Episodios

  • The secret to finding stocks you can hold for 20+ years

    The secret to finding stocks you can hold for 20+ years

    · The Rules of Investing

    While Warren Buffett's favourite holding time may be forever, the average holding period for a typical investor is now just 5.5 months. In a world where news, analysis and investment ideas are readily available at our fingertips, investors have quickly forgotten the benefits of long-term compounding and instead are focused on the next great stock, driven likely by their fear of missing out. We've all succumbed to it, there's no point denying it. How many of us jumped on the buy-now-pay-later trend, the lithium trend, the uranium trend, and now, the AI trend, as stocks soared to stratospheric heights? How many of us have attempted to hold on for dear life (HODL) as some of these companies crashed back to Earth? So, how can you identify the companies that continue to win over the long term? And by long term, I don't mean five-plus years, but 20. In this episode of The Rules of Investing, Janus Henderson's Josh Cummings outlines what makes a winning long-term stock - a process that has helped the team top the league tables for their consistent outperformance over the last five and 10 years - and provides a few examples.We also take a deep dive into artificial intelligence - and why Cummings believes AI will become even larger, more pervasive, and more impactful on our lives than we could ever conceive of today. https://www.livewiremarkets.com/wires/the-secret-to-finding-stocks-you-can-hold-for-20-years Timecodes0:00 - Intro2:16 - The secret to consistent long-term outperformance3:30 - What the team got right and wrong over the last 12 months4:38 - The impact of AI on mega-cap tech companies7:19 - Is there too much "faith" in the AI theme?9:48 - Is this the death of value investing?11:58 - What it's like on the ground in the US right now15:14 - Impact of cumulative inflation on businesses18:13 - Nvidia's antitrust charges20:42 - Factors that can help investors identify consistent winners22:58 - Celebrity CEOs and red flags25:20 - Should you really HODL?26:58 - Smaller companies employing disruptive innovation31:13 - Lessons from the team's meeting with OpenAI CEO Sam Altman33:49 - Innovation is a scale game - why the big are only going to get bigger35:01 - What could go wrong with AI (i.e. are we in for an iRobot scenario)40:22 - Two things investors are getting wrong today42:36 - Why you should invest in what you know (and trust your gut)46:45 - One stock Josh Cummings would own if the market closed for 5 years

  • Australia has all the ingredients to become a superpower in this space

    Australia has all the ingredients to become a superpower in this space

    · The Rules of Investing

    Nowadays, it’s quite easy to get swept up in the negativity around our economic plight. Living costs are a very real concern, as are increasingly unaffordable house prices. But, as Australians, we’re also quite fortunate.

    Our economy has enjoyed an unprecedented run of growth, we’re highly educated, we’re resource-rich, and we have opportunities – one of which lies in energy creation.

    As Darren Brown, Co-Managing Director, Renewables Australia at Octopus Investments tells it, there is “a really unique opportunity for Australia to become a superpower in renewable energy”.

    The conversation highlights the transformative changes in the energy sector, the strategic initiatives underway, and the opportunities for investors in the renewable energy market in Australia.

    Brown's unique perspective, gained from his experience in both fossil fuels and renewables, provides valuable insights into the industry's evolution and the potential for long-term growth in the renewable energy space.

    Note: This episode was recorded on 29 August 2024.

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  • What happened to that recession we were promised?

    What happened to that recession we were promised?

    · The Rules of Investing
    In 1990, then-Treasurer Paul Keating famously said that the country's economic downturn was the “recession that Australia had to have.”

    Although Keating was responding to a poor GDP print and doing his best to control the narrative, at the start of the rate hiking cycle in mid-2022 most in the market spoke of an impending recession with almost as much certainty. As it stands today, said recession is yet to materialise.

    So, what happened? And perhaps more importantly, what does it mean for investors?

    In explaining why a recession hasn’t occurred, Sebastian Mullins, Head of Multi-Asset, Australia at Schroders points out that both the Australian and US governments pumped money into their respective economies—something we hadn't seen in a long time.

    “During the GFC, you had targeted programs to bail out banks and stimulate the economy, but on average, you had a very, very loose monetary policy and very tight fiscal policy to preserve balance sheets – i.e. improve the fundamentals of both corporate and government balance sheets”, says Mullins.

    “This time around, it's the reverse. We're hiking rates but the government's stimulating aggressively. So that has offset quite a bit of it”, says Mullins.

    Regarding America, where most of the recession indicators have been flashing red, Mullins adds that the US went into the current downturn un-levered – at least compared to previous episodes.

