Billionaire investor Alex Waislitz says market is close to bottom and interest rates may not rise as high as many fear

A year ago Alex Waislitz correctly called rate rises and inflationary pressure. Now he says ‘green shoots’ for economic cooling mean the worst could soon be over.

Billionaire Alex Waislitz is optimistic about the outlook for shares. Aaron Francis/The Australian

Billionaire investor Alex Waislitz says that equity markets are nearing the bottom amid optimism that early signs of the easing of some inflationary pressures have been spotted.

Mr Waislitz a year ago predicted that interest rates would rise due to a combination of restricted supply chains in many sectors and a lack of workers that would push up wages to result in inflationary pressures across the economy.

Now he believes that the worst could be over for the market and believes a general bearish outlook on stocks in Australia and abroad could soon lift.

“While it is very early days, we are starting to see initial signs that the worst of the global declines may be over,” Mr Waislitz said on Wednesday.

“The price of many commodities are well off their 52-week highs and we are getting reports out of the US that the pressure on supply chains which has contributed to the inflationary climate is beginning to ease.”

The billionaire, who has made his fortune investing in Australian-listed small caps, property in the US and technology start-ups and early stage companies in Israel and around the world, even predicted that monetary policy would not be tightened as much in the next year as widely being predicted.

“If these ‘green shoots’ of economic cooling continue to emerge in the coming months, it is possible that central banks will not go as hard with their tightening programs as the market currently anticipates,” Mr Waislitz wrote in a note to investors in his listed investment company Thorney Opportunities.

“This would be a positive sign and could lead to a turnaround in the current negative sentiment [given] global markets remain in a state of volatile negativity with inflation fears and interest rate concerns continuing to worry investors and driving down the performance of portfolios around the world.”

Mr Waislitz has in recent years made good returns on investment in pre-float technology firms, including crypto miners and foreign exchange and contracts-for-difference brokers.

But many of those investments have suffered during 2022 as tech stocks have been hit hard by negative sentiment and the bear market conditions on the NASDAQ exchange in the US.

One stock caught up in the downturn has been crypto miner Iris Energy, which Mr Waislitz had been an early pre-float investor in.

Iris Energy floated on the NASDAQ in a blaze of publicity last November, but has since lost about 86 per cent of its value.

Mr Waislitz’s private Thorney investment business runs two listed companies, Thorney Opportunities and Thorney Technologies, and Waislitz has also teamed with business partner Antony Catalano to own the former Rural Press collection of regional newspapers and online media assets.

In the note to investors, Mr Waislitz said the Thorney Opportunities investment portfolio had ended the year to June 30 down 4.68 per cent, though it had outperformed the S&P Small Ordinaries Index that had fallen 19.52 per cent in the same period.

The privately-held regional media play, Australian Community Media, is the biggest holding in Thorney Opportunities portfolio accounting for 27 per cent of its portfolio.

In commentary released to the ASX on Wednesday, Thorney Opportunities said ACM was “continuing to grow its subscriber base across its regional mastheads” and that it was continuing to consolidate the digital real estate businesses it controls.

The second largest holding in the Thorney Opportunities portfolio is MMA Offshore, a provider of marine and subsea services to the energy and wider maritime industries.

MMA Offshore has performed strongly this year, rising about 64 per cent since January 1, and Mr Waislitz said he is supportive of its $8.4m acquisition of Subcon International. “[The deal] is expected to contribute positively to earnings with access to further growth opportunities under the company’s ownership,” he wrote.

Thorney Opportunities also has shares in struggling theme park operator Ardent Leisure, which is exiting the US entertainment sector with a $1.1bn deal to sell its Main Event business to American firm Dave & Busters.

Ardent Leisure is returning about $455m from the deal to its shareholders via a capital return and special unfranked dividend. Thorney Opportunities said the transaction would free up $5.6m cash for it to reinvest in other shares.