TOL - 13th Apr, 2024
Why Ben Clark is taking profits on growth stocks (and where he's putting that money to work)
TMS Capital's Ben Clark talks artificial intelligence, growth investments and holy grail stocks.
Quality growth stocks, those with fortress balance sheets, impressive moats, structural tailwinds and top-notch management teams have had a stellar run recently - particularly those with exposure to the artificial intelligence trade.
Take Goodman Group (ASX: GMG) for example, which has risen 66% over the past year. Or Megaport (ASX: MP1), up over 252% in 12 months alone.
If you're like this anonymous writer, you've probably started to ponder whether it's time to trim some of your winning positions and take some profits.
And according to TMS Capital's Ben Clark, we may have just reached that point.
"A lot of investors are trying to chase a very small number of stocks in Australia because of the AI trade," he says.
"And I'd just be a bit wary about that because although those companies absolutely should benefit, it's just how quickly those benefits flow through and whether the market has just got a bit ahead of itself in terms of the benefits that will come through in the medium term."
That said, Clark has recently returned from a work trip to the US a changed man. Before the trip, he was a bit of an artificial intelligence sceptic but now believes that AI is the fourth technology supercycle - and probably the most significant at that.
"We're already interacting with AI on a day-to-day basis, as do companies, but it's going to scale and drive up rapidly. And I certainly came back feeling like I had underestimated what that path looked like," he added.
In this episode of The Rules of Investing, Clark sits down with Livewire's Ally Selby for a conversation on all things artificial intelligence, growth investing and holy grail stocks.
He shares where he is putting some of the firm's dry powder to work, a few reasons why investors should feel optimistic about the outlook for markets, and whether he would be buying the AI behemoths both globally and locally today despite their stellar runs over the last six months.
Plus, Clark shares why the tables may be turning once again for out-of-love growth darling CSL (ASX: CSL).
[As a side note, I really recommend you watch this video from 19:32 onwards for an in-depth explanation of the impact AI is already having and will continue to have on every aspect of our lives.]
Note: This episode was recorded on Tuesday 9 April 2024.
Other ways to listen:
Timecodes
- 0:00 - Intro
- 1:54 - Ben Clark's outlook for the remainder of 2024
- 4:17 - Record cash holdings in the US and what this means for markets
- 6:51 - Why Aussie investors are also holding a lot of cash
- 7:39 - The most common question Ben Clark is hearing from clients
- 10:01 - The takeaways from Ben's trip to SXSW in the US
- 12:13 - Learnings from a private meeting with a Google executive
- 15:11 - The outlook for Microsoft (NASDAQ: MSFT) and Google (NASDAQ: GOOGL)
- 16:25 - Can the momentum continue for global AI winners like Nvidia (NASDAQ: NVDA)
- 19:17 - The ASX-listed stocks that directly benefit from AI
- 23:17 - Why some of these stocks' share prices may have gotten ahead of themselves
- 24:30 - Holy grail stocks - and why Brickworks (ASX: BKW), WiseTech (ASX: WTC), REA Group (ASX: REA) and CSL (ASX: CSL) make the cut
- 29:32 - Where Ben Clark has started to take profits
- 31:28 - And where he is putting that cash to work
- 36:11 - One thing the market is getting wrong today
- 38:03 - Lessons for growth investors from the 2022 bear market
- 42:59 - A stock to buy and hold for the next five years
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The Rules of Investing is one of Australia's top investing podcasts. We interview the leading investment minds from Australia and overseas to better understand their processes and philosophy. After launching in October 2017, there have been over 150 episodes published - you can access all content on Livewire Markets, Spotify and Apple Podcasts.
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5 topics
9 stocks mentioned
2 contributors mentioned
Livewire Markets
The Rules of Investing is one of Australia's top investing podcasts. We interview the leading investment minds from Australia and overseas to better understand their processes and philosophy. After launching in October 2017, there have been over...
Livewire Markets
The Rules of Investing is one of Australia's top investing podcasts. We interview the leading investment minds from Australia and overseas to better understand their processes and philosophy. After launching in October 2017, there have been over...
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