pent up demand to move these stocks to the next level?
- Hard to figure out because people have been buying stuff from their houses
- Maybe travel…but hard to get the timing right with restrictions lifting
- Complexity is enormous
- A lot of the important stories in the market now that are not related to the virus
- Need to look beyond the next year or 2
- Excited about interesting privates coming to market, wiping out existing businesses
- So many great ideas as people apply technology in new and innovative ways
- 'Stop thinking about the virus and start thinking about what the world is going to look like in a couple years'
Innovation in Global Innovators
- Not everything in Innovators is 'innovative'
- Mark also likes to own 'broken and getting better' - example: Royal Caribbean Cruise Lines
- Innovation will always be a core tenet of the fund
Decrease in Tech Exposure
- Climate change is the biggest investable theme in the market today - hydrogen economy, solar, etc.
- A lot of these stocks don't sit in technology sector - they are in industrials, utilities
- Big boring companies doing interesting things again
- Drift from tech is due to looking for green energy companies across the globe
Cryptocurrency
- Very important but thinks it's still a solution looking for a problem to solve
- Not much use for it right now
- Mark has indirect exposure, but not an area to get easy exposure to today
Overall Market, Inflation
- Thinks markets are fine - keeps reading about 'bubbles' but he's been reading about bubbles for the last 10 years
- Things that drive the market: innovation and economic fundamentals
- Innovation is on fire - there is so much change, so many new biz models, so much new going on in biotech, green energy
- Innovation is deflationary - we get more efficient at using resources
- Fed wants to print money until we get inflation
- Japanese government has been spending money for 20 years and there is still no inflation
- On one hand we have massive stimulus and on the other we have massive innovation
- What ends it? The Fed decides to raise rates - 'that’s what always ends it'
- Overall, thinks market is expensive, probably bubbles in places, but in general the market seems healthy and is broad
Power Companies
- Mark loves industries that no one cares about anymore and something is changing
- Electric Utilities: nothing has changed in 20 years - Mark used to cover the space as an analyst years ago
- If you believe in a green agenda and transformation of the power grid, the amount of money that is going to be spent moving away from fossil fuels is huge
- Utilities are paid to spend money - they build something new and make money off it
- Utilities could have a huge spending boom ahead of them
- Portfolio Construction:
- Utilities are super cheap right now
- Great diversifier to a growth oriented portfolio like Mark's
- If the market is a bubble and we see a pullback, utilities should be a good place to be
- If Mark's right, the spending and innovation that could occur within utilities could be huge
- Opportunity for utilities to be a part of the protection & rebound
- Still learning the space, very intriguing, still early
ESG in Mark's Process
- ESG as a major theme started 18 months ago in Europe and has now spread everywhere
- We have an entire ESG team at Fidelity
- Every analyst at Fidelity now rates a company on ESG prospects alongside their normal rating process
- Very interweaved into portfolios
- Not all parts of ESG are equally investable, not to say they're not all important