    “If you think about what the pillars of the economy are, you have the consumer, you have corporates, and you have the government”, notes Mullins.

    The US consumer de-levered after the GFC, reducing their amount of debt to GDP, as did corporations. “You'd expect higher interest rates to crack corporates”, says Mullins, but that hasn’t happened.

    And while the government has been hurt by higher rates due to the bigger interest payments on its debt pile, “If the two pillars of the private economy are fine and the corporates are all fine, then there's no recession”, says Mullins.

    Great, no recession. What about inflation?

    For Mullins, the inflation conversation depends on how far into the future you look. “So in the short term, inflation's definitely coming down,” says Mullins.

    As for the next five years and beyond, Mullins believes there are structural forces that will mean inflation could stay above the long-term targets of central banks – although that doesn’t have to be a bad thing.

    “There are more inflationary forces in the system now than they were over the past decade” notes Mullins, adding that “things like fiscal stimulus that's here to stay”.

    “You're seeing more populous governments come in around the world. You're talking about the election in the US, they're both going to spend.

    "It doesn't matter who wins, it just depends on who they spend on. But there's no tea party candidate or fiscal conservative”, says Mullins.

    Mullins points to other inflationary factors, including de-globalisation, on-shoring, and increased security spending—whether that means military, food, mineral, or cybersecurity.

    “So all that is to say, we're not saying we're going to 1970-style inflation, but if in the US 2% was the ceiling of inflation for the past decade, we think it's going to become a floor. So, it might be between two to three, maybe two to four [percent]”, says Mullins.

    So, how are you investing?

    A potentially higher floor for longer-term inflation seems like a small price to pay following the most aggressive rate-hiking cycle in living memory.

    If someone offered the current economic and investing scenario back in late 2022 and early 2023 – with equity markets near all-time highs, bonds providing a decent yield, and an absence of recession – we’d all likely take it in a heartbeat.

    So, as a multi-asset strategist, how is Mullins shaping portfolios in light of macro developments and a seemingly benign backdrop? Find out in this edition of The Rules of Investing, presented by James Marlay.

    Mullins provides a view on Australian, US, Chinese and Japanese equities, bonds, and Australian vs. US credit. Finally, he outlines the bull case moving forward as well as the biggest risk to the outlook.

    Note: This episode was recorded on 27 August 2024.

    https://www.livewiremarkets.com/wires/what-happened-to-that-recession-we-were-promised

  • Why AI will have a bigger impact on the world than the invention of electricity

    Why AI will have a bigger impact on the world than the invention of electricity

    · The Rules of Investing

    In this episode of The Rules of Investing, Livewire's Ally Selby learns about some of the companies that meet these criteria, why Rizzo believes AI will be far more transformative than investors currently think, as well as why he believes that investors are likely to do more harm waiting for a correction in some of these tech winners than a correction itself.

    Plus, he shares what he is seeing on the ground in the US right now in terms of economic weakness, the stocks he believes are worth paying up for right now, and how he takes advantage of sell-offs when he holds very little cash.

    Note: This episode of The Rules of Investing was recorded on Wednesday 14 August 2024.

    https://www.livewiremarkets.com/wires/why-ai-will-have-a-bigger-impact-on-the-world-than-the-invention-of-electricity

    Timecodes: 0:00 - Intro 2:10 - Making sense of the volatility in tech stocks 3:11 - This is a healthy bull market correction 4:44 - The true transformational nature of AI 8:11 - Spotting the imposters from the real AI winners11:06 - There are risks but we are starting to see business acceleration from AI13:27 - Should you take advantage of sell-offs in AI companies? 15:08 - What Dom is seeing on the ground in the US in terms of economic stability17:08 - How to identify winning tech stocks 19:53 - How Dom thinks about risk 22:01 - Dom's wishlist of stocks he would own at a cheaper price 24:15 - Stocks it is worth paying up for right now 26:32 - A deep dive into semiconductor stocks and cycles 30:20 - NVIDIA at the point of deceleration and what this means for investors31:16 - How to take advantage of sell-offs with very little cash 34:19 - One thing investors are getting wrong about markets 34:53 - Biggest lessons Dom has learnt during his career 39:06 - One stock Dom would hold if the market closed for 5 years.
  • Why trying to time small caps is a

    Why trying to time small caps is a "big waste of time"

    · The Rules of Investing

    Much has been made of the “Great Rotation” of late and the move away from highly concentrated large caps into small-cap equities, particularly in the US.

