“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.”
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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.”
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