Despite the bounce in January, hedge fund manager Dan Niles sees more volatility ahead. He noted that the S&P 500 climbed seven times last year, but ended 2022 with losses of about -20%. The index of large-cap US stocks jumped 6.2% in January. “I would say that’s pretty typical even during a tech bubble,” Niles, founder and senior portfolio manager at Satori Fund, told CNBC’s “Street Science Asia” on Thursday. Top Picks for 2023 Amid volatility, here are five top picks for investors in Niles. He said his speculative fund outperformed the S&P last year by making money, but didn’t disclose its exact performance. Previously, Niles has said that pairing short positions with long positions is key to his strategy. “When thinking about my top picks for 2023, the first thought that comes to mind is how volatile this upcoming year could be,” he said in notes sent to CNBC. Cash investors made a higher allocation to cash in their portfolios last year due to rising interest rates. It remains one of the top trades this year for Niles, who called it “his favorite investment in 2023.” Specifically, he suggested three-month Treasury bills yielding about 4.5% in early 2022, compared to just 0.03%. to reinvest if the S&P bottoms out in 2023,” Niles said. Meta Niles says Meta’s core business is “really fine,” even though the stock got crushed last year. He said That Reels, its Tik Tok-like product, is doing well. The stock is now “very cheap,” he said. “Meta looks to be a solid long as we believe the stock is undervalued relative to what it should be.” Meta stocks jumped in after-hours trading Wednesday as investors cheered earnings that topped estimates. Healthcare Exchange-Traded Fund Health Care Select Sector SPDR Healthcare Is Very Defensive When Markets Take a Hit , said Niles, who said there are a number of good dividend-paying stocks in the space. Mitsubishi Financial Group Niles said Mitsubishi Financial Group, Japan’s biggest bank, is his top pick this year. He noted that Treasury yields are higher Due to this, Japanese banks should be more profitable. In December, Bank O f Japan unexpectedly changed its yield curve control policy to raise its target range for the 10-year Japanese government bond yield. This spurred a sell-off in bonds around the world, pushing up yields. Niles called this a “massive change” for banks in the country, and said rates in Japan would eventually rise. Global X Uranium ETF Niles told CNBC that the outlook for uranium is being driven by countries’ reluctance to rely on Russia for energy. He added, “With Russia invading Ukraine, the world is again looking to nuclear for clean energy and as a means to achieve energy independence from Russia.” Uranium is used as fuel in nuclear power plants. — CNBC’s Elliot Smith contributed reporting.
Bearish hedge fund manager Dan Niles names his top five trades for 2023
