Andrew Mitchell: These moments have proven to be the best time to invest

If you’ve been finding it hard to wrap your head around the moving parts in markets and geopolitics lately, I can assure you that you’re not alone.

The list of developments is long and growing: inflation is bubbling away, and outside of a few mega-cap stocks, AI seems to be throwing up more questions than answers (isn’t it meant to do the opposite?). Meanwhile, the deeply unsettling war in Iran continues to send ripples through the global economy.

No doubt the average investor (myself included) is struggling to make sense of it all. There is, perhaps, some reassurance to be found in the admission from Andrew Mitchell, founder and senior portfolio manager at Ophir Asset Management, that now is not the time for bold, aggressive moves.

“We are moving through a stage where the speed of change is constant," Mitchell says. "At this point, we’re really just trying to stay in line with the market because there are so many 'unknown unknowns.' Geopolitical factors, like what side of the bed a world leader wakes up on, could shift the market onto a completely different trajectory overnight.”

Ophir has earned a reputation as one of Australia’s premier small and mid-cap growth investors. Both the Ophir Opportunities Fund and the Ophir Global Opportunities Fund are currently ranked #1 in their categories across most timeframes, according to Morningstar data.

With performance for the Ophir Opportunities Fund sitting at 22.2% p.a since inception, it would be easy to assume the strategy relies heavily on big bets and swinging for the fences. But Mitchell says at times like these, it pays to know your own shortcomings.

“I’m smart enough to realise what I don’t know. As a business, Ophir doesn't sit there and say, 'the market is wrong.'”

But you don’t generate long-term growth by sitting on the sidelines. As part of Livewire’s Growth Series for 2026, I spoke with Mitchell to find out how he is navigating this tricky period, the risk of "crowding" as investors seek safe havens, and two companies he believes are largely immune to the gyrations in global markets.

This doesn’t happen very often

On the surface, equity markets have taken the stream of negative news in their stride. The S&P 500 recently broke new all-time highs, and the NASDAQ clocked up a 13-day winning streak, the index's longest run of daily gains since January 1992. Even the humble ASX 200 is back in the green for 2026 and up 14.5% on a 12-month basis.

However, the real damage has been done beneath the surface in industries such as technology and healthcare, with the Small Ordinaries feeling the brunt of the volatility. The small cap index fell 19% in the space of two months from its recent peak in late January, only just avoiding bear market levels.

To provide some context, Ophir recently published research highlighting the extreme de-rating of small caps relative to larger companies.

“Over the last 20 years, Aussie small caps have traded at an average P/E premium to large caps of +0.7x. Today they are trading almost 4 P/E points lower, the lowest in the 20 years of data available.”

Part of this story involves investors fleeing small and mid-cap companies, driven largely by the rapid about-face in interest rate policy. RBA expectations have swung violently from easing to tightening in record time. Mitchell acknowledges the impact of rates but notes that it also represents a rare window of opportunity.

“Rates drive everything. Last year, we expected rate cuts; now, the market is pricing in roughly two and a half rate increases over the next 12 months. This shift has 'smashed' the multiples of consumer discretionary stocks. However, we think this 'uncomfortable' period is actually a good time to start 'nibbling away' at high-quality discretionary names.”

Mitchell also raises an interesting point regarding the outlook of the current tightening cycle. While interest rate markets are pricing in further hikes, Mitchell highlights the potential drag inflation could have on demand.

“We are seeing two opposite forces: inflation in items such as fuel is up, versus demand destruction caused by those higher costs. That demand destruction can act like a rate hike itself, which might eventually lead to a rate-cutting environment in the future.”

What we do know is that interest-rate-sensitive stocks will move well ahead of any official decisions. Money has flowed out of tech and rate-sensitive sectors into perceived "safe" stocks. Mitchell warns that this move creates its own risk, as multiples on a finite number of stocks get pushed higher by crowded trades.

“If the market sentiment shifts toward a broader 'melt-up' scenario, these crowded industries often become the 'funders,' meaning people sell them to buy into sectors that will perform better in a broader rally.”

Two stocks for the "Unknown Unknowns"

When it comes to picking equities in this climate, Mitchell’s focus remains on earnings, specifically finding companies unlikely to be derailed by geopolitical conflict or AI disruption. In the current portfolio, Codan (ASX: CDA) and Superloop (ASX: SLC) stand out as resilient outliers.

Codan - Drones and Dust: Codan is a fascinating "two-headed" business. On one side, they provide communication systems for drones, a sector seeing unprecedented demand as global militaries pivot toward low-cost aerial tech. On the other side, they remain the world leader in gold detectors.

“They’ve got a whole new suite of gold detectors... our channel checks show this is an absolute game-changer,” Mitchell says. With gold prices soaring, these detectors are high-productivity investments for miners in regions like Africa, often paying for themselves quickly.

Superloop - The Challenger Advantage: Superloop, alongside Aussie Broadband, is currently capitalising on the "great migration" away from the big three: Telstra, Optus, Vodafone and TPG. Despite the incumbents' attempts to shore up their defences, the market share bleed hasn't stopped.

Superloop’s strategic partnership with Origin Energy has become a massive tailwind, plugging them into a steady stream of new customers. "The amount of people who are joining them versus the market share they currently have is significantly higher," Mitchell notes. It’s a classic "defensive growth" setup: essential service demand paired with a superior challenger model.

The "Comfort" Trap

If you’ve spent any time learning from professional investors, there is one signal that almost everyone agrees is worth paying attention to: insider buying.

When a share price gets hit, there is nothing investors love seeing more than management stepping in to buy. It makes perfect sense; insiders are uniquely positioned to evaluate a business's true outlook. Mitchell takes this principle to heart; his conviction doesn't just come from research, but from his own capital.

“This is normal in markets, and I’m always investing in our funds,” Mitchell reflects. “The best investments I’ve ever made have been at the most uncomfortable times. When I look at where we've made the most money, it was during the periods that felt the most difficult.”

He warns against pivoting into "hype" sectors or energy stocks that have spiked solely on the back of conflict - these trades can reverse instantly if tensions ease. Instead, Mitchell argues that because we are moving into the stages of conflict where markets typically begin to recover, the real risk is being on the sidelines.

“Just stay invested and realize that this war will likely end,” Mitchell concludes. 

“We're past stage one, we're in stage two and stage three where the share market typically rallies from a conflict. Just don't sell at the worst possible time.”

*If you would like to sign up to the monthly Ophir newsletter to see what stocks they are buying and selling, and their views on markets, sign up here