The structural forces that saw growth investing rise to the top after the GFC remain. Covid created a blip, but the world is returning to slow growth, low inflation and lower interest rates. That's the perspective of Jason Orthman, the Deputy Chief Investment Officer of Brisbane-based Hyperion Asset Management.  Orthman says that neither you, me, nor our grandchildren are likely to experience an environment like 2022, where rapid interest rate hikes rocked long-duration assets such as government bonds and growth equities.  "2022 was an incredibly unusual period. We've looked at markets over the last 250 years, and you haven't seen interest rates at the long end move quickly to that level over 250 years of data. We believe it's a one-in-250-year event," says Orthman. Structural forces, including ageing populations and the rise of automation, will continue to create a disinflationary and low-growth world in the decades to come. This backdrop means that those rare companies that can grow at rates well ahead of GDP can provide investors with exceptional returns.  Orthman and the Hyperion team have a disciplined approach to finding these rare gems, starting with twelve structural growth trends, such as productivity, the shift towards artificial intelligence (AI), and banking and payments. These parts of the economy are likely to grow and present fertile ground for finding future blue-chip companies.  In this episode of the Rules of Investing, Ortham speaks with Livewire's James Marlay about Hyperion's approach to growth investing, the wild ride of 2022 and the long-term opportunities the firm has identified.  Orthman also shares what he describes as 'one of the most important investments' the firm has ever made, what investors are missing about the Tesla story and two companies he believes are poised for significant revenue growth over the next decade.

Each year, Barron's releases a list of Australia's Top 100 Financial Advisers. Pitcher Partners' Charlie Viola and Lipman and Burgon Partners' Paul Burgon have featured high on this list over the years, and both ranked in the top 10 in 2023. As part of Livewire's Outlook Series for 2024, Livewire's James Marlay hosted an in-depth panel discussion exploring how these two investing gurus are allocating capital on behalf of their clients in 2024. Whilst there is no 'one size fits all' when it comes to investing, there are nuggets of insight from this session that can help all investors. Click here to access the charts discussed in this episode and a summary of the discussion  Timecodes 0:00 - Introducing the experts 0:49 - Charlie Viola’s top three factors influencing asset allocation in 2024 3:20 - Paul Burgon’s top three factors influencing asset allocation in 2024 6:15 - Asset classes where Paul and Charlie are overweight or underweight 9:53 - Why Private Markets will play a bigger role in portfolios in 2024 and beyond 12:40 - Charlie Viola’s Asset Allocation framework for 2024 16:33 - Paul’s Strategic and Tactical Asset Allocation frameworks for 2024 22:26 - How these advisers are innovating in 2024 25:50 - Four investing traps to avoid in 2024

Two years ago, on a trip to Perth, Yarra Capita’s Dion Hershan was pitched the case for lithium stocks by his Uber driver. Hershan says it was a cliche moment and a classic example of a ‘ringing the bell’ sign. On the flip side, there are moments when deciding to invest causes your stomach to churn and your hands to quiver. “Some of the best ideas I’ve had in my career were when my stomach churned and my hands trembled when I put the trade on. That’s often a good lead indicator.” Recent investments in fallen angel ResMed (ASX: RMD) and an overweight position in the beaten down REITs sector are two examples Hershan provides of how Yarra is taking long-term counter-consensus thinking. This counter-consensus thinking also applies to the companies Hershan and his team are cautious about, which include large parts of the ASX20, including resources and banks. Hershan says that while these companies may not fall out of the top 20, their best days are likely behind them. In this episode of the Rules of Investing, Hershan talks about the lessons from working inside the most successful global hedge fund, why he is cautious about the outlook for blue chips and the companies he thinks represent the best long-term opportunities for the slow grind that lies ahead.   Timestamps 0:00 - Introduction 3:06 - How Dion caught the investing bug 4:40 - Lessons from working at Citadel 8:35 - Why macro matters for Australian equity investors 11:08 - The raging debate taking place at Yarra Capital 14:30 - How much pain will consumers feel in 2024 17:29 - Why you should be complacent about blue chip stocks 22:05 - The best opportunities Yarra is finding on the ASX 24:57 - A fallen angel that Yarra thinks can rebound 26:52 - The thesis for being overweight REITs 36:00 - What investors are getting wrong in markets today 37:15 - Lessons from an early win 38:32 - Two stocks Dion would be happy to back if the market shut for 5 years Related Articles   https://www.livewiremarkets.com/wires/five-themes-on-our-shopping-list    https://www.livewiremarkets.com/wires/avoiding-the-blue-chips-heading-for-small-cap-status

The penny has dropped and thanks to a three-letter word from the Federal Reserve's recent interest rate decision ("any"), small caps both in the US and in Australia have started to rocket out of a long slumber. For most of the last 18 months, small cap performance at an index level has been smashed thanks to the soaring cost of capital. But now that markets have called central banks' bluff, we're entering what Ben Griffiths of Eley Griffiths Group calls a "pause rally" - the kind of rally that has a lot of cash looking for a new home. "I'm not for a second suggesting that the lunatics are out of the asylum but there has been some stability and sentiment is such that you can sketch out a constructive path for equities. There's a buoyant time ahead for us," Griffiths said. Another worthwhile indicator of the return of risk is the IPO market - and as Griffiths knows all too well, the phone calls have dried up considerably. And while the phone is not ringing off the hook yet, he does see some signs that listing activity is itching for a rebound. "There were a number of IPOs that were slated for transacting and listing before Christmas that have now been pushed into March. These will be extra well sought after in March - or certainly pre-June 2024," he said.  In this, our second last episode of The Rules of Investing for 2023, James Marlay sits down with Griffiths for an extended conversation about the smaller end of the market. Hear about some of the companies that stood out from the recent AGM season, how Griffiths is investing in light of a "higher for longer" rate environment, and why he's dipping his toes into a well-known company that fell from darling to dog. Timecodes: 0:00 - Intro 1:15 - Three macro signals Ben pays attention to - and what these are saying about the markets 4:45 - Is risk back and is the "pause rally" underway? 8:44 - Was October 30th 2023 the day the market declared the war on inflation over? 10:16 - What are you hearing about the appetite for more ASX IPOs? 14:00 - What are the drivers of the divergence between large cap and small cap performance - and when will it turn? 18:00 - The ASX companies which stood out from the November AGM season - Breville Group (ASX: BRG), Boral (ASX: BLD), Ridley Corporation (ASX: RIC) 19:16 - Portfolio construction and stock picks for a "higher for longer" interest rate environment - Monadelphous (ASX: MND), ARB Corporation (ASX: ARB), Capricorn Metals (ASX: CMM), Genesis Minerals (ASX: GMD), Karoon Energy (ASX: KAR) 21:53 - Stocks where margins may have not bottomed out yet - Auckland International Airport (ASX: AIA) and Worley (ASX: WOR) 22:20 - Portfolio construction for the new Eley Griffiths Group mid-cap fund: Audinate (ASX: AD8), Temple and Webster (ASX: TPW), Codan (ASX: CDA) 23:06 - A closer look at Boral and the impact of new CEO Vik Bansal 26:05 - A closer look at one unloved area of the market: REITs 27:52 - Consumer finance stocks have been the subject of investor "angst": Judo Bank (ASX: JDO), Latitude Financial (ASX: LFS), Pepper Money (ASX: PPM), Liberty Financial (ASX: LFG) 29:12 - What would it take for you to turn more positive on these smashed sectors? 31:48 - Why Eley Griffiths Group is launching a new mid-cap fund now 34:34 - Some of the mid-cap fund's early core holdings: CAR Group (ASX: CAR), GQG Partners (ASX: GQG), Genesis Minerals, Boral, Auckland International Airport, Worley 35:37 - The Rules of Investing's three regular questions

Culture is not something that immediately springs to mind when assessing a company and its prospects for the future. More often than not, we investors are scouring profit and loss statements, comparing financial ratios and (if we have the time and skill) constructing valuation models. However, good culture is critical in a business; it takes a long time to build and is hard to maintain. And yet, it can take as little as one rogue employee to upset the delicate balance and ruin it completely. This is something that Qiao Ma, portfolio manager for the Munro Global Growth Small and Mid-Cap Fund, is intimately aware of. As Ma revealed, if she determines that the culture is wrong when conducting her due diligence of a company, despite everything else looking good, she is walking away. No 'ifs'. No 'buts'. She's not investing in that company.  "When it’s the wrong culture, it’s 100% of the [investment] decision," she said.  Culture is the ultimate forward-looking indicator of where a company is going. It does not matter, the past glory it was able to achieve. If you have the wrong culture, you have no space." In this episode of The Rules of Investing, Livewire's Chris Conway learns more about Ma’s investment philosophy, how it has developed over the years, and her outlook for growth investing – particularly in the small and mid-cap space. Ma also shares a handful of stocks she likes right now and the types of opportunities she is hunting for over the next 12 months.    Timecodes:  0:00 - Intro 0:47 - How Qiao Ma's investment philosophy has developed over time  3:33 - Value versus growth  3:58 - On working at Lehman Brothers during the GFC  5:57 - The best lessons from investment legend Peter Cooper: The importance of culture  9:13 - How much culture should play into investment decision-making  10:59 - Qiao's most memorable stock picks from her career 12:49 - The biggest surprises in markets from the last two years  14:38 - The outlook on growth for the next 12-24 months  17:57 - The major risks the Munro team is spending the most time debating 23:43 - The catalyst for small and mid caps to rebound  24:25 - A stock that can fund its own growth: JD Sports (LON: JD)  28:02 - Why earnings durability is so important  29:18 - A high-conviction stock pick for the year ahead: On Holding (NYSE: ONON) 30:31 - The Rules of Investing's 3 common questions  ____________________________________________________________ Disclaimer:   The information provided by Munro Partners is general information only and is not intended to include, or constitute as, financial product advice. The views held by Munro Partners are current at the time of recording and are subject to change. Every effort has been made to ensure that the material contained in this document is accurate at the time of publication. Market conditions may change which may impact the information contained in this document. This information has been prepared without taking account of the objectives, financial situation or needs of individuals. You should obtain independent advice from a licenced professional adviser before making any investment decision. Information about the Munro funds, including the product disclosure statements (PDS) for the Munro Funds is available at www.munropartners.com.au. Munro Partners is a corporate authorised representative of Munro Asset Management Limited, AFSL 480509.  

