The Long View
Vincent Montemaggiore: ‘The Two Best Defenses Against Tariffs Are a High-Gross Profit Margin and Pricing Power’
Apr 15, 2025
Vincent Montemaggiore, a seasoned portfolio manager at Fidelity, shares invaluable insights on navigating tariffs and market disruptions. He discusses the importance of high gross profit margins and pricing power for robust investment strategies. The conversation highlights the shift towards European growth opportunities and the significant role of AI in enhancing business efficiencies. Montemaggiore emphasizes maintaining an objective perspective to counter behavioral biases and the necessity of collaboration in investment firms to tackle uncertainties.
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Quick takeaways
- Investing in high-quality companies with competitive advantages is crucial, especially in the face of tariff-related market challenges.
- Understanding and navigating behavioral biases is essential for maintaining investment discipline and making rational decisions under pressure.
Deep dives
Investment Philosophy and Tariff Impact
The investment approach focuses on acquiring high-quality companies with competitive advantages and strong returns on invested capital, regardless of geographic location. The recent turmoil caused by tariff announcements presents an opportunity for careful analysis and portfolio positioning. The strategy involves assessing exposure to tariffs and identifying undervalued stocks, even if they face tariff-related sales pressures. Analysts are engaged in scenario analysis to determine which companies may be resilient or unfairly punished by market reactions.
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