    Greg Dean, founder of Langdon Equity Partners, is having none of it. When quizzed about whether the rotation was impacting how Dean and his team invest, the short answer was ‘no’.

    Late last year, amid widespread commentary about 2024 being the ‘year for small caps’, Langdon wrote about the time and energy people spend talking about timing in small caps and called it a “big waste of time”. Dean feels a similar way about the rotation.

    “The reality is if you wait for the perfect time, you've probably missed out on a lot of opportunity during that period when fewer people were interested”, says Dean.

    Dean founded Langdon in 2021 on the concept of a “clean sheet of paper” – i.e. not being beholden to anyone but investors.

    His philosophy is built on deep research and holding management to account, allowing him to ‘trust but verify’. He adds that speaking with management is a delicate balance that is often “executed poorly”.

    “You think you have to be aggressive and definitive or you have to be a “yes” person and agree with everything that they're telling you, and neither of those is optimal”, says Dean.

    In the following episode of The Rules of Investing, Dean delves deeper into small-cap investing, explains why he and his team take more than 300 individual company meetings each year, talks through the current portfolio tilt, and shares why the fund favours Europe over the US.

    He also upacks two global small-cap stock ideas that highlight Langdon’s approach.

    Note: This episode was recorded on 31 July 2024. You can watch the video or listen to the podcast below.

    https://www.livewiremarkets.com/wires/why-trying-to-time-small-caps-is-a-big-waste-of-time-and-2-long-term-stock-ideas

    Timecodes

    0:00 - Intro1:36 - Investment background and founding Langdon5:05 - Biggest influences over the journey and why small caps?8:39 - Investment philosophy origin story11:01 - When is enough, enough?12:45 - The Great Rotation and current market conditions15:31 - Company meetings how the best stand out20:09 - Honing the craft23:42 - Current portfolio: underweight US, overweight Europe26:58 - Why cashflow is Landon's North Star28:07 - Other non-negotiables29:12 - Testing beliefs30:40 - Navigating patience as a small-cap investor32:57 - Small-cap stock ideas37:52 - What are investors getting wrong about today's markets?49:27 - Courage of conviction41:29 - The five-year stock

  • How to dominate small caps like Roger Federer dominates tennis

    How to dominate small caps like Roger Federer dominates tennis

    · The Rules of Investing

    In tennis, just as in investing, it's the points that you win that matter. After all, Roger Federer played 1,526 singles matches throughout his career, and while he only won 54% of the individual points within those matches, he walked away with the win 80% of the time.

    Ausbil Investment Management's fresh-faced co-head of emerging companies, and portfolio manager for its small and micro-cap strategies, Arden Jennings, is focusing on just that.

    "Stocks are just points. But it's the points that matter that win you the game. So for us, our largest detractor was still smaller than our 17th biggest winner. Even though we had an even spread of winners and losers, it was the ones that were successful that made it a good year," he says.

    And a good year it was. The Ausbil MicroCap Fund returned 33.53% in FY24, while its Australian Small Cap Fund delivered investors a nice 25.73%. Since inception, these funds have returned 20.08% (since February 2010) and 24.17% (since April 2020), respectively.

    So, where is the Roger Federer of Australian small caps seeing the most opportunity today? You'll find out in this episode of The Rules of Investing.

    Note: This episode was recorded on 30 July 2024. You can watch the video or listen to the podcast below.

    https://www.livewiremarkets.com/wires/where-the-roger-federer-of-australian-small-caps-sees-the-most-opportunity-today

    Timecodes:

    0:00 - Intro2:36 - Decisions that lead to outperformance in FY245:04 - Roger Federer's streak and lessons for investing6:13 - Interest rate expectations7:00 - Why the small-cap rebound can continue and the Great Rotation in Australia8:03 - The stocks that will benefit - HUB24 (ASX: HUB), Zip Co (ASX: Z1P), Credit Corp (ASX: CCP)9:24 - Wildcards that could impact investors' portfolios11:41 - What to expect this reporting season12:29 - Why investors should be wary of crowded trades13:24 - A stock to watch this reporting season: Aussie Broadband (ASX: ABB)14:15 - One thing the market is getting wrong right now16:24 - A story of a big win or loss from Arden's investing journey17:27 - Stories from childhood - investing at 10 years old18:01 - One stock to hold if the market were to close for the next 5 years... you'll have to listen to the interview for that one!
  • 30-year property veteran: Australia has its head in the sand on housing

    30-year property veteran: Australia has its head in the sand on housing

    · The Rules of Investing

    There's no supply in residential housing nor the majority of segments of the commercial real estate market. Sky-high construction costs are now too prohibitive. Bandaid solutions, like rent control, only backfire. And inconsistent state, federal and local policies are not helping either.