Qiao Ma has had an extensive career in funds management including stops in New York working for hedge fund Jericho Capital and more recently Cooper Investors in Melbourne.   Earlier this year, Qiao joined Munro Partners, where it was recently announced that she would be leading the Munro Partners Global Growth and Mid-Cap Fund.    On the upcoming episode of the Rules of Investing – Qiao shares what it was like starting her career during the GFC, why she likes the small and mid-cap space, as well as a few of her favourite stocks.    Here's a preview of what you can expect.

From geopolitics to fiscal policy, commodities to equities, this week's featured guest on The Rules of Investing has some high-conviction views on a whole range of subjects.  For more than 40 years, Donald Amstad traded his way through the highs and lows of financial markets. After completing his undergraduate studies at Oxford University, Amstad began his career at Japanese trading house Nomura. He went on to hold roles at JPMorgan, JPMorgan Asset Management, and the Bank of America before spending the last 15 years of his career at Aberdeen Standard (now, abrdn).  And although he may be a fixed income specialist by trade, you would be wise to listen to Amstad's interviews on many other subjects.  Long-time readers and viewers of Livewire may have already seen some of Amstad's thoughts on the markets. In 2019, Amstad was a participant in Livewire's Expert Insights series. One of his videos has garnered more than 800,000 views since it was first uploaded - the most of any Livewire video ever.  In the four years since that video was recorded, so much has changed in the world. Among them are the COVID-19 pandemic, the rapidly changing geopolitical situation to the slow (and ongoing death) of quantitative easing. But even as the world has changed, Amstad's core views on some of the most pressing challenges of our time have not. In fact, they have strengthened. This week, Livewire's Hans Lee sat down with Amstad for a half-hour conversation on the big picture issues that are driving markets - and the issues that are not driving markets (yet). This is a conversation you cannot afford to miss.  Note: This interview was conducted on Tuesday 7 November 2023. 

Despite all of his success, Morry Waked has remained relatively under the radar. He’s not one to boast of his achievements, and he’s very rarely fronted the media. At Livewire, we dedicate ourselves to finding the best fund managers in Australia - and in a testament to how underground Morry is, he hadn’t even popped up on our radar. Last week, however, Morry found himself thrust into the spotlight and was inducted into the Australian Fund Manager Hall of Fame - joining a now 22-name strong list of the country's most recognisable fund managers such as Kerr Neilson, Chris Cuffe, Anton Tagliaferro, Catherine Allfrey, Phil King and many more. What’s unique, is that all 21 other names on this list are fundamental investors. This is the first time that someone who employs a quantitative, or systematic approach to investing, as Morry describes it, has been added to the Hall of Fame. In this episode, Morry sits down with Livewire's Ally Selby for a look at his remarkable career, a deep dive into quantitative investing, as well as some of the insights that Morry's models have identified today.  Note: This interview was recorded on Thursday 26 October 2023.  https://www.livewiremarkets.com/wires/invest-in-what-you-know-avoid-what-you-don-t-lessons-from-a-hall-of-fame-fund-manager/  Timecodes:  0:00 - Intro  2:59 - Fate and purpose: How Morry fell into funds management 3:59 - On trying to educate investors on his quantitative/systematic strategy 5:45 - Morry's career journey  7:02 - The greatest lessons from Morry's career so far  8:50 - Markets and models change, but Morry's philosophy doesn't 10:35 - On using Artificial Intelligence in investing  11:16 - A beginner's guide to quantitative/systematic investing  12:58 - Common misconceptions  13:56 - The importance of remaining unemotional when investing  15:05 - Where we are in the cycle today  17:43 - Where Morry and the Vinva team see opportunity both locally and abroad  19:07 - Why these models give Vinva a leg up on the competition 22:17 - ROI's common questions: What the market is getting wrong and lessons from wins and losses from Morry's career

The times when a company is dominating headlines (for all the wrong reasons) are the best time to buy.  Take Medibank Private (ASX: MPL), for example, which you may remember, was embroiled in a data breach in October 2022.  On the news, the stock's share price plummeted more than 20%. And while it still hasn't retraced its steps to its prior glory, astute investors who picked up the private health insurance provider on the cheap would have since enjoyed a return of around 22%.  Today, there are two businesses on the ASX that are similarly making headlines: ResMed (ASX: RMD) and Qantas (ASX: QAN). And while one of these businesses is likely to continue to face headwinds going forward, the other could just be the "most outstanding buy idea on the ASX" today.  That's according to Airlie Funds Management's Emma Fisher, who believes if a company's balance sheet is intact, times of "maximum pain" are usually an investor's best indicator that a business is a buy.  In this episode, Livewire's Ally Selby learns where Emma is seeing the most value on the ASX today, why the data proves it pays to be bullish on the stock market over the long term, what separates the good investors from the great ones, as well as a deep dive on why the team is still buying CSL (ASX: CSL) despite downgrading the stock.  Plus, she also shares why she believes the market is focusing far too much on the macro, as well as the stock she would back if the market were to close for the next five years.  Note: This episode was recorded on Wednesday 27 September 2023.    Timecodes:  0:00 - Intro  1:26 - How Emma Fisher thinks about investing  4:06 - Why we need a reality check 6:45 - What keeps Emma Fisher inspired  9:42 - The biggest changes in the Airlie Australian Share Fund portfolio and key lessons from the past two years in markets  13:11 - Portfolio holdings that have been more resilient than expected: James Hardie (ASX: JHX)  14:20 - Why being bearish may sound smart, but being bullish makes money  17:01 - Times of maximum fear are the best times to make money: The Medibank (ASX: MPL) example  19:57 - Emma's analysis of Qantas (ASX: QAN) and ResMed (ASX: RMD) 27:07 - What separates the good investors from the exceptional ones - and it's not a high IQ 29:37 - The biases Emma has learnt to manage - and how you can too  32:03 - Where Emma is seeing the most value today 37:45 - Analysis of CSL and the Vifor acquisition  42:46 - One thing investors are getting wrong about markets  43:48 - A story of a big loss from Emma's career and what she learnt from it  46:12 - Why cashflow is paramount  46:35 - One stock that Emma would hold if the markets were to close for five years: ResMed (ASX: RMD)

Matthew Kidman is a well-known entity to readers of Livewire, as host of Success and More Interesting Stuff, Buy Hold Sell, and most recently, Livewire Live. Finally, we got him in the hot seat to run us through his own journey into funds management, his approach to investing, and the way he’s thinking about markets today. From hard truths on a squash court to starting his own shop, Centennial Asset Management, Matt’s story is one of happenstance. It’s also a story about the importance of mentors and networks. To steal a line from Top Gun, the list is long but distinguished. Geoff Wilson, John Sevior, Anton Tagliaferro and Peter Morgan, to name but a few. Their influence can be seen in the way Matt runs Centennial Asset Management and its Level 18 Fund. While it focuses on value and small caps, it’s got a highly flexible mandate that lets it ride momentum when the market is on, go short when it’s not, and preserve capital when crises hit.  We cover all these topics, and more, in this bumper episode. Note: this episode was recorded on September 20, 2023. Timestamps 0:00 - START 2:16 - Hard truths on a squash court 5:50 - Getting a start in journalism 6:30 - Landing book deals with Geoff Wilson 16:30 - 13 years at Wilson Asset Management 20:30 - Taking time off to do a PhD 22:30 - Mentors in finance 26:20 - Bottoms don't have to be V-shaped 29:50 - Key lead indicators 33:40 - From hard landing, to soft landing, to no landing 36:30 - China's in the hurt locker 41:00 - Buying growth 43:50 - Financials 45:30 - A flexible mandate 47:40 - Hiding in large caps 51:30 - Riding a market bounce with smalls 54:20 - Moving into quality 58:30 - Is lithium crowded? 01:01:27 - Watch rates 01:06:16 - Bottom drawer stock WANT ACCESS TO STOCK IDEAS? You told us you’re looking for an edge in investing. As the principal sponsor of Livewire Live 2023, Bell Direct is giving you exclusive access to 3 Bell Potter stock reports each week PLUS the chance win a share of 3 million Velocity Frequent Flyer Points. Get your reports and enter the Velocity competition now. Competition ends 31 October 2023. Entry conditions and eligibility criteria apply. NSW Authority No. TP/02866, SA Permit No. T23/123, ACT Permit No. TP 23/01592 Get my 3 Bell Potter stock reports now.

