Veteran fund manager goes shopping, buys 5 stocks after big drops
Rob Lenihan
4 min read
By now, you've probably heard so much about headwinds and uncertainty you think they're a singing duo or a cut rate law firm.
However, headwinds and uncertainty have become a grim fact of life for investors, who have watched the S&P 500 move into correction territory, the Nasdaq nosedive and the Dow Jones Industrial Average tumble toward what could be its worst week in two years.
The markets have been roiled by President Donald Trump's on-again-off-again tariffs and massive federal job cuts courtesy of Tesla (TSLA) CEO Elon Musk and the Department of Government Efficiency.
The University of Michigan’s index of consumer sentiment fell more than expected in early March, while long-term inflation expectations rose to the highest since the early 1990s.
President Donald Trump has doubled down on his tariff threats.Joe Raedle/Getty Images
Fund manager puts capital to work
“The klaxon of layoff headlines, a falling stock market, and tariff fears were a big blow to consumer confidence in early March,” said Bill Adams, chief economist for Comerica Bank.
“People who are afraid the economy is headed into a ditch won’t buy new cars or houses, go out to eat, or go on vacations," he added.
What's Chris Versace doing at a time like this? The lead portfolio manager of TheStreet Pro Portfolio is going shopping, that's what.
"Following the combination of the market being oversold, deeply oversold, especially for the S&P 500 and today's softer-than-expected CPI report, we were able to put some more capital to work for the portfolio," he said, referring to the Consumer Price Index, which came in slightly below expectations for February.
Versace picked up shares of big-data software company Palantir, along with Taser maker Axon (AXON) , financial services giant American Express, drive-through coffee chain Dutch Bros. (BROS) , workflow-software platform ServiceNow and chipmaker Marvell (MRVL) .
ServiceNow has been hit hard lately. The shares are down roughly 20% year-to-date, and much of the pressure stems from concern about federal-spending cuts related to Doge.
"But with Congress kind of reasserting itself in terms of the approval process, we think that a lot of the bluster isn't going to translate into the degree of cuts that were initially targeted," Versace said.
ServiceNow's stock (NOW) moved up recently after the company released its newest software platform, Yokohama, which comes with teams of preconfigured AI agents and enables users to build and manage their own.
The company also agreed to purchase AI startup Moveworks for $2.85 billion in a cash-and-stock deal.
Wall Street veteran warns of headwinds
Versace reminded investors that even though the trades took advantage of the market's oversold condition, he still sees the two-headed monster of uncertainties and headwinds in our future.
"We still have the prospect of additional tariffs ahead and the impact that is likely to weigh on companies when they issue their June-quarter guidance [within] their March-quarter results," he said.
"Now, that includes any Trump response to today's EU countermeasures, as well as reciprocal tariffs that Trump has shared will go into effect on April 2nd," the veteran fund manager noted.
And when uncertainty happens, he said, companies do the deer-in-the-headlights routine.
"So the bottom line here is that when we get that June-quarter guidance, we would not be surprised to see companies take a more cautious path, given the uncertainty that is out there and likely incremental uncertainty depending on what happens next on those tariff fronts," Versace said.
M&A activity also seems to be on the rise. Reuters reported that dealmakers are confident that the pace of mergers and acquisitions will pick up later this year.
"Our clients are waiting and seeing to see how things work out," said Scott Barshay, a partner at the Paul Weiss law firm. “We are busy. ... It's hard to see the year ending on a slow note.”
Versace said that "there are a lot of thoughts that as the regulatory environment loosens, we could start to see an even bigger pickup in M&A activity."
After the trade, Axon will account for roughly 2.2% of the portfolio’s assets, American Express (AXP) for 2.8%, Dutch Bros for about 2.8%, Marvell for 3.1% and ServiceNow for 3.75%.
Palantir, (PLTR) meanwhile, will account for roughly 1.5% of the portfolio’s assets.
