Quality growth stocks, those with fortress balance sheets, impressive moats, structural tailwinds and top-notch management teams, have had a stellar run recently. 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."
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).
Note: This episode was recorded on Tuesday 9 April 2024.
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