Short sellers have had a tough time of it over the past decade. The era of free money lifted all boats, including companies that would perhaps otherwise be candidates for short selling.  Today's market is radically different. Central banks have lifted rates in a desperate attempt to control inflation. Global equity markets have performed well, but much of that performance can be attributed to the tech titans of the Nasdaq.  Consumers have less money to spend, while costs are up and top line revenue is down.  This is fertile hunting ground for short sellers.  Short selling is risky, and beyond the capacity of most normal investors. But that doesn't mean that normal investors can't take on board short seller's methods and positions, and steer clear of certain companies accordingly.  I speak to a lot of hedge fund managers about their methods, however most aren't willing or able to expose their actual short positions.  Dr David Allen, who manages Plato's Global Alpha Fund, has no such qualms.  In this episode of The Rules of Investing, hosted by David Thornton, Allen explains his red flag system for identifying shorts and some of the companies it's identified. He also discusses his his long process, which draws on elements of growth, value and quality. And it wouldn't be an episode of ROI without Allen naming some of the companies he has conviction in right now.  Note: This episode was recorded on Tuesday September 19, 2023. Timestamps 0:00 - START 2:00 - Life as a professional athlete 3:20 - JP Morgan (and surviving the GFC) 8:00 - Combining growth, value and quality 16:00 - A red flag system for finding shorts 20:40 - The most common red flag in today's market 21:55 - Two high conviction shorts on the ASX 26:00 - Access to the C-suite isn't what it used to be 27:00 - Is Qantas (ASX: QAN) a bargain or value trap? 34:55 - Does nVidia deserve its valuation? 37:57 - You don't need to be concentrated to generate returns 39:17 - A humbling experience 43:30 - This drug will change the face of healthcare   WANT ACCESS TO STOCK IDEAS? You told us you’re looking for an edge in investing. As the principal sponsor of Livewire Live 2023, Bell Direct is giving you exclusive access to 3 Bell Potter stock reports each week PLUS the chance win a share of 3 million Velocity Frequent Flyer Points. Get your reports and enter the Velocity competition now. Competition ends 31 October 2023. Entry conditions and eligibility criteria apply. NSW Authority No. TP/02866, SA Permit No. T23/123, ACT Permit No. TP 23/01592 Get my 3 Bell Potter stock reports now.

We're constantly told that diversification is the only free lunch in finance. Yet most of the world's top investors choose not to eat it.  Warren Buffett, Charlie Munger, John Maynard Keynes, Lou Simpson, George Soros. All run concentrated portfolios. Today's guest on the Rules of Investing is similarly esteemed, with a similarly concentrated portfolio.  Claremont's Bob Desmond runs a portfolio of just 10-15 "quality growth" stocks. And many of the stocks he owned during the 'free money' period of high liquidity and high growth are the same stocks he owns today.  In today's episode, Bob explains why quality growth is the best strategy in all markets, why investors shouldn't react to "bear porn" headlines, why nVidia might not be overpriced despite its recent run, and the one stock he would love to own "forever".    Note: This episode was recorded on Monday September 11, 2023.     Timestamps 0:00 - START 1:46 - Surprises and uncertainty 2:46 - Is nVidia overvalued? 8:14 - Predicting the future is a mug's game 9:40 - Trouble at Apple 12:09 - Markets change, so pick companies that [mostly] stay the same 15:40 - Forever stocks 17:41 - High conviction bias 21:50 - When's the right time to sell? 26:50 - Don't get sucked in to "bear porn" headlines 28:30 - Do investors sell out of growth too soon? 34:10 - Sidestepping the GFC 35:30 - Quality is armageddon armour 41:01 - A bullet proof business model Want access to stock ideas? You told us you’re looking for an edge in investing. As the principal sponsor of Livewire Live 2023, Bell Direct is giving you exclusive access to 3 Bell Potter stock reports each week PLUS the chance win a share of 3 million Velocity Frequent Flyer Points. Get your reports and enter the Velocity competition now. Competition ends 31 October 2023. Entry conditions and eligibility criteria apply. NSW Authority No. TP/02866, SA Permit No. T23/123, ACT Permit No. TP 23/01592 Get my 3 Bell Potter stock reports now.

We're constantly told that diversification is the only free lunch in finance. Yet most of the world's top investors choose not to eat it. Warren Buffett, Charlie Munger, John Maynard Keynes, Lou Simpson, George Soros. All run concentrated portfolios. The guest on this week’s episode of the Rules of Investing is similarly esteemed, with a similarly concentrated portfolio.  Claremont Global's Bob Desmond runs a portfolio of just 10-15 "quality growth" stocks.   What's more of the stocks he owned during the 'free money' period of high liquidity and high growth are the same stocks he owns today. In today's episode, Bob explains why quality growth is the best strategy in all markets, why investors shouldn't react to the news cycle, why nVidia might not be overpriced despite its enormous run, and the one stock he would love to own "forever".    Here's a preview of what you can expect.

Ten years ago, investing was an easy game. Thanks to rates near zero and reckless fiscal spending, markets were drunk on liquidity. There was multiple expansion across the board, and winning was relatively easy. Pick an index, sit back and let multiple expansion take care of the rest. Today’s reality is far different. Volatility is high, correlations are weak, and the once reliable 60/40 portfolio is, well, not so reliable. In today’s episode of The Rules of Investing, I sit down with Frances Lim, Managing Director and Head of Asia Pacific Macro at KKR. Francis strikes a refreshingly positive tone on the market today, pointing out that wages, nominal GDP and earnings are all above trend. Frances gives us a full macro appraisal of US and Asian markets, the state of China, how she views investing in 2023, and where she’s finding value in the market.   Thanks again to Bell Direct for their support of this podcast. And remember, for a limited time, you can get 3 current Bell Potter stock reports each week. It’s the kind of exclusive research that can give investors an edge. So go to Bell Direct and look for the Livewire logo to get your Bell Potter stock reports now. Note: This interview was recorded on August 22, 2023. Timestamps 0:00 - START 1:50 - Soft landing? 4:20 - A great setup for companies 7:17 - The health of corporate America 10:17 - What's happening in China? 14:00 - China's trickle-down economics 19:00 - Correlations in trouble 23:10 - Time for a 40/30/30 portfolio 24:27 - The best risk-adjusted return 27:40 - Is passive investing enough? 29:40 - The role of thematic investing 31:30 - How active should active investors be? 32:40 - The best opportunities in Asia right now  

There are a select few stocks on the ASX that boast true market darling status. Whereas other stocks sell off at the hint of bad news, market darlings seem to emit an aura effect on markets that itself attracts investment. Biotech company CSL is arguably the Aussie market’s preeminent market darling, having returned 5,741% since inception. For a while, it seemed like CSL could do no wrong. But even royalty can be dethroned... Today’s guest is Ray David, Portfolio Manager and Partner at Blackwattle Investment Partners. Alongside Joseph Koh, Ray runs Blackwattle’s brand new Long-Short Quality Fund. Ray has a red flag system for identifying his short and underweight positions. He put CSL through the ringer, and as you’ll learn today, it spat out a sea of red flags. He also discusses the Ponzi scheme that sparked his interest in investment finance, why he’s bullish BHP irrespective of the commodity cycle, his overweight positions in industrials, and the media company with the best suite of assets on the ASX.      Thanks again to Bell Direct for their support of this podcast. And remember, for a limited time, you can get 3 current Bell Potter stock reports each week. It’s the kind of exclusive research that can give investors an edge. So go to Bell Direct and look for the Livewire logo to get your Bell Potter stock reports now. Note: this interview was recorded on August 15, 2023 Timstamps 0:00 - START 1:56 - A ponzi introduction to finance 5:30 - Lessons from the the Buy and Sell sides of the industry 10:00 - Have risk assets beaten central banks? 11:46 - The bear case for banks 14:00 - Defining 'quality' 18:00 - A new era for short selling 22:54 - Red flags for CSL 27:00 - Overweight industrials 29:10 - The best asset book on the ASX 30:26 - Reporting season buys 34:40 - Mining needs explosives 37:37 - Franchising done right    

Hello and welcome to the Rules of Investing, brought to you by Livewire Markets, I’m your host David Thornton. On the upcoming episode I sit down with Ray David, Portfolio Manager and Partner at Blackwattle Investment Partners. Alongside Joseph Koh, Ray runs Blackwattle’s brand new Long-Short Quality Fund. Ray has a red flag system for identifying his short and underweight positions. He put CSL through the ringer, and as you’ll learn, it spat out a sea of red flags. He also discusses the Ponzi scheme that sparked his interest in investment finance, why he’s bullish BHP irrespective of the commodity cycle, and the media company with the best suite of assets on the ASX.      Here’s a preview of what you can expect.  --- A quick note to our loyal listeners. This is the first episode in our long-standing series that has been supported by a trusted partner of Livewire, Bell Direct. Research shows that experienced investors are looking for an edge. As the first-ever sponsor of Livewire’s “Rules of Investing” podcast, Bell Direct is offering exclusive access to 3 current Bell Potter stock reports every week for a limited time. To claim, hit up belldirect.com.au and look for the Livewire logo.

