Investing Advice From CIO and Strategist Mike Wilson of Morgan Stanley

  • Mike Wilson is in charge of US stocks and retail investment advice advice for Morgan Stanley.
  • He told Insider about his approach and how he made a string of correct calls in the last few years.
  • Wilson also reminisced about his first stock pick, when he scored a major hit by buying Nike.

Mike Wilson of Morgan Stanley is a markets junkie, and he may not have had much choice in the matter.

For one thing, when his mother went to work as a financial advisor in the early 1980’s she would often take her work home and teach him the basics of investing. It was enough to pique his interest, and when he made his first personal investment, the results only heightened his fascination.

“She had success and she taught me a little bit about the markets and I started following stocks,” he told Insider. “I bought my first stock in eighth grade and I kind of got hooked.”

Wilson, 55, is Morgan Stanley’s chief investment officer and chief US equity strategist. He’s responsible for all of the investment and asset allocation advice the firm provides to retail clients, who have about $2.4 trillion invested cumulatively.

But when he was just getting started as an investor, Wilson didn’t have that kind of funding. For his first real investment, Wilson says he saved up around $500 and put it in Nike when he was 13 years old, the same year the company went public.

Nike was already a big deal in the world of running shoes when it IPO’d in December 1980. Plus, a friend who ran track liked Nike’s Waffle Trainer shoes. That was enough to convince Wilson to put all his money in the stock. 

“Not a lot of research went into that pick,” he said. “Not only was it my first stock, it was also my biggest and best investment I’ve ever had in terms of percentage gain.”

A few years later, Michael Jordan helped Nike explode into a worldwide phenomenon. Nike’s annual sales nearly quintupled through the end of the 1980’s, and Wilson says that one stock, which he held into the 1990’s, paid for a good chunk of his college education. Between Nike’s IPO and a long-term peak in late 1992, the stock returned 1,466%.

After college, Wilson pursued a career in investment banking, but shifted into sales and trading a few years later. He concentrated on tech stocks and rose through the ranks to become the firm’s chief investment officer for wealth management a decade ago, then added his US stock strategy title and another CIO role in institutional securities.

A Wall Street outlier

As chief stock strategist Wilson has picked up a reputation for being an outlier, as he’s often been either the most bullish or the most bearish lead strategist on Wall Street in terms of S&P 500 estimates.

“I’ve found myself to be at the extreme of both sides almost every other year,” he said, adding that he faced skepticism following his optimistic forecasts in 2017, his more conservative views in 2018, and his bullish view on stocks after the COVID-19 crash. But all three proved correct.

“We’re trying to play the game the same way our clients are playing it,” Wilson said, meaning that even if stocks generally rise over time, his readers want to know if they should be bullish or bearish and aligned for offense or defense. “And I think they appreciate that, because everybody knows you’re not going to get it right all the time.”

Wilson says he absorbs the information he uses to make those calls in an “unstructured” manner. For instance, he starts his day at around 5:00 or 5:30 am, and spends the next two hours checking the news and reading research from Morgan Stanley and other sources. Then he ties what he reads into how he think about the big picture. 

“Whenever I’m looking at information that’s coming in, it’s always in the context of ‘does this support the narrative or does it fly in the face of the narrative,'” he said. “What could make this call wrong? And then ‘when do I have to get out of this call and onto the next one? I’m always thinking, ‘What’s next, what’s next, what’s next?'”

One of the most important elements of his process involves evaluating the relationships between different segments of the market — Wilson’s comparative evaluations of cyclicals and

defensive stocks

, value vs. growth, or quality and junk will be familiar to readers. He says those relationships provide vital information about the economy and the market’s trajectory.

“Half of the battle of investing is just not getting blindsided by these surprises,” he said. “Not taking a position or an investment over the cliff when there’s so many signs telling you that it’s probably time to go the other way.”

In 2022, Wilson is back in more of a pessimistic mode with a year-end target of 4,400 for the S&P 500. In an interview on March 9, he said he was leaning toward a more bearish view than that. If so, he would likely cut his target to 3,900 or 4,000.

“The odds have increased that our economic forecast are going to be too good, too strong, and our earnings forecast is gonna be too high,” he said. “We haven’t fully flipped to our bear case yet, but it definitely increases the odds.”

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