Trends Watch: TMT Investing

EisnerAmper’s Trends Watch is a weekly entry to our Alternative Investments Intelligence blog, featuring the views and insights of executives from alternative investment firms. If you’re interested in being featured, please contact Elana Margulies-Snyderman.  

This week, Elana talks with Guotao Lu, Founder, Greiphyn Heights Asset Management LP.

What is your outlook for TMT?

It is an interesting time. On one hand, despite the correction since late last year, we do believe there is still room for the shares to fall further. On the other hand, the shares of some companies have priced in situations that we see enough of a margin of safety. As such, we are being patient on overall exposure but are actively looking for opportunities. 

What are the greatest opportunities you see and why?

In terms of sectors, we see some payment-related names being mispriced right now, it is one of the areas where perhaps the market mispriced cyclicality versus the secular trend. In terms of geography, we see that the fundamentals of Chinese ADRs turning, and we are looking for opportunities there as well.

What are the greatest challenges you face and why?

On one hand, the investment managers stick to their own investment process regardless of the market environment. On the other hand, the managers take a pragmatic approach, checking and studying what worked and what did not work under different market environments, as well as improving their own investment processes and decision making based on such learning.

What keeps you up at night?

A mild recession is our base case, should the inflation stay high (10%ish) for longer than one year. If the Fed goes Volker's way to fight it, there is likely to be a deeper recession (for the world) and for the entire equity market.

The views and opinions expressed above are of the interviewee only and do not/are not intended to reflect the views of EisnerAmper.