Where to find the 'picks and shovels' of the AI goldrush
Trevor Gurwich, portfolio manager at the $US213 billion American Century investments, thinks artificial intelligence is about to set off a wave of booms and busts.
Trevor Gurwich is a vice president and senior portfolio manager at American Century Investments, a private investment manager with USD213 billion ($329 billion) under management.
Where’s your investment focus?
I've been covering small caps at American Century since about 1999.
With small caps there are a lot of inefficiencies, fewer analysts covering the space, less coverage, and greater discrepancy in their estimates. Within that context, if you understand these businesses, you can spot a lot of opportunities and deliver a lot of value for investors.
What’s the outlook for the small caps market?
We're in a very interesting period right now. The market is fighting interest rates and inflation, there are serious geopolitical tensions, and we’re still recovering from COVID. With that background, I think the outlook is extremely attractive because you are seeing small caps that are growing much faster than large caps. You’re also seeing small caps that are valued at a significant discount to both small caps in the past, but also relative to large cap names today.
When we take a look at the behaviour of the small cap universe, you see that during recessions or geopolitical events, or macro dislocations, they generally have much bigger selloffs and when they rebound, they typically rebound at much, much faster rates,
