In an exclusive interview with Forbes Australia, Platinum Asset Management co-founder, co-chief investment officer and CEO Andrew Clifford reveals his thoughts on this year’s investment landscape.
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Andrew Clifford has made his name as one of Australia’s premier fund managers – co-founder, co-chief investment officer and CEO of Platinum Asset Management which has around $18 billion of assets under management. Forbes Australia managing editor Stewart Hawkins spoke to him in Sydney, where he offered his insights on the opportunities and pitfalls of investing in 2023.
In this rapidly changing world, what are the new fundamentals? What’s concerning you in 2023?
The obvious thing that’s changed is interest rates. And I think that for 20, even 30 years, we’ve been in an environment of falling rates, and that has been this huge tailwind for investors, ever-increasing valuations. I just think this is over. I suspect they’ll peak earlier than we are talking about. But the real question is, where do they then go after that? So, I think it will be harder work in all asset classes to make money from here on.
What are you actively avoiding?
We’ve just had one of the great speculative bull markets in financial history. There have been many of them, but it was a pretty good one, particularly in the high-growth and tech stocks. The whole range of high-growth areas… got bid up very highly. After that, you’ve got to be really careful about returning to yesterday’s heroes.
Obviously, many of them have fallen very hard, and some are down 85, 90%, but some of the bigger, more well-known names, your so-called FANGS, are down less than that. But two things happened here, which was very much the case in 2000 and 2001 in that tech wreck because people will look back and say, “Oh, that was the great opportunity to buy Amazon.” Like, “Yes, it was.”
But I can assure you it was not a great opportunity to buy [some others]. You’re going to have, I think, two patterns here with the stocks that have been much loved. A huge number of them will turn out to have been sort of false stories, business models that aren’t going to work, and running endless losses to build a software business is not always going to work out for you. I think then there’s the other group where there are genuinely interesting businesses that have been built.
Still, what psychology tells you, investor psychology tells you, is that we’re all going to be very reluctant to let go of that great story about whatever it is… and the stories are inevitably never as good as the excitement at the very top.