Livewire Live is an investor event like no other where Australia’s most experienced investors will debate the critical topics in markets right now. It is set to be an unmissable event with an exceptional lineup of speakers and innovative formats. Tickets will sell out, secure your spot here.  Speakers We will be announcing additional speakers in the coming weeks. Robert Millner, Chairman, Washington H Soul Pattinson Bobby Yazdani, Founder & Partner, Cota Capital Andrew Clifford, Co-founder, Co-Chief Investment Officer & CEO, Platinum Asset Management Martin Conlon, Head of Australian Equities, Schroders Nick Griffin, Chief Investment Officer, Munro Partners Mark Landau, Joint Managing Director & Chief Investment Officer, L1 Capital Christopher Joye, Portfolio Manager & Chief Investment Officer, Coolabah Capital Matt Williams, Head of Australian Equities, Airlie Funds Management Mary Manning, Portfolio Manager, Alphinity Investment Management Phil King, Chief Investment Officer, Regal Funds Management Tim Carleton, Principal & Portfolio Manager, Auscap Asset Management Jacob Mitchell, Chief Investment Officer, Antipodes Partners David Allen, Head of Long Short Strategies, Plato Investment Management Casey McLean, Portfolio Manager, Fidelity International Andrew McKie, Portfolio Manager Elston Investment Management Alexandre Ventelon, Head of Research and Investment Strategy, Morgan Stanley Wealth Management Dania Zinurova - Portfolio Manager, Wilson Asset Management Marcus Burns - Portfolio Manager, Spheria Asset Management Diana Mousina - Senior Economist, AMP  

There is a good reason why Australia’s sovereign wealth fund, the Future Fund, maintains a 16% allocation to private equity. Returns, returns, returns. Private equity, and the lucrative returns it offers, has traditionally been the restricted domain of institutional investors and off limits to retail investors. Ellerston Capital's JAADE Private Assets Fund bucks that trend by offering retail investors exposure to unlisted Australian growth companies. Like private equity, JAADE’s managers act as a partner with the companies it invests in by holding a space on their respective boards. It’s a model that clearly works. As of June this year, the retail fund has returned 14.48% pa over three years and almost 18% per annum since inception. In today’s episode, Livewire's David Thornton sits down with Jayne Shaw, Investment Director at Ellerston Capital and analyst for the JAADE fund. Jayne didn’t take the typical road into funds management. Initially trained as a nurse, she went on to take a number of roles in leadership positions in healthcare organisations. This appropriately explains why Jayne looks after the healthcare allocation within the JAADE fund. She also explains why the “carpark indicator” is a great way to know when the deals are on in private equity.  Topics include: the evolution of private equity over the last few years, today’s deal flow, the first order principles that guide Jayne’s process; and the investment case for Mable and Prospection – two companies that are shaking things up in the healthcare space.  Timestamps 0:00 - START 2:30 - An uncommon journey 5:03 - Private equity has changed 10:17 - Dry powder 12:16 - Counting cars 14:00 - JAADE  16:00 - It all comes down to the people 19:58 - Hard conversations 21:30 - Earnings runway 22:25 - Mable 25:40 - Prospection 32:39 - Why healthcare companies are good investments 37:07 - Don't put too much weight in the past 42:00 - A company for the bottom drawer

If there is one request that we repeatedly receive from our audience, it’s that you want more content on the wonderful, often under-covered world of microcaps.  It makes cents (literally). These stocks usually fly under the radar of the masses, providing diligent investors with the opportunity to invest in mispriced stocks and generate capital growth over the long term.  However, investing in this area of the market comes with its risks. In 2022, the S&P/ASX Emerging Companies Index suffered a brutal blow (it fell 24%), with one Livewire contributor describing it as a "killing field". This year, however, the Index has lifted around 3%, but it hasn't been a tide that has lifted all boats.  So in today's episode, we're joined by microcap expert Jessica Farr-Jones, the portfolio manager of the Regal Emerging Companies Strategy*. She shares why she is feeling bullish about the opportunity in small and micro caps, some of the stocks that have her excited, as well as a deep dive into what small and microcap investors can expect this reporting season.  And yes, if the last name sounds familiar, she’s the daughter of Wallabies great Nick Farr-Jones, who now also works in funds management as a mining specialist. *Note: This strategy is only available to wholesale investors. However, around 25% of the Regal listed investment trust (ASX: RF1) is exposed to the Emerging Companies Strategy, which investors can access on the ASX. 

In the upcoming episode of The Rules of Investing, we're joined by microcap expert Jessica Farr-Jones, the portfolio manager of the Regal Emerging Companies Strategy*. She shares why she is feeling bullish about the opportunity in small and micro caps, some of the stocks that have her excited, as well as a deep dive into what small and microcap investors can expect this reporting season.  Here's a preview of what you can expect. 

Value investing is all about buying stocks that are trading below their intrinsic value.  In practical terms, that often involves investing in companies and sectors that have been shunned by the market due to particular macro headwinds.  "It should be no surprise as to where the pockets of opportunity are," says Tim Carleton, Auscap Asset Management CIO and today's guest on the Rules of Investing.  "They're in the more cyclical sectors that people are most concerned about from an earnings perspective." In today's interview with Livewire's David Thornton, Tim runs through two retail stocks in the Auscap Long Short Australian Equities Fund that fit this profile. I won't give them away, but one is the only stock on the ASX with a return on equity above 50%, while the other is a long-term compounder poised to take market share.  He also discusses why he's avoided the tech and energy sectors, what he expects from earnings season, why he doesn't put much weight in earnings beats and misses, and why lithium is a crowded trade (yet remains invested in it).  Note: This episode was recorded on July 26, 2023.  Timestamps 0:00 - START 1:30 - Have we avoided a hard landing? 3:30 - Australian base case 4:30 - Reporting season 10:00 - Stock prices follow earnings 12:30 - A checklist for finding value 14:20 - Consumer discretionary in 2023 17:55 - Two COVID beneficiaries primed for growth 20:50 - Avoiding tech and energy 23:00 - Lithium is crowded, but does that matter? 29:20 - Look past the market's time horizon 44:00 - Bottom drawer retail stock  

A year ago I sat down with Oscar Oberg, lead portfolio manager at Wilson Asset Management. His thesis then was that small caps were beaten down and due some mean reversion. Alas, small caps haven’t done much since then, with the Small Ords returning 3.91%. Yet Oscar’s thesis also remains unchanged.  In fact, it’s gotten stronger! Not only is he positioning for a rebound in smalls and microcaps, he’s doing it with overweight exposure to consumer discretionary, a sector that has been tarred and feathered by today’s macroeconomic landscape of high inflation and high rates. As Oscar puts it, “there’s no mean reversion without consumer discretionary.” In today’s episode, Oscar lays out this thesis and the companies that make it up.  He also discusses: the relationship between the tech rally and small caps; generating return with short-term tactical trades; and how he deals with low liquidity,  and the primed aged care stock under takeover.      Note: This episode was recorded on Tuesday July 20, 2023. Timestamps 0:00 - START 1:50 - When will small caps bottom? 4:30 - No small cap rally without consumer discretionary 6:30 - Profit taking 7:30 - Why large cap tech matters to small caps 10:14 - 30-40% rally is not out of the question 14:30 - Harvey Norman's (ASX: HVN) property backstop 16:00 - Wearing the volatility 17:00 - Industrials 20:20 - Going tactical 24:15 - Mermaid Marine 26:30 - Body language matters 27:30 - City Chic (ASX: CCX) was a mistake 29:20 - Managing liquidity in small caps 32:45 - Takeover target 34:50 - Balance sheets look good 36:55 - Going public too early 40:25 - The classifieds company for the bottom drawer

Hello and welcome to the rules of investing, brought to you by Livewire Markets. I’m your host David Thornton. A year ago I sat down with Oscar Oberg, lead portfolio manager at Wilson Asset Management. His thesis then was that small caps were beaten down and due some mean reversion.   Alas, small caps haven’t done much since then, with the Small Ords returning 3.91%. Yet Oscar’s thesis also remains unchanged. In fact, it’s gotten stronger! Not only is he positioning for a rebound in smalls and microcaps, he’s doing it with overweight exposure to consumer discretionary, a sector that has been tarred and feathered by today’s macroeconomic landscape of high inflation and high rates. As Oscar puts it, “there’s no mean reversion without consumer discretionary.” In the upcoming episode, Oscar lays out this thesis and the companies that make it up. He also discusses the relationship between the tech rally and small caps, generating return with short-term tactical trades, how he deals with low liquidity, and the primed aged care stock currently under takeover.   Here’s a taste of what you can expect.

