Sam Dickie: Fisher Funds expert reveals how to make investments in a volatile world

It's been an interesting week for global markets - with figures dropping or rising at a rapid rate.

As Donald Trump's tariffs spark fear - or elation - among investors, questions have been raised over how we can make smart financial choices during a turbulent time.

Sam Dickie from Fisher Funds explains how people can make investments amid the chaos.

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Episode Transcript

Speaker 1 (00:00):
Bryant Bridge.

Speaker 2 (00:01):
That would of course involve you taking financial advice from
Donald Trump. Now we're going to get some from Sam
Dickey Fisher Funds, who's been watching this all day. Sam,
good evening, good evening rite. No advice, but some perspective. Perhaps, Yeah,
I should tenper myself.

Speaker 1 (00:15):
Sorry.

Speaker 2 (00:16):
Now we've obviously been a undated by the newsflow. How
do you keep track of it all and decide what's
important what's not?

Speaker 1 (00:24):
Yeah, whipsaw, you really do need frameworks and roadmaps. Otherwise
you are just drowning in headline bombs and you are
getting whip swords. So we think about three or four
broad framework so geopolitical, economic, equity, market and single stop frameworks.
So when we think about geopolitics, we keep it super
simple because we're not experts, but we bucket the players

(00:45):
into the retaliators. So that's Europe, Canada, Mexico, and then
the negotiators so importantly Japan and the Southeast Asia and
most other countries then of course China. So when you
think about the retaliators to the pores, I mean Europe,
it's probably a level playing field when it comes to
negotiating with the US, and I think Canada and Mexico

(01:07):
were critical crash test dummies, so the US dealt with
them in the week's leading up to Liberation Day, and positively,
there was no incremental or reciprocal tariffs on top of
the initial ones. I think the negotiators being led by
Japan is really reimportant in China. It's increasingly looking like
they will be the key focus of Trump's second term
like they were in his first. So clearly any movement

(01:28):
forwards or backwards with those three packets as key. On
the economic side, on growth, most economists think there'll be
a one percent hit the global growth. On inflation, we'll
see a second half spike of about one and a
half percent in US inflation. But critically, Ryan the market
is or was telling us about nine hours ago, that
the medium term growth drag from these crazy policies will

(01:51):
outweigh the short term inflation spike, and we know that
because the market had priced in another rate cut by
the Feed since Liberation Day. And then the final thing
on economics is the mitigant. So before we talk about
Trump's pain threshold, which we discovered overnight, the first mitigant
is easier monetary policy by the FED and the ECB

(02:11):
and the second one is easier fiscal policy. So in
the US we could get more tax cuts, we could
see doze backing off. And in Europe places like Germany
are ramping up infrastructure spending.

Speaker 2 (02:24):
So where two from here, I think we're too from here?
What is the endgame?

Speaker 1 (02:31):
Where does he blink? What's his pain threshold? So we
found that out last night, and I think he was
prepared to see more equity market paying And that's become
pretty clear. That's a sort of a self correcting mechanism.
It doesn't feed on itself, but the sort of self
reinforcing asset prices that do feed on themselves, like credit.
He did sort of score an own goal there. So

(02:53):
he saw spiking the spiking cost of corporate borrowing the US.
So that had been that's the spread you pay over
government bonds to borrow as a risky corporate and that
had been at sort of fifteen year lows a few
weeks ago, and as of sort of eighteen hours ago,
it had spiked to some of the worst level scenes

(03:13):
in twenty twenty two. So that has a direct transmission
mechanism to the average person on the street via borrowing rates.
And then we also saw him starting to lose control
of the government bond market about sort of sixteen hours ago,
and you saw sort of thirty year government bond yield spiking,
and that's quite scary. Some weere calling it his Liz

(03:35):
Trust moment. I think those two sort of self reinforcing
things caused them to pause. So the point here is,
I think if we see any further escalation in China
or him flip flopping on the pause with other countries,
that will be carefully checked against those the resultant moves
in the price of US credit, the price of US

(03:56):
government bond, and if they spike again, it seems you
will back down.

Speaker 2 (04:01):
Is it hard? I mean, is this more difficult to
predict than covid Donald Trump's mind? Because you're not really
you know, you're not really. It doesn't behave in a
rational way. Not nor did a virus mind you, But
it doesn't behave in a rational way. I mean, I
suppose it has, as you say, blink today we've we've
figured out the pain threshold. But it's very it must
be very hard to get to have irrational thoughts on it.

Speaker 1 (04:25):
Is I mean, it is sort of similar to COVID
in the early days, and we just didn't know how
serious this this virus was going to be and how
it was going to sort of morph from one virulent
strain to another. But it's quite apt, actually an apt
apt comparison, Ryan, But I think that that's I mean,
all these things are the same in the respect that

(04:46):
we don't know, and that's the point. They're hard to
precisely price or understand or even keep up with. That's
why if you don't want to drown on these headline bombs,
you have to have these sort of simple frameworks to
think about things. And the other thing is that you're
own portfolio, Ryan. You put it into four buckets. So
companies directly impacted by US tariffs, companies directly impacted by

(05:07):
retaliatory tariffs, and then how those companies are relatively positioned
within their sector, so that do they have a manufacturing advantage,
do they have pricing powers so they can pass on
any cost increases? And the final bucket is companies in
the way of a probable economic slowdown. So that's the
sort of four buckets you think about any investment you're making.
And as of twenty four hours ago, every bucket. So

(05:30):
the directly impacted, the indirectly impacted, and even the supposedly
not impacted hand be indiscriminately over sold. So that was
pretty good buying. But now we're in a more sort
of picky environment.

Speaker 2 (05:44):
Yeah, so what do we do now? I mean, have
we missed our opportunity to make a bunch of money?

Speaker 1 (05:52):
Look, when fear gets as elevated as it was sort
of again twenty four hours ago, you know, sentiment engages
a good barometer, and you know we were deeply in
fear to a dear territory. Some of the fair gauges
we track with the worse they've been in twenty five years.
I do think there's when there's blood on the streets,

(06:13):
there's opportunity around. That of course doesn't mean as a
long term investor that the opportunity's gone. It just means
you need to be a bit more picky. And I
do think, as always, companies with wide and widening economic
moats around their businesses, long growth runways run by high
quality people are a pretty good place to start.

Speaker 2 (06:29):
Sam, Appreciate your time, Sam Dickey Fisher funds

Speaker 1 (06:32):
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