Nobody knows when this picture of reality will change, but when the epidemic finally subsides, the situation in the markets can change very quickly. Hence, the current “strong measures” could be replaced by large infrastructure packages, Lars-Erik Lundgren believes.
So we are facing a new era, and the turning point is now. Therefore, we avoid growth stocks with fanciful valuations and instead choose cyclical companies that benefit when fiscal policy returns, he says in an interview published on Aktie Ansvar Sverige.
Sustainability and responsibility play an important role in Lars-Erik Lundgren’s management.
– In the case where two investment alternatives are equivalent, we must be rewarded with the activity of the more sustainable investment alternative, that is, with equivalent alternatives, we invest in the more sustainable alternative, he says in the interview where he also explains how he deals with the analysis of the company where each share is evaluated against the quality of the company Represented by the arrow.
The company analysis is then supplemented with a “broad external analysis where the business cycle, stock market climate and outlook are taken into consideration”.
Presently, Lars-Erik Lundgren is operating at ‘sector level’ and has an industry shortage. But it is compensated from a cyclical perspective by investing in basic and non-commodity commodities. The two examples that Lungren provide are Stora Insu And the Autolive. But in the industry, Aktie-Ansvar has chosen to weigh portfolios against arrears, such as Figs And the Asa Apploy, He says.
Admittedly, ABB is still a “restructuring case” according to Lars-Erik Lundgren, but the company is also backed toward electrification.
The banking sector benefits from higher interest rates
An example of Lundgren companies is, “Assa Abloy slipped into recovery” because the company’s service technicians were unable to meet clients during the pandemic. But as this situation is starting to diminish, Asa Apolluli must leave, he explains.
If we are right in our belief in inflation, the interest rate will rise, which will benefit the banks. Banking is one of the few sectors that is actually trading below the five-year average. We are cautiously gaining weight but ready to increase if our scenario is correct. For the same reason, we are underweight, Lars Eric Lundgren says in the interview.
He also believes that we are now beginning to see the end of “the awesome values with only PowerPoint presentation as a basis”.
– The return of the fiscal policy means a new era. The demand for real products and services will increase, which will lead to higher inflation and interest rates. “I think the shift has happened now and the market will discover it in the spring,” says Lars Eric Lundgren.