Editor’s Note: Today in Smart Money Monday, Thompson Clark sits down with Mauldin Economics publisher Ed D’Agostino to discuss three of his top stock picks for 2022, how inflation could affect his Wealth Accelerator strategy, and how investors can better prepare for the year ahead.
Ed D’Agostino: You’re coming off an exciting year, Thompson. You joined Mauldin Economics, launched Smart Money Monday and High Conviction Investor, and introduced readers to your Wealth Accelerator strategy. Tell me, what can this strategy do for investors in the coming year?
Thompson Clark: Great question. The Wealth Accelerator strategy works in all types of markets—up, down, bull, and bear—because it hinges on allocating a small portion of your overall portfolio to fast-growing companies run by savvy owner-operators. And most critically, these stocks need to be underpriced, or I don’t bother.
Truth be told, I don’t spend much time predicting what the broader market will do next because we’re not buying the market or an index fund. We only buy individual companies.
Ed: Right, but market trends still affect individual stocks. I’m sure you don’t ignore them entirely.
Thompson: Of course not. For instance, high-growth stocks were valued at nose-bleed levels toward the end of last year. Now the market has cut some of those names down a bit.
Just look at a UiPath (PATH). It’s a major player in robotic process automation and one of my NoCode watchlist names. This is a good, possibly great company. But buying a great company when it’s overpriced is not a great recipe for profits.