    That's according to this week's guest on The Rules of Investing, Andrew Parsons, a founder and the chief investment officer of global listed real estate manager Resolution Capital.

    While these factors continue to perpetuate Australia's housing problem, they are actually positive for long-term investors in real estate.

    In this episode of The Rules of Investing, Parsons dives into Australia's property problem, outlines what he believes to be the solution, and shares why listed property is in for a strong three to five years ahead of us.

    Note: This episode of the Rules of Investing was recorded on Wednesday 17 July 2024.

    https://www.livewiremarkets.com/wires/30-year-property-veteran-australia-has-its-head-in-the-sand-on-housing

    Timecodes0:00 – Introduction2:06 – A fascinating, under-appreciated part of the market3:45 – What is a REIT?5:30 – The key distinctions between REITs and physical property assets8:45 – Which do you prefer: an investment property or listed property assets?9:50 – Where REITs sit alongside equities and fixed income10:55 – What you’re really paying for when you buy real estate12:50 – Why property development is so difficult currently13:40 – Australia’s troubling property supply shortfall15:04 – “We don’t want urban sprawl”16:30 – How do you solve Australia’s big property problem?20:50 – The effect of interest rates on listed property, versus equities and bonds23:40 – How Resolution Capital is currently positioned33:50 – What is your best investment of all time?38:08 – Resolution Capital’s five-year pick
  • 3 compelling long-term ETF ideas for investors still on the sidelines

    3 compelling long-term ETF ideas for investors still on the sidelines

    · The Rules of Investing

    Investors are too focused on interest rates and are subsequently underweight risk assets.

    That’s the, albeit US-centric, view from Global X ETFs’ Head of Investment Strategy, Scott Helfstein.

    He elaborates by saying that the US economy is looking a lot more like mid-cycle expansion than late cycle and that “you don’t want to be sitting on the sidelines”.

    A fan of thematic investing, Helfstein goes on to highlight three big investment themes that he likes right now, including one offering the opportunity for true transformation, that’s available for the same price as the S&P 500.

    Don’t miss the latest Rules of Investing Podcast.

    https://www.livewiremarkets.com/wires/3-compelling-long-term-etf-ideas-for-investors-still-on-the-sidelines

    Timecodes

    0:00 - Intro1:12 - A unique background for an investment professional7:17 - The current state of geopolitics12:00 - Australia's position in the global landscape14:10 - The appeal of thematic investing16:42 - Where is the puck going?22:53 - Sectors versus themes26:48 - The role of thematic investing in a portfolio28:46 - Nothing but ETFs?30:27 - Ranking the big themes34:22 - A theme that is flying under the radar36:40 - Risks in thematic investing38:32 - Mama's favourite son39:49 - What are investors getting wrong?41:07 - One theme for the next five years

  • More please! Dr Don Hamson’s cure for the 'disappearing dividends' on the ASX

    More please! Dr Don Hamson’s cure for the 'disappearing dividends' on the ASX

    · The Rules of Investing

    Fully franked dividends are a prized asset of the Australian market. While the lack of growth is often lamented, plenty of self-funded retirees are content to dine on the distributions of Australia's big miners and banks.

    And who can blame them - high commodity prices, particularly in iron ore and lithium, resulted in record dividends from the top end of town. However, after peaking in 2021 and 2022, dividends from mining companies are steadily declining.

    Research from Commsec published late in 2023 showed that the 12-month forward dividend yield for the ASX200 has been below the long-run average of 4.7%, and dividend per share estimates have been cut by 14 per cent.

    The good news is that Australian banks have been increasing their dividends whilst also enjoying surging share prices. There is also a long list of consistent dividend paying stocks that often fly under the radar.

    In this episode of the Rules of Investing, Livewire's James Marlay speaks with Plato Investment Management's Dr Don Hamson to get his diagnosis on the case of the 'disappearing dividends'. Hamson insists that diversification remains a free lunch for investors, especially for those seeking stable and consistent returns. He also emphasizes that fully franked dividends continue to stack up as the backbone of an income-generating portfolio.

