4 crowded trades to avoid in 2022: Munro Partners

January 10, 2022

Munro Partners CIO Nick Griffin joined a group of fund managers sharing their views with Livewire Markets. In this episode, a focus on crowded trades to avoid.

For two of our fundies, it was concept stocks or profitless growth stocks that were looking overheated for the year ahead. After all, several of these stocks have captured the public’s (and media’s) attention over the past few years thanks to over-subscribed IPOs, sky-high valuations, and a peculiar lack of product (as yet).

“A lot of them are great ideas or great products, and we want to be a bit more patient and see whether we can get them at the right valuation,” Nick Griffin of Munro Partners said.”That’s just a trend we’ve noticed in the last couple of years, and it’s a trend that we’re not going to buy into in 2022.”

Griffin points to the electric car market as a clear example of this overvalued crowded trade.

Rivian is a great product. We like the car as well. The grill’s really exciting. It’s probably not worth US$100 billion-plus at the moment, quite frankly. And Lucid’s the same,” he said.

“We get it, the social trading revolution, or the retail revolution – these people find great products, and I think that’s fantastic and that’s what they should be doing. They now just need to marry finding a great product with some fundamental analysis, and you’ll get a great investment.”

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