Paul Meeks is reworking his investment strategy due to coronavirus risks.
“They do require to get a lot of swipe fees, a lot of face-to-face transactions in places like hotels, bars and restaurants and I just don’t see that happening,” the portfolio manager at Independent Solutions Wealth Management told CNBC’s “Trading Nation” on Friday.
His decision came before first quarter earnings season for tech gets into full gear.
Meeks, who’s known for running the world’s largest tech fund during the dot-com boom and subsequent collapse, also noted the two credit card giants were getting too pricey before the coronavirus pandemic even emerged.
Mastercard stock was up 58% in 2019 while Visa rallied 42%. So far this year, they’re both down just over 10%.
“A lot of people don’t realize that in most tech indexes, in which active managers like myself compare ourselves, Mastercard and Visa are very large stakes,” he said. “I’d rather exit until things get better, and put our money in something that’s going to do better during the coronavirus and after the coronavirus.”
Meeks has been bearish on tech overall for more than year. However, he does see a couple of pockets of opportunities.
“They’re speeding the internet. They’re boosting internet security. Two very good themes,” added Meeks.
He also likes Taiwan Semiconductor as a long-term play and as a core tech holding. He believes the chip manufacturer is well positioned in a competitive environment. Plus, Meeks notes it pays a solid dividend compared to its peers.
Meeks doesn’t see too many opportunities beyond those names. In late February, he warned on “Trading Nation” the coronavirus could spark a bear market in technology.
Since then, he hasn’t seen any material improvements.
“I need to feel better about the consensus being realistic about when our economy in the United States gets back to full strength. I don’t believe we’re in a V-shaped recovery,” Meeks said. “Unfortunately, I think this big [market] rally that we’ve had since March 23 is based on believers in the V-shaped recovery. I need them to be more realistic, and then I’ll be more realistic about adding money to portfolios.”
Disclosures: Paul Meeks owns shares of Amazon, Akamai Technologies and Taiwan Semiconductor.
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