Last month, Fidelity marked the 20 year anniversary of its Australian Equities Fund. The fund has consistently outperformed its benchmark, the ASX 200 Accumulation Index, netting over 11% per annum. Paul Taylor, Head of Investments at Fidelity International, has captained that ship from inception to now. The fund's generated 11% per annum over the two decades, through some of the worst crises markets have dealt with. The Global Financial Crisis, the European sovereign debt crisis, COVID-19, and the Russo-Ukrainian war. The list goes on. How's he done it? Well, he turns down the noise. When I speak to fund managers, I often get a general response about how to do that. Usually something about focusing on fundamentals.  In today’s episode of The Rules of Investing, Paul gives an actionable step by step process that all investors can follow to turn down that noise. He also goes deep explaining his process for finding what he terms the “holy grail” of investing – long-term compounders, identifies the market’s next buying window, the need to view stocks and their upside potential within the context of portfolio construction, and the next thing to break if rates keep rising.  And as a little kicker at the end, he provides a [hypothetical] 3-stock portfolio for the bottom drawer.  Note: This interview was recorded on July 11, 2023.  Timestamps 0:00 - START 2:00 - 20 years of volatile markets 4:00 - 4-step process for blocking out noise 8:00 - Making moves during the GFC 16:00 - Second order affects 18:50 - The next buying window 20:30 - Banks in the firing line 22:50 - Preserving capital 25:40 - Don't pick stocks in isolation 28:50 - Finding long-term compounders 32:50 - The secular tech rally 36:30 - Glass half full 39:40 - Buying WiseTech Global (ASX: WTC) early  42:50 - A 3-stock portfolio for the bottom drawer

The past two decades have seen a lot of crises that have affected financial markets. The Global Financial Crisis, the European sovereign debt crisis, COVID-19, and the Russo-Ukrainian war. The list goes on. Last month, Fidelity marked the 20 year anniversary of its Australian Equities Fund. The fund has consistently outperformed its benchmark, the S&P/ASX 200 Accumulation Index, netting over 11% per annum.    Paul Taylor, Head of Investments at Fidelity International, has captained that ship from inception to now. In tomorrow’s episode of The Rules of Investing, Paul explains his process for finding what he terms the “holy grail” of investing – long-term compounders. He also discusses the market’s next buying window, the need to view stocks and their upside potential within the context of portfolio construction, and the next thing to break if rates keep rising. Here’s a preview of what you can expect.

In sports, players deemed to be "all rounders" don't usually dominate headlines and highlight reels. Yet, over the course of their careers, their flexibility and consistent performance can prove invaluable.  The same can be said of investing. You have growth managers, value managers and everything in between. When market conditions are favourable, they're on. But when markets favour another style, they take a back seat. Sometimes for a decade or longer.  Today’s guest is Blake Henricks, portfolio manager at Firetrail Investments, a high conviction manager of Aussie and global equities. Firetrail live by the motto “every company has a price”. But don’t let that fool you into thinking they're are a value-only only manager. Theirs is a style agnostic approach, which gives them the flexibility to play at every point in the cycle. In today’s episode, Blake discusses Firetrail's approach to investing, the health of Aussie balance sheets, what we can expect from earnings season, what leads the market to misprice a stock (and some examples), and the implications for the resources sector of being in a buy versus build phase.   Note: This interview was recorded on June 27, 2023. Timestamps 0:00 - START 1:20 - Today's market 2:12 - Conflicting data points 3:20 - Earnings season will be tough, but not for every company 5:10 - Beachside mansions vs outback shacks 10:30 - Finding market misreads 12:15 - The benefits of being style-agnostic 16:30 - Jack of all trades, master of none? 18:30 - Firetrail's portfolio 22:30 - Is energy still the play? 23:40 - Buy vs build 30:00 - Don't board the AI hype train 33:00 - Clipped wings and big gains 36:00 - A franchise built for success

On the upcoming episode of the rules of investing, we speak to Blake Henricks from Firetrail Investments. Blake discusses the health of Aussie balance sheets, what we can expect from earnings season, some of the mispriced companies he’s found in today’s market, and the takeover action that’s about to envelope the energy sector.  Here’s a preview of what you can expect.

If you are feeling confused right now, you can rest easy knowing you are not alone.  Since the beginning of the year, investors have been bombarded with a cacophony of conflicting market commentary on where best to invest. The indicators themselves, such as the VIX Index, the Coppock Indicator, and various sentiment surveys, also seem to be pointing in opposing directions. For equities-focused fund managers, there’s plenty of opportunity hidden within the world’s major indices. For fixed income investors, there’s more opportunity than ever before in bonds. In the end, everyone is talking their own book. And who can blame them? How else are they meant to attract investors’ hard-earned cash? This week's guest is different. She’s completely independent and unrestricted by any investment management firm's mandate, compliance team, or asset class. She's nothing if not completely honest.  And let's face it. That's really what we all need right now.  Giselle Roux has 35 years of market experience. She’s worked for the likes of Merrill Lynch, Citigroup, JBWere and Escala Partners. However, since 2019, she’s been providing independent advice to a handful of advisory groups. In this podcast, Roux will be providing her unfettered opinion on markets, where there actually is true opportunity, as well as why she believes global growth looks challenged from here. Note: This podcast was recorded on Thursday 22 June 2023. Timestamps: 3:10 - Choose your information wisely 4:30 - Credit and liquidity is key 6:21 - Corporate finance is changing 9:30 - Explaining the charge in US tech 11:00 - The heavy burden of sovereign debt 13:30 - Stock market vs economy 15:30 - Future drivers of growth 19:30 - Finding 10% return 21:16 - Opportunities in smallcaps and midcaps 25:00 - Hold cash, but not for too long 27:50 - Is gold overrated? 30:00 - Don't put too much weight in history 32:50 - Cyber is here to stay

Since the beginning of the year, investors have been bombarded with a litany of conflicting market commentary on where best to invest. The indicators themselves also seem to be pointing in opposing directions. For equities focused fund managers, there’s plenty of opportunity hidden within the world’s major indices. For fixed income investors, there’s more opportunity than ever before in bonds. In the end, everyone is talking their own book. And who can blame them? How else are they meant to attract investors’ hard-earned cash. This week's guest is different. She’s completely independent and unrestricted by any investment management firm or asset class.Giselle Roux has 35 years of market experience. She’s worked for the likes of Merrill Lynch, Citigroup, JBWere and Escala Partners. Since 2019, she’s been providing independent advice to a handful of advisory groups. In tomorrow's podcast, Roux will be providing her unfettered opinion on markets, where she is seeing opportunity, as well as why she believes global growth looks challenged from here. Here's a preview of what you can expect. 

Dividend-paying equities have long formed the backbone of retirees’ portfolios. And the historic stalwarts of these portfolios are well known. BHP, Telstra, and Commonwealth Bank, to name a few. You might be mistaken for thinking that equity income portfolios are therefore set and forget propositions, made up of a limited number of dividend darlings that will pay out into perpetuity. But you’d be wrong on both accounts, according to today’s guest. Dr Don Hamson  is the founder and managing director of Plato Investment Management. Plato manages $11 billion in assets across three funds – an Aussie equities income fund, a global equities income fund, and a global alpha fund. Managing $11 billion in total. Before that, he was responsible for over $10B in active and enhanced equity investments at State Street Global Advisors. In today’s interview [in the upcoming interview], Don explains why dividend-paying equities are still the best place to generate income, what makes a dividend sustainable, how to identify dividend traps, and which sectors and stocks have the brightest dividend outlook. He also names the dividend darlings that no longer deserve the title! Timestamps 0:00 - START 1:45 - Dividends hold up amid inflation and rate hikes 4:15 - Dividends remain the income backbone 6:00 - The importance of franking credits 9:17 - Dividends vs the bond market 10:47 - Capital vs income 11:45 - Drawdown and sequencing risks 14:13 - Finding dividend growers 16:30 - Dividend traps 24:03 - Buying cheap stocks in hope of a dividend 26:00 - Red flags 31:40 - What makes a dividend "sustainable"? 38:00 - The best (and worst) looking sectors 41:23 - Invest with a short time horizon 43:00 - No free lunch for less than 20 stocks 50:30 - It's not all doom and gloom 58:00 - Don's bottom drawer investment

Dividend-paying equities have long formed the backbone of retirees’ portfolios. And the historic stalwarts of these portfolios are well known. BHP, Telstra, and Commonwealth Bank, to name a few. You might be mistaken for thinking that equity income portfolios are therefore set and forget propositions, made up of a limited number of dividend darlings that will pay out into perpetuity. But you’d be wrong on both accounts, according to the upcoming guest. Dr Don Hamson is the founder and managing director of Plato Investment Management. Don explains why dividend-paying equities are still the best place to generate income, what makes a dividend sustainable, how to identify dividend traps, and which sectors and stocks have the brightest dividend outlook. He also names the dividend darlings that no longer deserve the title!

