Will Danoff: buy firms that are doing well right now
Forget future earnings, says Will Danoff, portfolio manager at Fidelity. What matters is now.
“I always prefer to invest in companies that are doing well right now,“ says Will Danoff, who manages the $139bn Fidelity Contrafund in the US, the largest active equity fund run by a single person. That’s why his portfolio is heavy in stocks that benefit from a world in which people work and study from home, he tells Bloomberg, rather than contrarian bets such as airlines and hotels that are only likely to recover when the pandemic is over.
Danoff’s biggest holdings are tech giants such as Amazon, Facebook and Microsoft. Many of these shares have already risen much further than anybody would have expected when Covid-19 first struck. “But if you say ‘would I rather own [a stock like Amazon] for the next ten years or not?’, I think it’s clearly a long-term buy.”
The outlook for markets is unpredictable. “Stock valuations are a function of low interest rates right now, and low interest rates have created some distortions.” High valuations may persist, but that’s not certain – so investors need to be sure they are confident in the long-term earning power of their stocks. “There’s no question that software companies are fast-growing, very high margin and most importantly are capital light – they don’t need to spend a lot of money to grow.”
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
That focus on profitability and low capital intensity drove Danoff to sell most of his stake in Tesla in 2017 – a decision that he now regrets. “Selling Tesla was a mistake … ten years from now, it’s very possible that virtually all new cars will be electric vehicles or hybrids and Tesla has the best brand.”
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
MoneyWeek is written by a team of experienced and award-winning journalists, plus expert columnists. As well as daily digital news and features, MoneyWeek also publishes a weekly magazine, covering investing and personal finance. From share tips, pensions, gold to practical investment tips - we provide a round-up to help you make money and keep it.
-
Which platforms will offer crypto ETNs?
Crypto ETNs will soon once again be available to UK investors. We reveal the investment platforms planning to offer them to customers.
-
Healthcare stocks look cheap, but tread carefully
Shares in healthcare companies could get a shot in the arm if uncertainty over policy in the US wanes, but are they worth the risk?
-
Healthcare stocks look cheap, but tread carefully
Shares in healthcare companies could get a shot in the arm if uncertainty over policy in the US wanes, but are they worth the risk?
-
The Palace of Westminster is falling down
The Palace of Westminster is in need of repair, but the bill is prohibitive, says Simon Wilson
-
'It’s time to buy British equities'
Opinion There is no better place to start investing in UK equities than with two of MoneyWeek’s favourite investment trusts, says Max King
-
Sotheby’s fishes for art collectors – will it succeed?
Sotheby’s is seeking to restore confidence in the market after landing Leonard Lauder's art collection, including Gustav Klimt's Portrait of Elisabeth Lederer
-
How to cash in on overlooked British bargains offering both income and growth
Opinion Sue Noffke, manager of the Schroder Income Growth Fund, selects three UK stocks where she’d put her money
-
Beazley: a compelling specialist insurer
The insurer Beazley is unusually profitable at present, and that looks set to continue. The stock is also a valuable portfolio diversifier, says Jamie Ward
-
The problem with renewables trusts
The value of assets owned by renewables trusts is far more volatile than investors expected
-
To hedge or not to hedge, that is the question
The mechanics of hedging are very logical, but deciding when to add a hedge is rarely a simple decision