Billionaire investor Alex Waislitz warns now is not the time for ‘aggressive selling or buying’
Alex Waislitz admits these are no ordinary times for financial markets but believes the coronavirus crisis will pass.
The billionaire investor sent a letter to shareholders in his investment company Thorney Opportunities (ASX:TOP) on Friday afternoon.
In it, he gave his take on the crisis, what he thought should happen and what it means for Thorney Opportunities. He said although Thorney was keeping an eye on the crisis, it continued to look longer term.
“At [Thorney Opportunities], we always keep an eye on the short-term fluctuations of the market however our main focus continues to be on the medium-to-long term outlook,” he said.
“We focus on well-managed companies that have a strong business model, ambition to grow, are adequately capitalised and which represent value based on our rigorous valuation models as well as turn-around situations where we are often the catalyst for changes.
“This investment philosophy does not change regardless of short-term market reactions.”
Waislitz admits the market sell off has hit Thorney’s portfolio, but said his commitment to the companies he invests in only changed if Thorney had a fundamental change of view on the outlook of a portfolio company.
He said he remained confident he could continue to deliver growth and was working hard to achieve this.
“There are always good opportunities during times when fear and uncertainty are prevalent in share markets. TOP has the cash reserves and investment expertise to take full advantage of them and will have no hesitation in doing so,” he said.
Waislitz admitted that how fast the virus spread and strangled the global economy was surprising. He remarked,“previously, this would have been considered to be in the realm of science fiction”.
But said investors shouldn’t just to do whatever professional or programmatic traders did.
“Now is not a time for aggressive selling or aggressive buying on dips. It is a time for investment discipline and extreme vigilance,” he said.
“While it is impossible for anyone to be definitive about how this crisis will eventually play out, my experience over more than 30 years of being active in financial markets tells me that no matter what the short-term outlook, this too shall pass.”
Waislitz said the crisis did point to one good thing — the world’s ability to work together to address a crisis by central banks and the medical response.
But he called on the Morrison government to do its part and implement stimulus.
“I believe strongly they should take advantage of historically low interest rates and borrow significant amounts to fund a range of multi-billion-dollar infrastructure projects in water, energy, road, rail, air and elsewhere to help secure Australia’s long-term prosperity,” Waislitz said.
“To secure a robust and sustainable future, now is the time for strong, decisive action.”