Few of us would’ve predicted that by June the S&P would not only be positive, but up over 11%. On face value, a healthy market. But dig a little deeper, and it quickly becomes apparent that this performance has been carried by the big mega-cap tech stocks. Such is their performance, and the lack of performance by the rest of the index, that Apple, Microsoft, Alphabet and Nvidia now account for a third of the S&P500. This all begs the question: what next? Do these mega cap stocks sell off, does the rest of the market trade up, or will it be a bit of both? If it’s the former, which companies will take the reigns? These questions, and more, are answered by today’s guest – Jacob Mitchell, founder, CIO and lead Portfolio Manager at Antipodes Partners. Antipodes houses two global funds, an emerging markets fund, and an actively traded global shares ETF (ASX: AGX1).  Before starting Antipodes, Jacob spent 14 years at Platinum Asset Management, where, as the co-CIO and lead portfolio manager of the Platinum International Fund, he oversaw $3.5 billion in assets under management. Jacob goes to town on a lot of subjects, including: his bear case for consumer-facing mega cap tech; whether the AI boom is in fact a bubble; where he’s seeing low multiples despite strong earnings growth; and the stocks that will lead the the next cycle. Note: This episode was recorded on Wednesday, June 5 2023 Timestamps 2:30 - Megacaps have dominated. What's next? 5:30 - Is AI a bubble? 9:10 - Slowing in the West, reopening in the East 12:00 - Market valuations and fundamentals don't line up 15:30 - Eyes on smaller companies bridging the gap 20:10 - Primed sectors 22:50 - Holding the line 27:20 - Liquidity is draining 30:20 - The secular winners of tomorrow 34:45 - Retail investors are sceptical of the energy transition 41:00 - Investment case for fossil fuels 44:00 - Hedging risk in today's market 48:00 - High conviction stocks

Few of us would’ve predicted that by June the S&P would not only be positive, but up over 11%. On face value, a healthy market. But dig a little deeper, and it quickly becomes apparent that this performance has been carried by the big mega-cap tech stocks. Such is their performance, and the lack of performance by the rest of the index, that Apple, Microsoft, Alphabet and Nvidia now account for a third of the S&P500. This all begs the question: what next? Do these mega cap stocks sell off, does the rest of the market trade up, or will it be a bit of both? If it’s the former, which companies will take the reigns? These questions, and more, are answered by Friday's guest – Jacob Mitchell, founder, CIO and lead Portfolio Manager at Antipodes Partners. Jacob goes to town on a lot of subjects, including: his bear case for consumer-facing mega cap tech; whether the AI boom is in fact a bubble; where he’s seeing low multiples despite strong earnings growth; and the stocks that will lead the the next cycle. Here's a preview of what you can expect. 

Fixed income has always served a defensive role within investor portfolios. Normally, when growth is down and risk assets underperform, fixed income outperforms. That’s under normal circumstances, though. In 2022, the Bloomberg aggregate bond index lost 13%. Why? Introduce inflation, and the higher rates employed to combat it. When this happens, risk assets and fixed income fall in lockstep. But those dark days seem to be behind us. We’re now at or near the peak in interest rates. So with bond yields set to stabilise and fall, the value of fixed income assets look poised to rebound. Today’s guest on The Rules of Investing is Jay Sivapalan - Head of Australian Fixed Interest at Janus Henderson Investors. Jay manages Janus Henderson’s Aussie fixed income portfolios, and holds ultimate responsibility for formulating interest rate and sector strategies. We discuss: The macro backdrop that’s shaping fixed income The best times to buy fixed income, and how; and where Jay sees the best risk-reward right now.  Transcript 2:10 - Where are we in the cycle? 5:50 - How will fixed income respond during a recession? 19:10 - The best risk adjusted return right now 12:40 - Chasing yield has a time and place 14:00 - Why fixed income over term deposits? 15:10 - The dangers of passive management 17:25 - Qantas (ASX: QAN) still has wings 18:40 - A contrarian call on commercial real estate 21:00 - Semis vs treasuries 22:15 - Don't fall for the consensus view  28:06 - A fixed-income security for the bottom drawer

Earlier this month, the Reserve Bank of Australia was forced to cough up internal documents under Freedom of Information laws. This included an internal modelling exercise from September 2022, which revealed the risk of an Australian recession could be as high as 80% by September 2024. Meanwhile, a recent Bloomberg survey of 14 economists saw the probability of a recession in Australia climb from 35% to 38% in April.  Investors themselves, through their positioning, seem to be suggesting the same. Shares in classic defensive names such as Transurban (up 14%), Woolworths (up 15%), Wesfarmers (up 9%), Coles (up 15%), Telstra (up 10%), Origin Energy (up 9%) and AGL (up 11%) have continued to tick higher since the beginning of the year.  And yet, Tribeca Investment Partners' Jun Bei Liu is unflinchingly bullish. She doesn't believe the Australian economy will nosedive into a hard landing in the next few months or years. Instead, she argues the noise in markets has created extraordinary investment opportunities today.  In this episode, Liu shares:  Three rules for investors to live by.  Her macro outlook for the years ahead.  Why there is still fuel left in the tank when it comes to the China reopening.  Her top long and short positions right now.  Note: This episode was recorded on Wednesday, May 24, 2023 Timestamps  0:00 - Intro  1:25 - Three rules investors should live by 4:58 - Jun Bei's North Star for volatile markets  7:34 - Jun Bei's base case: Why she doesn't believe Australia will experience a recession  12:38 - The China re-opening theme isn't over yet (and the stocks' Jun Bei is backing) 19:53 - Jun Bei's earnings outlook for the ASX  21:55 - Companies facing margin pressure over the months ahead  23:11 - Why Jun Bei is shorting Super Retail Group (ASX: SUL) 26:20 - And why she's backing A2 Milk (ASX: A2M), NEXTDC (ASX: NXT), Macquarie Group (ASX: MQG), REA Group (ASX: REA), Xero (ASX: XRO), TechnologyOne (ASX: TNE), Pilbara Minerals (ASX: PLS) and Treasury Wine Estates (ASX: TWE).  28:55 - The unloved stocks Jun Bei is loving right now 32:26 - The importance of emotional intelligence when it comes to investing  36:49 - The best CEO and management teams in Australia  39:30 - The Rules of Investing's three favourite questions (what investors are getting wrong, a big win and loss, and a stock Jun Bei would back for the next 5 years)

In this week’s episode of the Rules of investing, we’re joined by Jun Bei Liu from Tribeca Investment Partners. Jun Bei uses a blend of a fundamental and quantitative investment process to identify long-term opportunities. But she also has a secret weapon in her back pocket. By short selling stocks with weaker investment characteristics and reinvesting the proceeds in preferred long plays, the fund has been able to beat its benchmark not only over the past year, but every year since its inception. Jun Bei will share her North Star for navigating volatile markets, her outlook on Aussie equity earnings, as well as some of her favourite stocks on both the long and short sides today. Here's a preview of what you can expect.  

Investing hasn’t been easy these past few years amid a pandemic, soaring inflation and monetary tightening. The ASX200 did 1.4% in 2020, 17% in 2021 and then -1% last year. Hugely volatile.  But it's in times like this when the cream rises to the top. As most fund managers struggle to match the benchmark, Datt Capital’s Absolute Return fund has returned an enormous 25% per annum over the last three years. It's a staggering performance that most fund managers would give their left arm to get. In this week's episode of The Rules of Investing, Livewire's David Thornton speaks to Emanuel Datt, founder of Datt Capital. Datt’s modest demeanour belies the rockstar performance he’s generated. Not one to rest on his laurels, though, he’s about to launch a new small-cap fund that seeks to outperform the Small Ordinaries Index by 5% per annum. While the fund may be new, Datt's experience with small cap stocks certainly isn't - he bought market darling Afterpay at $6, long before it became Australia's largest ever takeover at a cool $39 billion.  Datt discusses: the processes and investments that netted the absolute fund such stellar numbers; how he found Afterpay; why he believes now is the time to get into small caps; and the investment opportunity he sees in rare earths.  Note: this episode was recorded on Tuesday May 16, 2023 Timestamps 1:50 - The man behind Datt Capital 3:20 - Opening up shop 4:30 - Achieving 25% p.a. 7:30 - Rare earths 12:00 - The opportunity in small caps 19:00 - The sectors leading small caps 21:00 - Spotting Afterpay 24:00 - Red flags 27:00 - Finding sustainable companies 30:10 - Inflation can't be understated 31:20 - Winning big with Adriatic Metals (ASX: ADT)

Investing hasn’t been easy these past few years. The S&P/ASX200 did 1.4% in 2020, 17% in 2021 and then -1% last year. Huge volatility. As most fund managers struggle to match the benchmark, Datt Capital’s absolute return fund has generated an enormous 25% per annum over the last three years. Staggering performance that most fund managers would give their left arm to get.     This week’s guest on The Rules of Investing is Datt Capital’s founder, Emanual Datt. Datt’s modest demeanour belies the rockstar performance he’s generated. Not one to rest on his laurels, he’s about to launch a new small cap fund that seeks to outperform the Small Ordinaries Index by 5% per annum. In the upcoming episode, we discuss: the processes and investments that netted the absolute fund such stellar numbers why he believes now is the time to get into small caps, and the investment opportunity in rare earths. Here's a preview of what you can expect. 