    Timecodes:

    0:00 - Introduction1:43 - The outlook for dividends8:27 - Dividends versus Fixed Income10:25 - Dwindling dividends13:08 - The dividend outlook for mining shares17:00 - Tactics to combat declining dividends20:07 - Australian banks - stable but expensive22:10 - The case for diversification25:15 - Winning by avoiding the losers28:09 - What returns are realistic for Plato?31:26 - A lesson from Medibank Private34:10 - Don’t focus on the US election36:23 - The stock most likely to be a 5-year resident in the Plato Australian Shares Income Fund
  • Recession a line ball as Australia groans under a massive debt load

    Recession a line ball as Australia groans under a massive debt load

    · The Rules of Investing

    This time last year, PIMCO Portfolio Manager Adam Bowe told Livewire that there was a 50/50 chance that Australia would slip into recession. March GDP figures show that the economy grew at just 0.1 per cent, the slowest rate since December 2020. Today, Bowe says interest rates are sufficiently restrictive, and the chance of recession remains a ‘line ball’.

    In this episode of The Rules of Investing, Bowe explains why interest rates in Australia don't need to go higher, why house prices have been immune to interest rate increases and where he is finding the best income opportunities right now.

  • Rudi: AI is the end of investing as we know it

    Rudi: AI is the end of investing as we know it

    · The Rules of Investing
    While "survival of the fittest" certainly applies to the Earth's abundance of flora and fauna, it may be time for investors to take a page out of Darwin's book. That's according to FNArena's Rudi Filapek-Vandyck, who believes the market has irreversibly changed since 2014 - as has the way investors should value stocks. In this episode, Rudi outlines why he believes technological innovation will transform the market as we know it. He also discusses some of his favourite ASX-listed stocks to play the AI theme, the importance of quality companies in today's markets, and what it takes for a company to be an all-weather stock.

    Note: This episode was recorded on Wednesday 29 May 2024. Note #2: Ally was today years old when she learnt what R.E.M. is, she apologises for any harm her ignorance may have caused hardcore fans. If it's any excuse, the song was released seven years before she was born.

    https://www.livewiremarkets.com/wires/rudi-ai-is-the-end-of-investing-as-we-know-it

  • The investment secrets of Australia's billionaires

    The investment secrets of Australia's billionaires

    · The Rules of Investing

    There seems to be no stopping Australia's ultra-wealthy, with the number of billionaires down under growing by 14.4% over the past 12 months, to a record 159 people. For some context, in 2020, this number was 117, according to The Australian.

    While it's wonderful to daydream about what you would buy or do with a few billion dollars, the true secret success of the ultra-wealthy is their ability to stay that way. After all, how many stories have you read of lottery winners squandering their newfound wealth just a few short years later?

    So, how do the other half continue to grow their wealth?

    To find out, Livewire sat down with MRB House's Peter Magee and Walsh Capital's Louise Walsh for their insights into how Australia's ultra-wealthy invest as part of Livewire's Undiscovered Funds Series.

    They share their tips and tricks for identifying "exceptional" funds, outline the factors that are important to their processes, share what to do when a fund isn't performing as expected, and name one recently launched fund that has impressed in recent years.

    Note: This interview was recorded on Wednesday 15 May 2024.

    https://www.livewiremarkets.com/wires/the-investment-secrets-of-australia-s-billionaires

  • 700+ meetings each year: How WAM Global uncovers under-the-radar stocks

    700+ meetings each year: How WAM Global uncovers under-the-radar stocks

    · The Rules of Investing

    In investing, just as in love, trust is everything - and without it, you really don't have anything at all.

    It's for this reason that the Wilson Asset Management global equities team meets with more than 700 management teams across the world each year - including in the US, Japan, and Europe. In addition, they also meet with competitors and suppliers, as well as talk to current and past employees and industry experts.

    According to WAM Global (ASX: WGB) lead portfolio manager Catriona Burns, the team does this because trust in a company's management team is paramount.

    "Have they hit their targets? Have they done what they said? If we have any doubts on that trust factor, for us, that's completely a non-negotiable and we won't invest," she says.

    Burns is reading between the lines, and looking beneath the surface for red flags. And while management teams selling stock, poor track records and value-destructive deals can certainly be warning signs, she argues that alignment - and the lack thereof - can often be far more telling for the future direction of a company's share price.

    "Incentives drive outcomes... I can't tell you how many times I have seen incentives for management based on earnings per share growth," she says. "Companies just chase acquisitions to meet earnings growth without thinking about the returns that are being generated on the dollars spent. That happens time and time again and is a massive red flag."

    In this episode of The Rules of Investing, Burns takes listeners through some of the companies that have managed to pass her filters, as well as why catalysts are so important for investors with a penchant for value.

