Michael Frazis, Founder and Portfolio Manager at Frazis Capital Partners, is positive about the outlook for equities. Despite the obvious challenges the world faces, a combination of monetary and fiscal stimulus, and economies that are beginning open back up, should present a perfect setup for growth equities. But that doesn’t mean investors can be blasé about what they buy. He warns that in some popular sectors, prices have gotten too high in some names.

“Even in the hottest parts of the market, where there’s companies trading on 25-35 times sales or more, there are companies trading on a tenth of that. I think it’s extraordinarily important now to dodge some of those companies.”

In this episode of The Rules of Investing podcast, we discuss why he's so bullish right now, some new additions to his portfolio over the last two months, and why he was buying Afterpay as the stock fell in March.

Timestamps

  • 2:57 - Michael's background and how it shaped his investing strategy
  • 5:05 - Why he's bullish and why rising interest rates are a risk
  • 8:53 - Will the bifurcation of growth and value stocks continue, or even accelerate?
  • 14:46 - Reconciling companies that consumers love but investors hate
  • 20:12 - Something 'strange' happened that caused Michael to buy Afterpay, why it's one of the most impressive businesses around, and what Tencent may be thinking of doing with it
  • 25:52 - What he sold, mistakes made and additions to the portfolio
  • 29:59 - Why the market is mispricing Disney (NYS:DIS)
  • 34:30 - Why Tesla (NAS:TSLA) reminds Michael of Apple (NAS:AAPL)
  • 37:25 - Michael responds to our three favourite questions
Books discussed:

Stocks discussed:

  • Afterpay (ASX:APT)
  • Alteryx (NYSE:AYX)
  • Progyny (NSDQ: PGNY)
  • Catasys (NSDQ: CATS)
  • Livongo Health (NSDQ: LVGO)
  • Disney (NYS:DIS)
  • Tesla (NAS:TSLA)
  • Apple (NAS:AAPL)

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Marvin Cathey

Thanks Patrick great interview as always but especially interesting to hear from a younger fund manager and how he values these tech growth companies. I always gain investing knowledge from your interviews.

Patrick Poke

Patrick - Mike and I actually did discuss electric scooters. But it was not really from an investment angle, so it seemed off topic and I left it on the cutting room floor. I also had an extensive conversation with Campbell Neal from K2 after our podcast recording about the wonders of electric scooters. I think some of the fundies are starting to pay attention.

Michael Frazis

Patrick, I can't believe you cut the impromptu review of my Fonzarelli scooter!

Patrick Poke

Sorry Mike, I regret it now! haha