Mining companies have traditionally traded at a discount to industrials due to the limited life of their assets. Amit Lodha, Portfolio Manager at the Fidelity International Global Equities Fund, likens it to valuing a melting ice cube – here today, but gone tomorrow. Years ago, healthcare companies used to attract large premiums due to the excess cashflows they produced, but once their patents expire, they too become like melting ice cubes.
Today, technology firms are likewise attracting large premiums based on forecasts of growth in perpetuity. But could the tech leaders of today be the AOLs and the Yahoos of tomorrow?
Watch the video below to hear Lodha’s take on disruption in the technology industry.
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Absolutely agree which is why no equities are "set and forget" active management is essential