    She also outlines why the listed investment company's growing annual yields won't be slowing over the next five years, what it's actually like on the ground in the US right now, as well as what the US election at the end of the year could mean for markets.

    Note: This interview was recorded on Tuesday 14 May 2024.

    https://www.livewiremarkets.com/wires/700-meetings-each-year-how-wam-global-uncovers-under-the-radar-stocks

    0:00 - Intro 1:21 - What it is actually like on the ground in the US 2:14 - Catriona Burns' outlook on rates and inflation 3:26 - The WAM Global (ASX: WGB) investment process (and the importance of trust) 8:09 - Alignment is everything + why CTS Eventim (ETR: EVD) is a good example 9:35 - Artificial intelligence and where Catriona is invested here 13:38 - On not owning NVIDIA (NASDAQ: NVDA) 14:41 - Why she's overweight financials and healthcare 16:47 - Picks + shovels approach versus drug developers in healthcare 18:18 - Stock with major catalysts on the horizon: CTS Eventim (ETR: EVD) and Quanta Services (NYSE: PWR) 20:01 - Why catalysts are so important 21:27 - The sustainability of WAM Global's yields + franking credits 22:46 - How to think about performance 24:33 - Why Catriona is bullish on the outlook for global small and mid caps 25:42 - One thing investors are getting wrong about today's markets 26:51 - US politics + what a Trump win would mean for markets 29:10 - A story of a loss from Catriona's career and what she has learnt from this 31:19 - One stock that Catriona would buy and hold if the market were to close for the next five years: Intercontinental Exchange (NYSE: ICE)
  • Chris Stott’s 5 high conviction stock ideas for the new bull market

    Chris Stott’s 5 high conviction stock ideas for the new bull market

    · The Rules of Investing

    Time flies when you’re having fun! While the last five years have had plenty of ups and downs, they haven’t dented the enthusiasm and passion of small-cap fund manager Chris Stott from 1851 Capital.

    Stott launched 1851 Capital in 2020, just before COVID-19 hit, wreaking havoc on the market and his portfolio. Since then, Stott has comfortably beaten his small-cap benchmark, growing the fund’s initial capital of $80 million to almost $500 million through a combination of inflows and capital growth.

    Whilst there was some exuberance after the initial shock of the pandemic, the past few years have been far more challenging for small-caps investors.

    “Over the past four and half years, the small-cap index has returned 3% per annum. If you look at the 30 years before we launched the fund, it was 10% per annum. So quite a significant underperformance, quite dismal in fact,” Stott says.

    However, late October 2023 marked a turning point and the small-cap index has recently entered a technical bull market, having rallied more than 20%.

    So where to from here and which companies does Stott believe can sustain the early track record that 1851 Capital has established?

    In this episode of The Rules of Investing, Stott shares his lessons from starting a new fund, why he believes the bull run in small caps can continue and five of the stocks he is backing to deliver market-beating returns.

    For those of you with a good memory, Stott was last on the podcast in June 2020, when he tipped NextDC (ASX: NXT) as the one stock he would hold if markets were to close for the next five years. Shares in NextDC have gained more than 75% over that time, and the company is now in the ASX100, forcing Stott to exit his position. Naturally, we’ve asked him for a fresh idea.

    Note: This episode was recorded on Wednesday 8 May 2024.

    https://www.livewiremarkets.com/wires/chris-stott-s-5-high-conviction-stock-ideas-for-the-new-bull-market

  • Christopher Joye: No margin for error for risk junkies craving rate cuts

    Christopher Joye: No margin for error for risk junkies craving rate cuts

    · The Rules of Investing

    The past six months have been golden for investors, with everything from equities to gold and even Bitcoin enjoying stellar runs. And if risk assets are not your bag, then there have been juicy yields on offer across a range of cash and fixed-income asset classes.

    Animal spirits woke from their slumber in late October 2023 when the Fed effectively claimed victory in the fight against inflation. Markets have been led to believe that rate cuts are a forgone conclusion in the year ahead, and participants have been piling into risk assets accordingly.

    Christopher Joye, portfolio manager and chief investment officer at Coolabah Capital Investments, says that markets have become so complacent that they appear to be completely ignoring a growing set of data suggesting that the path forward might not be smooth.

    Most notably, the resurgent inflation data coming out of the US is causing interest rate cut expectations to be dialled back and kicked down the road. When asked what he thought investors were getting wrong about markets today, Joye was quick to call the dichotomy between what the economy is suggesting needs to happen with interest rates and market expectations.

