Portfolio managers must become "experts" in the progression of the ongoing coronavirus pandemic, tracking its spread as well as global responses to it, if they are to manage money successfully through this crisis, according to Fidelity's Anthony Bolton.
The veteran investor, who has seen numerous crises since starting his investment career in 1979, offered tips and insighst to investors in a call hosted by Fidelity on Thursday (23 April).
Bolton, who previously managed Fidelity Special Situations and now has a board position with the firm, returned to personal investing earlier this month amid the "opportunities" arising from the pandemic.
He advised those on Thursday's call to "become, as much as they can, experts about the pandemic; about its progress across the world, about drug developments, about… lockdown measures… [and] how we come out of lockdowns".
Bolton explained that "no one has an advantage over anyone else" during this crisis and all investors "must start from scratch" in learning about the current environment.
He said: "It is a great time for active management because you really have to do the work - you have to look at it company by company, you need to talk to the management, find out how they are reacting to the pandemic and what they are doing to alleviate some of the worst effects of it.
"Active managers are going to be well placed."
Bolton added that investors then "need to go back to first principles", whereby projections are made about company outlooks with a focus on balance sheets and an eye to targeting well-financed firms.
"When I talk to some of our portfolio managers, they have said ‘it is so difficult, everything is down. How do I pick which are the most attractive ones?" Bolton said.
"You have to look in terms of their resilience to what is going on around them."
Bolton also noted the importance of targeting companies with management teams that are "flexible and pragmatic", singling out Chinese and emerging markets company management teams as having more experience of making decisions in fast moving environments.
In addition, Bolton made reference to the unprecedented spending of governments around the world in efforts to sure up their economies as an indicator of a company's trajectory.
He said: "A number of companies will go fast in this environment, but the majority will not because the government will stay behind them, particularly if they have any element of doing something that's strategic or really important to the economy longer term."