1 00:00:00,040 --> 00:00:02,280 Speaker 1: And now, of course Iran has been extremely topical, so 2 00:00:02,279 --> 00:00:04,320 Speaker 1: we thought we'd get Sam Dicky of Fisher Funds on 3 00:00:04,360 --> 00:00:07,400 Speaker 1: talk us through what he thinks of this high Sam, hey, yea, 4 00:00:07,480 --> 00:00:09,559 Speaker 1: there has a going very well, thank you. So let's 5 00:00:09,560 --> 00:00:12,040 Speaker 1: talk about what investors should be thinking. What should they 6 00:00:12,080 --> 00:00:14,280 Speaker 1: do first when one of these events hits. 7 00:00:15,760 --> 00:00:20,439 Speaker 2: Yes, they these tragic human events, that's the first and 8 00:00:20,480 --> 00:00:22,720 Speaker 2: foremost thing, but secondly that they are kind of low 9 00:00:22,760 --> 00:00:26,480 Speaker 2: probability potentially high impact events, and you can't position your 10 00:00:26,480 --> 00:00:29,760 Speaker 2: long term portfolio around these events. Albeit they seem to 11 00:00:29,800 --> 00:00:32,400 Speaker 2: be higher probability these days because they're happening more and more, 12 00:00:32,440 --> 00:00:35,360 Speaker 2: but some foremost triard you risk. So have a really 13 00:00:35,360 --> 00:00:38,200 Speaker 2: good hard look at your portfolio. If this gets worse, 14 00:00:38,280 --> 00:00:40,680 Speaker 2: how am I exposed? So, for example, do I have 15 00:00:40,800 --> 00:00:44,440 Speaker 2: investments or trades on the lower conviction? Was I thinking 16 00:00:44,479 --> 00:00:47,760 Speaker 2: about selling them yesterday? Anyway before the war. But equally 17 00:00:48,000 --> 00:00:49,680 Speaker 2: you need to be ready to play offense as well. 18 00:00:49,840 --> 00:00:52,800 Speaker 2: So if your portfolio is well positioned, you know your 19 00:00:52,800 --> 00:00:57,480 Speaker 2: companies very well, that they're they've got strong balance sheets 20 00:00:57,680 --> 00:01:00,800 Speaker 2: and they've got long term thinkers at the helm. Was 21 00:01:00,800 --> 00:01:03,400 Speaker 2: there something you were thinking about buying yesterday before the 22 00:01:03,400 --> 00:01:05,320 Speaker 2: war started, and now you getting the opportunity to buy 23 00:01:05,360 --> 00:01:07,639 Speaker 2: that high quality company at a much better price. 24 00:01:08,720 --> 00:01:10,760 Speaker 1: What framework do investors actually. 25 00:01:10,480 --> 00:01:15,119 Speaker 2: Is Well, a famous US investors said, when it comes 26 00:01:15,120 --> 00:01:18,760 Speaker 2: to geopolitics, very few people really know anything at all. 27 00:01:19,120 --> 00:01:21,759 Speaker 2: I'm not sure where that apply it and plug applies 28 00:01:21,760 --> 00:01:23,400 Speaker 2: to the people who are actually waging the war. But 29 00:01:24,080 --> 00:01:26,640 Speaker 2: I think everyone thinks they're an expert, but really history 30 00:01:26,760 --> 00:01:29,679 Speaker 2: is the only decent guy we've got. But you want 31 00:01:29,720 --> 00:01:31,600 Speaker 2: to make sure you look at the right history lessons. 32 00:01:31,640 --> 00:01:35,440 Speaker 2: So you want to make sure the conflict has the 33 00:01:35,560 --> 00:01:38,800 Speaker 2: same or similar most obvious risks. So when we're thinking 34 00:01:38,840 --> 00:01:41,640 Speaker 2: about this one, we should look at historical Middle Eastern conflicts. 35 00:01:41,640 --> 00:01:44,120 Speaker 2: And if you look over the past forty years, have 36 00:01:44,200 --> 00:01:47,319 Speaker 2: been twenty one US air strike campaigns in the Middle 37 00:01:47,360 --> 00:01:50,200 Speaker 2: East and North Africa region, and eight weeks later, the 38 00:01:50,320 --> 00:01:52,800 Speaker 2: S and P five hundred was high in ninety five 39 00:01:52,800 --> 00:01:55,520 Speaker 2: percent of the time. So that's the first and simple framework. 40 00:01:56,520 --> 00:02:00,960 Speaker 2: But the most important thing after that is how is 41 00:02:01,000 --> 00:02:04,120 Speaker 2: that most obvious risk transmitted to the big drivers of 42 00:02:04,120 --> 00:02:06,520 Speaker 2: the game or the big drivers of market. So how 43 00:02:06,680 --> 00:02:09,600 Speaker 2: is a high oil price going to impact global economic growth? 