    “If this strong data keeps coming through then hold onto your hats because the world is not priced for this risk. Make no mistake, there is no margin for error in listed equities. There is no margin for error in venture capital, private equity, zero in crypto, in commercial real estate, nothing,” Joye argued.

    Tune in to the latest episode of the Rules of Investing, where Livewire’s James Marlay ask Joye about his views on the outlook for both the US and Australian economies, the three risks he is watching and where he sees value in Australian residential real estate.

  • Why Ben Clark is taking profits on growth stocks (and where he's putting that money to work)

    Why Ben Clark is taking profits on growth stocks (and where he's putting that money to work)

    · The Rules of Investing

    Quality growth stocks, those with fortress balance sheets, impressive moats, structural tailwinds and top-notch management teams, have had a stellar run recently. Take Goodman Group (ASX: GMG) for example, which has risen 66% over the past year. Or Megaport (ASX: MP1), up over 252% in 12 months alone.

    If you're like this anonymous writer, you've probably started to ponder whether it's time to trim some of your winning positions and take some profits.

    And according to TMS Capital's Ben Clark, we may have just reached that point.

    "A lot of investors are trying to chase a very small number of stocks in Australia because of the AI trade," he says. "And I'd just be a bit wary about that because although those companies absolutely should benefit, it's just how quickly those benefits flow through and whether the market has just got a bit ahead of itself in terms of the benefits that will come through in the medium term."

    In this episode of The Rules of Investing, Clark sits down with Livewire's Ally Selby for a conversation on all things artificial intelligence, growth investing and holy grail stocks.

    He shares where he is putting some of the firm's dry powder to work, a few reasons why investors should feel optimistic about the outlook for markets, and whether he would be buying the AI behemoths both globally and locally today despite their stellar runs over the last six months.

    Plus, Clark shares why the tables may be turning once again for out-of-love growth darling CSL (ASX: CSL).

    Note: This episode was recorded on Tuesday 9 April 2024.

    Timecodes:

    0:00 - Intro 1:54 - Ben Clark's outlook for the remainder of 2024 4:17 - Record cash holdings in the US and what this means for markets 6:51 - Why Aussie investors are also holding a lot of cash 7:39 - The most common question Ben Clark is hearing from clients 10:01 - The takeaways from Ben's trip to SXSW in the US12:13 - Learnings from a private meeting with a Google executive 15:11 - The outlook for Microsoft (NASDAQ: MSFT) and Google (NASDAQ: GOOGL)16:25 - Can the momentum continue for global AI winners like Nvidia (NASDAQ: NVDA) 19:17 - The ASX-listed stocks that directly benefit from AI 23:17 - Why some of these stocks' share prices may have gotten ahead of themselves24:30 - Holy grail stocks - and why Brickworks (ASX: BKW), WiseTech (ASX: WTC), REA Group (ASX: REA) and CSL (ASX: CSL) make the cut 29:32 - Where Ben Clark has started to take profits 31:28 - And where he is putting that cash to work 36:11 - One thing the market is getting wrong today 38:03 - Lessons for growth investors from the 2022 bear market 42:59 - A stock to buy and hold for the next five years
  • The next 10 years in ETF growth could be dominated by this asset class

    The next 10 years in ETF growth could be dominated by this asset class

    · The Rules of Investing

    If there is any one investment product that has experienced a true boom over the last 10 years, it is exchange-traded funds (ETFs) and exchange-traded products (ETPs) more broadly.

    The number of listed products has increased by 17.5 times in Australia during the last decade alone. More than 300 products are now listed across the ASX and CBOE exchanges and two million Australians have at least one ETF in their portfolio.

    And, as if you need more proof of the growth of ETPs, 2024 marked the first time that inflows outpaced those going into unlisted managed funds.

    So if we've seen this growth over the last decade, what could the next 10 years hold?

    In this episode of The Rules of Investing, we put this and other questions to Tamara Haban-Beer Stats, Director and ETF/Index Investments Specialist at BlackRock Australia. BlackRock is the world's largest asset manager and its ETF arm iShares runs 49 ETPs in the Australian market.

    In this episode, Tamara also discusses the key mega forces that BlackRock believes could drive markets over the long run, where they are overweight in portfolios and the asset classes they believe could see the biggest growth within ETPs over the coming years.

    Note: This episode was recorded on Tuesday 19 March 2024.