In the world of investing, listed markets dominate the airwaves due to their ease of access, broker coverage and liquidity. For that reason, unlisted shares can often take a back seat. But companies aren’t born on the listed markets. Many of the best opportunities exist in the unlisted, pre-IPO space. Today’s guest is Dane Roberts – a portfolio manager at Fifth Estate Asset Management. Fifth Estate invest in pre-IPO, IPO, unlisted and listed microcap and small cap companies. Its first fund was launched in 2021, delivering 13.29% since then – impressive considering the extreme volatility of that period. That fund’s closed to new investment, but they’re about launch their second fund with much the same strategy. In today’s episode, we discuss what it takes to invest in unlisted companies, how they compare to their listed peers, the outlook for unlisted stocks, and why now could be the perfect time to invest at the pre-IPO stage.  Note: This interview was recorded on Friday May 5, 2023.  Timestamps 1:49 - Birds-eye view of pre-IPO and IPO 4:00 - Liquidity in unlisted markets 6:00 - Debt vs equity 10:30 - The perfect time to put money to work 12:45 - Finding and filtering unlisted companies 15:30 - How unlisted assets are priced 18:40 - When should a company list? 22:20 - A company storming towards IPO 27:20 - Fund 2 30:24 - In it for the long haul 33:00 - Monetary policy on the street 35:40 - The comeback kid (ASX: NXT) 38:45 - An infrastructure company surrounded by moats

When volatility rattles markets, micro caps and small caps typically suffer the biggest drawdowns. But markets have a reliable habit of reverting to the mean sooner or later. That’s very good news if you’re investing in small caps, arguably, now! This week’s guest is Matthew Booker, portfolio manager and co-founder at Spheria Asset Management. Matt’s managed small company portfolios for over 15 years, consistently outperforming the index. The Spheria Australian Microcap Fund has outperformed the S&P/ASX Small Ordinaries Accumulation Index by over 7% per annum since inception, while the Smaller Companies fund has outperformed that same index by over 3% per annum. Just as importantly, they’ve managed to preserve capital and outperform the benchmark through the volatility of the past year. And he's done it without lithium stocks! We discuss: where we are in the small cap cycle; the opportunities Spheria are targeting; capital preservation; and the former market darling that’s back in business.  Timestamps 1:50 - Where we are in the small cap cycle 3:30 - Lessons from the past year 5:30 - Preserving capital 6:50 - Outperforming without lithium 10:00 - The best is ahead for small caps and microcaps 11:00 - Filtering down an enormous universe of stocks 12:40 - "Inverse broker" indicator 14:00 - Investing in "legitimate growth" 16:55 - Red flags 21:20 - Takeovers 23:00 - Outlook for M&A 28:00 - Return of an unloved market darling? 35:30 - A bottom-drawer stock (from New Zealand) Note: This interview was recorded on Wednesday April 19, 2023. 

When volatility rattles markets, microcaps and small caps typically suffer the biggest drawdowns. But markets have a reliable habit of reverting to the mean sooner or later. That’s very good news if you’re investing in small caps, arguably, now! This week’s guest is Matthew Booker, portfolio manager at Spheria Asset Management. Matt’s managed small company portfolios for over 15 years, consistently outperforming the index. In the upcoming episode, we discuss: Where we are in the small cap cycle; the opportunities Spheria are targeting; capital preservation; and the former market darling that’s back in business. Here’s a preview of what you can expect.

Some fund managers don't freely disclose how they go about business, for fear of losing a competitive edge (or maybe letting on that they don't have any edge at all).  Then there's the other school of thought - tell investors how you operate, what you're thinking, and forge ahead as a thought leader. Then, if you're worth your salt, investors pick up what you're putting down and entrust you to manage their capital.  Today's guest on The Rules of Investing occupies the extreme latter end of that spectrum. James Gerrish  is the 9th most followed contributor on Livewire. Subscribers might know him best as author of the daily match out report, but that’s certainly not the only hat he wears. He’s also on the tools – running money at Market Matters across portfolios specialising in growth, income, international equities, emerging companies, and global macro. We discuss: the benefit of holding short-term views when long-term investing; the market signals that matter most the sectors with the best risk adjusted return and the one thing investors should fear Note: This episode was recorded on Wednesday December 12, 2023.  Timestamps 1:20 - Managing short-term views with long-term investing 4:30 - Short-term noise 8:50 - Banking crisis and deposit flight 10:40 - The most important signals across sectors and asset classes 15:30 - Are bond yields too high? 19:40 - Investing is a game of inches, not yards 23:50 - How important is the index? 25:00 - Risk across today's sectors 28:00 - The best risk-adjusted return 33:00 - Know your risk, and invest accordingly 35:40 - Discounting macro is a cop out 42:00 - The thing that should frighten all investors 45:50 - Look for companies with warts 48:00 - The market's getting ahead of itself 49:00 - Biggest career win and loss 52:00 - A company for all seasons

We all know the stats. Over the long term, the majority of active investment managers will underperform their benchmarks.  According to SPIVA data, more than 78% of funds underperformed the S&P/ASX 200 over the past decade, while more than 91% of funds underperformed the S&P 500 over the same time period. These rates improve significantly over shorter time horizons, with 42% of Aussie managers outperforming their benchmark over a one-year period, and 49% of US-based managers doing the same.  Given the volatility of today's market, and his own findings from more than 15 years specialising in asset allocation in global and Australian markets, Morgan Stanley Wealth Management's Head of Research and Investment Strategy Alexandre Ventelon believes investors should remain conservatively positioned.  This means a greater emphasis on (and portfolio allocation to) fixed income markets, but also, a greater reliance on passive products - like index-tracking exchange-traded funds (ETFs) - as we continue to navigate this short-term volatility. And right now, Morgan Stanley's model portfolios are heavily skewed towards passive products.  "With a short timeline, the best way to get there is with a passive instrument," Ventelon explains.  "The managers that have outperformed their markets on a one-year basis are often very different from one year to the other, and that's the issue. If you want to go with a tactical trade and you just choose one manager, based on how they performed last year, the odds will be against you."  In this special Listed Series special of The Rules of Investing podcast, Livewire's Ally Selby learns which asset exposures are best played with passive products in today's market, the circumstances in which passive and active products should not be used, as well as Morgan Stanley's outlook on the ETF market over the next decade.   Ventelon also shares why Morgan Stanley still remains bullish on the outlook for bonds. Plus, for a little bit of fun, we asked him to build a portfolio of listed products for the market today, while only picking one ETF from each asset class.  Timestamps 2:12 - How efficient the market is today  5:37 - How passive funds have changed the world of investing  8:12 - Are passive or active products better suited to today's market  13:22 - The instances where passive products should not be used in portfolios  18:17 - The instances where active products should not be used in portfolios  24:42 - Criticisms of passive products - do they hold any weight?  28:20 - What the market will look like in 10 years’ time 33:53 - Why Morgan Stanley is bullish on bonds (and why he is using VGB, VIF and VACF to play it)  38:45 - Ventelon's top ETFs for today's market (A200, WVOL, QUAL, VGB and VIF) 

Events of the past few weeks have cast doubt over the stability of the financial system. First Silicon Valley Bank and its troubled regional banking peers, then Credit Suisse. In typical fashion, the US Federal Reserve has stepped in to backstop the sector. In the case of Credit Suisse, UBS scooped it up for cents on the dollar.  These events have changed the way corporations perceive risk, according to this week's guest on the The Rules of Investing John Ayoub, Portfolio Manager for the Wilson Asset Management's Leaders Fund (ASX: WLE).  How does this play out for investors? Equity markets remain investable, according to Ayoub, but to do it right takes an approach that factors in the macro and micro.  Which is good, because that's exactly the approach taken by the WAM Leaders Fund, which was launched by Ayoub and colleague Matthew Haupt.  In today’s episode, we discuss:  the global banking crisis, and how this risk affects the Australian market; the political risk investors are underestimating; the way WAM use macro, micro and catalysts to find their winners; and we also touch on what defensive quality means, and why it’s the play in the current market. Ayoub colours the conversation with a tonne of stocks, so there's sure to be something in here for everyone.  Note: This episode was recorded on March 21, 2023.    Timestamps 1:30 - Global banking crisis 3:20 - Moral hazard in equity markets 6:50 - Where do bank deposits go? 10:15 - The hole left by Credit Suisse 11:20 - Political risk is exploding 15:00 - Doubling down after big hits 17:00 - The companies that make it into WAM Leaders  22:45 - Finding opportunities in beaten-down sectors 25:30 - Spotting inflexion points in markets 30:00 - Hunting for defensive quality 34:00 - A big win and a big loss 36:30 - The death of the office is overblown

Events of the past few weeks have cast doubt over the stability of the financial system. First Silicon Valley Bank and its troubled regional banking peers, then Credit Suisse. In typical fashion, the US Federal Reserve has stepped in to backstop the sector.  These events have changed the way corporations perceive risk, according to this week's guest on the The Rules of Investing John Ayoub, Portfolio Manager for the Wilson Asset Management's Leaders Fund (ASX: WLE).  In the upcoming episode, we discuss:  the global banking crisis, and how this risk affects the Australian market; the political risk investors are underestimating; the way WAM use macro, micro and catalysts to find their winners; and we also touch on what defensive quality means, and why it’s the play in the current market. Ayoub colours the conversation with a tonne of stocks, so there's sure to be something in here for everyone.   

