We are now in November and rounding out a year that many of us probably wished was over a lot sooner. 2020 has proven to be a year like no other in modern history, not least due to the coronavirus pandemic. And that uniqueness extends to the world of investing. 2020 has been a year of massive volatility on share markets around the world.
Here on the ASX, 2020 has seen the S&P/ASX 200 Index (ASX: XJO) command 7,162 points, 4,546 points and 6,385 points at various times throughout the year (the latter is the level at the time of writing). So now as 2020 soon draws to a close, I'm sure there are many investors out there wondering what wonders 2021 has in store for us.
Well, one top global fund manager is very bullish on 2021, so much so that he recommends investors go 'all in'.
That investor is Bill Ackman. According to reporting in the Australian Financial Review (AFR), Ackman is a disciple of Warren Buffett and one of the most successful fund managers in the US over the past few decades. He runs Pershing Square, a hedge fund that has done extremely well in 2020. That was partly due to a credit swap trade, which reportedly banked Pershing US$2.6 billion.
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Ackman: why investors should 'go long' in 2021
So why is Ackman so bullish on 2021? Well, according to the AFR, it's for a few reasons:
You've got low rates, you've got likely stimulus, you could see infrastructure spending, you've got still very well capitalised banks, you've got access to capital. So I think 2021 could be a very, very good year in markets, so go long I would say… the economy is on track for a very, very good recovery.
Ackman is also pleased with the outcome of last week's US elections. That saw Democrat Joe Biden elected the next US president, as well as both parties maintaining divided control of Congress: "You've got a more moderate Democrat in the White House, you have the kind of far left of the party that's been neutered a bit by the results of the election", the fund manager stated.
In terms of stocks that Ackman is finding interesting right now, he is focusing on the restaurant and hospitality sectors. That includes stocks like Chipotle Mexican Grill Inc (NYSE: CMG), Starbucks Corporation (NASDAQ: SBUX) and Hilton Hotels Corporation (NYSE: HLT).
It's probably the single greatest time in history to open a restaurant because rents are going to be low and demand is going to be high and the supply of competition is going to be low… (A franchising restaurant) doesn't have to spend capital to open stores because that's done by entrepreneurs. And Hilton's the same.
As for Starbucks, Ackman tells the AFR that "China was a tea-drinking country until Starbucks showed up".
