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Friday, May 20, 2022

Setting, Not Following, the Trend: How Morgan Stanley’s Dennis Lynch Continues to Pick Top Stocks – Boss Magazine

Reading Time: 4 Minute

Stocks often live and die by trends. While many fund managers chase trends, others prefer to forge their own path – reaping tremendous dividends in the process.

This is the story of Morgan Stanley’s Dennis Lynch, who continues to be a trend-setter on Wall Street. Rather than following the traditional market, Lynch invests in disruptors and takes a unique approach to stock picking.

As the Wall Street Journal Winners’ Circle stock picker for 2020, Dennis Lynch has proved that an unconventional approach to investing isn’t a bad thing. With a 273% return on his fund, Dennis Lynch’s unique (and controversial) approach sets trends rather than follows them.

Learn why Dennis Lynch is against big-name stocks like Tesla, and why he’s still betting his money on Zoom and the future of cryptocurrencies.

About Dennis P. Lynch, Jr. (Marshal)

Also known as Marshall Lynch, Dennis Lynch serves as the head of Morgan Stanley Counterpoint Global. He worked as a sell-side analyst at JPMorgan Securities before joining Morgan Stanley in 1998 as head of small and mid-cap growth investing.

Today, he oversees a net worth of $130 billion. Many of Dennis Lynch’s portfolios are outperforming, with 142% – 150% returns in 2020 alone. The Wall Street Journal listed him as one of the best stock-pickers in America and was also named Morningstar Fund Manager of the Year.

Dennis Lynch grew up in Rumson, NJ. He earned a Bachelor of Arts in Government from Hamilton College and a Master of Business Administration in Finance from Columbia University Business School.

Dennis Lynch: The disruptive investing that sets the trend

Although Lynch isn’t married to any particular industry, he looks for disruptors in technology, healthcare, or digital. But he has no interest in the hype behind big-name stocks like Tesla; If anything, Dennis Lynch’s stock-picking approach seeks long-term growth that transcends (and sets) trends.

According to Lynch, these three ingredients make up his unique approach to identifying disruptions.

1. Bitcoin as Future-Proofing

While many fund managers are concerned about investing in cryptocurrency, Dennis Lynch is a fan. Cause? Pure paranoia.

We’ve seen so much turmoil in the last two years that they’re not sure whether the dollar will be the backbone of our economy in 10 years. In this uncertain time, we cannot say Not there There is a possibility, and this is why Lynch has a small, speculative interest in bitcoin and Square SQ.

Crypto seemed like a passing fad at first, but it is a trend that remains. In Lynch’s opinion, diversification is one of the best ways to diversify a portfolio while protecting against disruption. While other investments plummet in response to the chaos, bitcoin thrives because of its antifragile properties.

Dennis Lynch may not be investing all his money on cryptocurrencies, but it is an interesting addition to his portfolio. He advises fund managers to choose their investments wisely. “You can bet small and still win big,” he explains.

However, downsides can happen with cryptocurrencies like bitcoin. Because the pandemic caused interest rates to drop, many investors bid on investments such as bitcoin. Dennis Lynch believes that crypto is an asset class whose value could be very, very soon. This means investors may not get dramatic returns in the long run, but time will tell.

2. Zoom and Remote Work Boom

Dennis Lynch invested in Zoom during its IPO in April of 2019. This could not have been a wise decision given the global pandemic that occurred a year later.

Lynch’s team predicted that remote working would become more widely accepted—of course, they couldn’t predict how. Immediately It will be adopted, thanks in large part to COVID-19. “We didn’t expect there would be a pandemic and mass adoption would pick up with momentum,” Lynch explains.

Lynch’s Zoom stock jumped 350% in two years because of the pandemic. In his opinion, Zoom will still be a market leader in the next 10 years. None of its competitors have been as widely adopted, and they aren’t doing as well. “For me personally, every time I have to use Google Meet or Microsoft Teams, I want to shoot myself because I think it’s really crappy,” jokes Lynch.

Although other investors are exploring alternatives to Zoom, Dennis Lynch is happy with Zoom’s future. He predicts that it will eventually turn into a larger software suite of solutions, which will make it more resistant to disruption.

3. Tesla: Too Good To Be True

Dennis Lynch is fully involved in crypto and Zoom, but he does not believe in investing based on hype or short-term fads. So he finally decided to remove Tesla from his portfolio.

Lynch owned his stock in Tesla in its early days, holding it for three years before eventually selling it for a decent return. But having been a Tesla investor himself, Dennis Lynch thinks the infamous company isn’t worth the risk.

In Lynch’s view, Tesla is too good to be true because:

  • EVs are a tough market: Even though Tesla is an innovator, it is a market that sells high-dollar goods to consumers, and that comes with a lot of unknowns.
  • Elon Musk is a wild card: Lynch appreciates Musk’s innovation, but he’s certainly controversial.
  • The company needs a lot of capital: Innovation requires money, and Tesla needs a lot of it. As a fund manager, Tesla’s constant need for cash didn’t matter to Dennis Lynch.
  • There is no clear market leaderTesla isn’t the only company making EVs. There’s no clear leader right now, but Tesla is competing with auto-makers with long track records.

Overall, Dennis Lynch cautioned that Tesla might not deliver on all of its promises. Lynch admires the company’s innovation, but it’s flying too close to the sun to accompany him for the ride.

Picking Top Stocks for 2022 and Beyond

Even the current stock pickers are facing difficulty in the current market. The pandemic is far from over, and we have already seen how volatile the markets can become as we explore the “new normal”.

That’s why it’s so important to forge your own path to move forward. While he has unconventional views on bitcoin and Tesla, Dennis Lynch believes that consistent trends, long-term holdings and pandemic market investments will still reign supreme.

World Nation News Deskhttps://www.worldnationnews.com
World Nation News is a digital news portal website. Which provides important and latest breaking news updates to our audience in an effective and efficient ways, like world’s top stories, entertainment, sports, technology and much more news.
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