    Timestamps0:00 - Intro2:21 - BlackRock's outlook for the next 12 months4:06 - What the new investing regime means for ETF investors6:17 - The five "mega forces" of investing 9:13 - Currency impacts on ETF returns10:27 - Will the Australian Dollar rebound in late 2024?13:45 - Should investors consider hedged ETFs?14:55 - Opportunities in Japan and the US16:47 - Why the AI boom won't be early 2000 all over again18:02 - The explosion of interest and uptake in ETFs21:31 - The asset class that could gain the lion's share of growth in the future23:17 - Other interesting innovations in the global ETF market25:06 - Which products are seeing the most inflows and outflows in 2024?27:31 - The Rules of Investing's regular questions (with an ETF twist)
  • Warryn Robertson’s guide to picking the best infrastructure stocks on the ASX and abroad

    Warryn Robertson’s guide to picking the best infrastructure stocks on the ASX and abroad

    · The Rules of Investing

    Warryn Robertson, portfolio manager and analyst at Lazard Asset management, understands the nuances of infrastructure assets like few others in the market. His approach is to find monopoly assets with inflation protected revenues, high margins and reasonable leverage then buy them at attractive prices.

    Of the 400 listed infrastructure stocks globally only 160 have passed the four filters and typically Lazard’s Global Listed Infrastructure Fund will own just 25 to 30 of those companies. Given the attractive nature of infrastructure assets it is unsurprising that sovereign wealth funds and private equity firms are also circling these assets. Robertson estimates that of the 160 stocks that meet his criteria 25 have been taken private and delisted.

    The situation in Australia is even more challenging, of the 14 infrastructure and utility stocks on the ASX valued at more than $1 billion just four meet Warren’s criteria as being ‘preferred infrastructure’.

    The good news is that Robertson is a firm believer and concentrating your capital into your best ideas. In this episode of the Rules of Investing, Warryn Robertson reviews the recent performance of that asset class through an inflationary environment, explains why US utilities look vulnerable and shares what he believes are the best opportunities in infrastructure.

    Robertson also reveals what he regards as the top infrastructure stock on the ASX and an infrastructure company with an absolutely stunning earnings outlook.

  • The policy overhaul Shane Oliver would make to secure Australia's fortunes

    The policy overhaul Shane Oliver would make to secure Australia's fortunes

    · The Rules of Investing

    "Living Legend", "One of a kind", and "Diamond in the Rough are not terms usually bandied about when describing economists! But these are just a few of the hundreds of messages of support and appreciation that flooded a recent social media post recognising the 40-year tenure Dr Shane Oliver to AMP.

    Shane has dedicated his years to educating Australians on all matters of the economy. His style tends to be glass half full, and you'll rarely hear him pushing doomsday forecasts. He also possesses an uncanny ability to make complex matters easy to understand and is usually armed with some cracking charts to drive home his points.

    In this episode of the Rules of Investing, Shane explains why central banks are close to pulling off Mission Impossible and avoiding recession. He believes interest rates have peaked and will drift lower as inflation returns to the RBA's target range. The episode also touches on a range of issues, including population growth, housing affordability and Australia's exposure to the Chinese economy.

  • Where Soul Patts is investing for long term growth and dividends

    Where Soul Patts is investing for long term growth and dividends

    · The Rules of Investing

    If you’re looking for the future blue chips of the ASX then Washington H Soul Pattinson might be worth a closer look. The company has been around for more than a century, has never missed a dividend payment but, for the most part, has flown under investor radars.

    That is starting to change following the tie up with Milton Corporation in 2021, which has helped to propel Soul Patts’s market cap over $12 bn and into the S&P/ASX 50. Soul Patts now sits alongside popular names including Mineral Resources, Car Group, ASX Ltd and Ramsay Healthcare.

    Blue chip stocks are known to be large, reliable, profitable and consistent dividend payers. Soul Patts ticks most of these boxes with the exception of size perhaps.

    The merger with Milton brought an experienced investment team led by CEO and CIO Brendan O’Dea, 30,000 new shareholders and a $3.7bn large cap portfolio.

    O’Dea is now the Chief Investment Officer at Soul Patts and says the merger gives Soul Patts the platform required to build the next generation of investments that will sustain Soul Patts enviable track record of shareholder returns.

    “There’s a real desire on our part to seed the strategic assets of the future and a lot of that is going to come out of that private portfolio.”

    In this episode of The Rules of Investing, Brendan O’Dea takes Livewire’s James Marlay on a tour of the Soul Patts investment portfolio covering their large cap, emerging and strategic equity portfolios.

    O’Dea also shares Soul Patts’ unique approach to capital allocation, the asset classes commanding their attention and why you should expect to see more big strategic investments in the years ahead.

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