Company Interview / Three stocks seen as medium-term shelters

Key points:

Rising geopolitical risk and oil market disruption push Birkhold towards cash and liquid instruments Australian “halo” infrastructure plays such as Telstra, BHP and Sandfire seen as medium‑term shelters Beaten‑down SaaS and AI‑exposed stocks viewed as emerging value, despite obsolescence risk Growing concern over AI funding strain and private credit liquidity as the cost of capital climbs

John Birkhold from TWC Invest outlines a cautious approach to markets as geopolitical risks in the Middle East and rising stresses in private credit reshape the investment landscape. Birkhold draws parallels with the 1970s oil shock and the 1989–90 Gulf crisis, stating that damage to key oil and gas infrastructure could trigger severe downside for risk assets. In that scenario, he regards short‑term cash and liquid interest‑bearing instruments as the most sensible safe haven.

Birkhold highlights what he terms “halo” trades in Australia – high-asset, low-obsolescence infrastructure-style names – as potential medium‑term shelters. He points to Telstra (ASX:TLS), rail operators, desalination-linked plays, BHP (ASX:BHP) and Sandfire Resources (ASX:SFR) as examples he views as offering long‑lived assets, reasonable valuations and strong dividend yields, while warning these are typically lower-return businesses. He contrasts them with low-asset, high-obsolescence SaaS names such as Microsoft (NASDAQ:MSFT), Adobe (NASDAQ:ADBE), Salesforce (NYSE:CRM) and Life360 (ASX:360), which he regards as beaten‑down but still cash‑generative, and therefore potential value.

Artificial intelligence funding and private credit sit at the core of Birkhold’s concerns. He cites OpenAI’s reported 17.5% debt offer as a sign of capital intensity and questions who will fund ongoing AI losses as the cost of capital rises. Private credit, particularly gated retail funds, is described as a “clear and present danger” if promised liquidity cannot be met without deep haircuts.