While some investors see current choppiness as throwing out short-term trading opportunities like confetti, Kemp is taking a longer-term view.
“We see this current sell-off as an opportunity to look for bargains where the short-term asset price has changed but the long-term value has not,” he said.
“It is a bit of a fool’s game to have a view on what the next move in markets will be – investors should focus on long-term intrinsic asset value. While buying assets in the midst of all this can lead to some short-term pain, if you are happy with the estimated long-term value then this is an opportunity to either add to things that look cheap or sell expensive assets.
Though Kemp is eyeing select opportunities, he explained that there are certain factors which necessitate a cautious approach.
“A challenge that we are very cognisant of is the impact that markets can have on the real economy, as we saw in 2000 and 2008,” he expanded. “It can create a feedback loop that not only leads to a decline in prices, but also to a decline in fair value.
“As the shake-out continues we will have a better idea of the impact on the real economy and whether we can start buying more aggressively. But the key message for investors is not to pay attention to what happens in the next few hours or weeks, because it is likely to result in them getting whipsawed.”