44 00:02:09,639 --> 00:02:11,480 Speaker 2: How's it going to impact inflation, how's it going to 45 00:02:11,480 --> 00:02:14,360 Speaker 2: impact interest rates? And how's it going to impact corporate 46 00:02:14,360 --> 00:02:15,160 Speaker 2: earnings growth? 47 00:02:16,680 --> 00:02:19,480 Speaker 1: What about the second and third round effects and the 48 00:02:19,520 --> 00:02:22,040 Speaker 1: unintended consequences? How do the investors wait those? 49 00:02:23,080 --> 00:02:25,000 Speaker 2: Yeah, I think that's a really good question, and that's 50 00:02:25,000 --> 00:02:27,680 Speaker 2: where the market is today. So oil is obviously the 51 00:02:27,680 --> 00:02:29,840 Speaker 2: first round impact, and then you've got to think about 52 00:02:29,840 --> 00:02:32,360 Speaker 2: what sectors and countries are most sensitive to oil prices, 53 00:02:32,400 --> 00:02:35,080 Speaker 2: and Asia in particular, while it has gone a long 54 00:02:35,160 --> 00:02:40,960 Speaker 2: way to reducing its short bias to oil, I mean 55 00:02:40,960 --> 00:02:44,120 Speaker 2: they're their big net importers of oil, India in particular, 56 00:02:44,600 --> 00:02:47,400 Speaker 2: and China, they are still need importers, so they're very 57 00:02:47,440 --> 00:02:50,680 Speaker 2: sensitive to this. And the other thing is when you're 58 00:02:50,680 --> 00:02:52,600 Speaker 2: sitting at this is more simplistically, when you're sitting in 59 00:02:52,600 --> 00:02:54,400 Speaker 2: a boardroom and you're about to press the button on 60 00:02:54,400 --> 00:02:57,440 Speaker 2: a billion dollar capital spending program building a few factories, 61 00:02:57,840 --> 00:03:00,359 Speaker 2: and maybe you're a bit liing ball on it. Imagine 62 00:03:00,360 --> 00:03:02,840 Speaker 2: you perhaps wouldn't sign the check. So look look at 63 00:03:02,680 --> 00:03:06,760 Speaker 2: the real time indicators of confidence, both consumer and business. 64 00:03:06,800 --> 00:03:09,920 Speaker 2: And the final thing I'll say on this is going 65 00:03:10,000 --> 00:03:11,959 Speaker 2: back to when you look at your portfolio, and you 66 00:03:12,000 --> 00:03:15,560 Speaker 2: ask yourself how high conviction you are. I think crowded 67 00:03:15,600 --> 00:03:18,000 Speaker 2: trades and investor positioning are really important. And look at 68 00:03:18,000 --> 00:03:20,560 Speaker 2: the Korean stock market in the last couple of days. 69 00:03:21,000 --> 00:03:23,760 Speaker 2: That was an extremely crowded trade. It's driven by two stocks, 70 00:03:23,840 --> 00:03:25,960 Speaker 2: and maybe investors were not quite as convicted as they 71 00:03:26,000 --> 00:03:27,880 Speaker 2: thought they were in that fill twenty one percent in 72 00:03:27,919 --> 00:03:28,480 Speaker 2: two days. 73 00:03:29,040 --> 00:03:30,720 Speaker 1: Okay, what does this all mean for investors? 74 00:03:30,720 --> 00:03:35,120 Speaker 2: Then? I think, just again, make sure you really understand 75 00:03:35,160 --> 00:03:37,240 Speaker 2: your company, make sure you know what risk you've got on, 76 00:03:37,880 --> 00:03:40,640 Speaker 2: and stay a high quality, strongly positioned companies. And they're 77 00:03:40,640 --> 00:03:43,040 Speaker 2: a lot cheaper today than they were yesterday. That can 78 00:03:43,080 --> 00:03:45,680 Speaker 2: be a buying opportunity, but just make sure you've triaged 79 00:03:45,680 --> 00:03:46,920 Speaker 2: your risk first. Yeah. 80 00:03:46,920 --> 00:03:48,200 Speaker 1: Sam, It's always good to talk to you, and thanks 81 00:03:48,240 --> 00:03:50,040 Speaker 1: for your advice at Sam Dickey of Fisher Funds. 82 00:03:50,560 --> 00:03:53,760 Speaker 2: For more from Heather Duplessy Alan Drive, listen live to 83 00:03:53,840 --> 00:03:56,880 Speaker 2: news Talks. It'd be from four pm weekdays, or follow 84 00:03:56,920 --> 00:03:58,680 Speaker 2: the podcast on iHeartRadio.