Bitcoin, gold, private equity and central banks reversing decades of cheap money are ripping up the rule book and there are plenty of ways to profit.
Hershan’s view will be unpopular among investors who sheltered from 2022’s crash by owning miners, which benefited from commodity prices boosted by inflation.
In general, ASX-listed businesses can perform well irrespective of shifts in geopolitics, but eventually the changes flow through to profits and valuations. By contrast, electric vehicle maker Tesla has invested in a Shanghai gigafactory and relies on China’s fast-growing economy for much of its sales growth.Still, Tesla stock’s $US550 billion valuation collapse over the 12 months to December marked the end of the meme stock era.
In public markets, healthcare stocks fared better than sectors like technology in 2022 thanks to their defensive earning streams and demographic tailwinds. Smith suggests private equity investors have advantages in the space. Yarra Capital’s Hershan says the washout from central banks rewriting the rule book means investors must still be selective in deciding whether a stock that has crashed 70 per cent is good value.