On this week's episode of The Rules of Investing, Livewire's David Thornton sits down with Alan Kohler AM, one of the country's preeminent business journalists.  Alan first cut his teeth in 1969 as a cadet at The Australian. From 1985 and 1988 he served as editor of the Australian Financial Review, and was editor of The Age from 1992-1995. In 2007, together with Robert Gottliebsen and Stephen Bartholomeusz, Alan founded Australian Independent Business Media, publisher of Business Spectator and Eureka Report. In 2016, after selling the business to News Corp, Alan founded The Constant Investor, which was sold on to Investsmart.  In a case of full circle, Alan now once again writes for the Eureka report. He also pens a regular column for The New Daily, hosts The Money Café (with Alan Kohler), and you’ll still find him in your living room reading the finance on the ABC.  In today’s episode, Alan why the RBA has become too hawkish (and the consequences of it being so), the overhaul needed at the Reserve Bank of Australia (RBA), and his views on funds management. Note: This episode was recorded on March 7, 2023.    Timestamps 2:34 - It's all in the hands of the RBA 5:00 - Elevated inflation isn't ideal, but it's ok 5:30 - All roads lead to the inflation target 8:30 - Renovating the central bank 12:20 - What is guidance, anyway? 15:30 - Should Parliament carry its weight? 19:30 - What is priced into equity markets? 21:35 - What to look for in an actively managed fund 23:35 - What is a reasonable net return from a balanced fund? 24:50 - The role of ETFs in the portfolio

On this week's episode of The Rules of Investing, Livewire's David Thornton sits down with Alan Kohler AM, one of the country's preeminent business journalists.  In the upcoming episode, we discuss the one thing that will tip markets into recession (or won't), the overhaul needed at the Reserve Bank of Australia (RBA), and his views on funds management. 

The Smorgon family is one of Australia’s great wealth building stories. The family emigrated from Ukraine in 1927, opening a Kosher Butcher shop in Carlton soon after. Through the 1930s, the family expanded into wholesale meat and canning industries and, by the time the decade was up, were exporting meat and canned fruit goods to the United Kingdom. Victor Smorgon AC and the family established Smorgon Consolidated Industries in 1942, and this is when things really started to take off. In the 50s, the family added paper and packaging businesses to their repertoire, while the 80s saw the addition of a glass and plastic packaging company. But it was the Steel industry where the Smorgon family displayed its appetite and aptitude for disruption, with Smorgon Steel going on to become the country’s largest vertically integrated producer of steel and steel products. In 1995, with a heavy heart, Victor and the family divested Smorgon Consolidated Industries. In its place came Victor Smorgon Group, which is today one of Australia's premier family offices.  In today's episode of The Rules of Investing, Livewire's David Thornton sits down with Peter Edwards – the late Victor’s grandson and CEO of Victor Smorgon Group.   We discuss: The Smorgon family’s flair for disruption The way a family office invests, and The multi strat fund that has recently opened its doors to outside money.   

Today’s guest on The Rules of Investing will be very familiar to subscribers of Livewire.  Christopher Joye co-founded Coolabah Capital in 2011, and it's since grown to house about $7 billion in funds under management. Coolabah is a leading active credit alpha manager, with 28 portfolios across institutional and retail mandates.  Chris has storied history analysing Australia’s property market. In 2008, when the world was in the throes of the GFC, the Australian Government ploughed $15 billion into a policy proposal developed by Chris to provide liquidity to the Australian residential mortgage backed securities market. He also founded research and investment group Rismark International. While there, he designed Australia’s first “quality-controlled” house price indices, the IP for which is used to this day by Corelogic. In today’s episode, we dive into the RBA’s latest rate decision, the dire outlook for Australia’s housing market, and how Coolabah generate returns by exploiting mispricing in the bond and cash markets. Along the way, you'll get a front row seat into the inner workings of an active bond fund.  Chris also spins a yarn about the time he challenged GMO's Jeremy Grantham to put his money where his mouth is.  Timestamps 2:30 - The RBA hikes rates to a 10 year high 6:00 - Pain on the way for the Aussie household 10:00 - A problem in the RBA's models 12:50 - Housing to fall by 30% 18:55 - Maintaining central bank credibility 22:00 - Zombie haunt the ASX 26:00 - Wait for the risk-free rate to do its work 27:26 - Challenging GMOs Jeremy Grantham 38:30 - How to short the housing market 31:30 - Hunting for mispriced bonds 38:00 - The inefficiency of the over-the-counter bond market 41:20 - How Coolabah builds its portfolios 46:00 - Navigating 2022 48:00 - Choose your hedges wisely 57:00 - How the NSW Government becomes a hedge fund 59:30 - The best value in bond and cash markets Note: this episode was recorded on February 8, 2023.   

If there's one group of people who cop a lot of flak in financial markets, it's central bankers. Whether you believe they get too much or too little of it, they're the ones who print the money and make decisions that influence the wallets of billions of people. That was particularly true in 2022, as many on the economic spectrum were caught unawares by the surge in inflation (and its persistence thereafter). And depending on which central bank you most closely watch, they may also provide intentionally vague answers - or at least, avoid giving the direct and certain feedback you desire.  A beautiful example of this stems from Federal Reserve Chairman Jerome Powell. In his post-decision press conference last week, Powell argued "certainty is not appropriate". In layman terms, he's simply saying that singular data prints are not Gospel, even if financial markets may see otherwise. Now, at this most crucial time in financial markets, EFG Bank Chief Economist Stefan Gerlach has granted us an exclusive interview about the state of the global economy and what central banks are doing as a result.  Gerlach was the Deputy Governor of the Central Bank of Ireland between 2011 and 2015. As part of this role, he also sat in on the meetings of the European Central Bank under its former President Mario Draghi.  You can read an edited summary below:  https://www.livewiremarkets.com/wires/why-this-ex-central-banker-fears-a-second-and-even-bigger-mistake    Timecodes:  1:00 - Why were central bankers caught so off guard by the inflation surge? 3:38 - Could central bankers have better forecast this mess? 4:51 - Did central banks react quickly and forcefully enough to avert a recession? 7:29 - Would you have handled things differently if you were still in your old role? 8:08 - What is the risk central banks will make a second big mistake? 11:17 - What advice would you give investors who want to understand central bank messaging better? 16:46 - Will the Eurozone avoid a deep recession? 18:42 - Will China’s reopening save Australia from the global recession? 20:12 - How has your asset allocation strategy changed? 23:47 - What’s one macro theme investors are not talking about enough?

We’ve got a slightly different episode for you today on The Rules of Investing. A departure from the norm! A lot has been said about the change from growth investing to value investing. This shift has been easy to see in aggregate. In 2022, the MSCI world growth index was down 29.05%, compared to just -6.5% for the MSCI Value index. But indices are just that - aggregates. They do little to explain the why behind the what.  Why has this shift occurred? What signals should investors watch? How should we interpret these signals? And what traps lie in weight to catch out investors? In short - how does the stock market actually work? To answer these questions and more, we're joined by Dr Philipp Hofflin, Portfolio Manager on the Australian Equity Team at Lazard Asset Management. Phil's an expert in market bubbles - how they grow and, importantly, how they burst. So he's the perfect guest to break it all down.  (He also happened to be the most popular ROI guest in 2022).   Note: This episode was recorded on Monday January 30, 2023.  Timestamps 3:20 – “The central bank always wins” 5:15 – The most striking US market change since last September 8:00 – Why 2023 will be a tough year, but less so for Australia 10:30 – Recessions are almost always unexpected – and what this means for investors 11:00 ­– Will the Fed’s slowing of rate hikes flow onto RBA 14:00 – The normalisation of equity valuations is only halfway through 17:00 – 80% of market volatility is driven by noise – only 20% by fundamentals 28:30 – The surprising reason Value always beats Growth 36:00 – Why migrations are so important for Value portfolios 39:00 – How Lazard ascribes value to companies 42:00 – A case study of James Hardie (ASX: JHX)  

We’ve got a bit of a different episode for you today, which I think you’ll enjoy. A lot has been said about the change from growth investing to value investing.   This shift has been easy to see in aggregate. In 2022, the MSCI world growth index was down 29.05%, compared to just -6.5% for the MSCI Value index.   But why has this shift occurred?  What signals are investors watching. How should we interpret these signals, and what traps lie in weight to catch out investors? To answer these questions and more, I’m joined by Dr Philipp Hofflin, Portfolio Manager on the Australian Equity Team at Lazard Asset Management.

Professional investors have been banging the quality drum with intensity since since the June sell-off.  It makes a lot of sense. In today's market turbulence, the companies that will survive (and thrive) need strong balance sheets, consistent earnings and high return on capital. All the good stuff.  But that alone doesn't make them good investments. Quality companies only make sense if you buy them at a good price.   Today's episode of The Rules of Investing features a Livewire favourite: Steve Johnson, Chief Investment Officer and co-founder at Forager Funds.  Forager started life in 2009 and now manages approximately $350 million across an Australian share fund and an unlisted international shares fund.  Forager are on the hunt for undervalued and unloved companies, mainly in the small cap space, but they also invest in mids and large caps to add some liquidity to the portfolio when volatility spikes.  Today we discuss lessons learned from 2022, the small cap cycle and earnings downgrades, and the one Aussie company with a market monopoly in the US.  Note: This episode was recorded on Monday 16 January 2023.  Timestamps 1:10 - Lessons learned from 2022 2:30 - The right time to sell  3:40 - Preserving capital 5:00 - Managing risk through weightings 6:30 - Managing investor expectations  8:40 - Inflation, rates and the Aussie consumer 13:00 - Earnings downgrades and small caps 16:00 - Are quality companies crowded? 21:20 - Forager's shopping list 33:00 - Forget about picking the bottom 35:00 - Biggest wins, deepest losses 39:00 - The Big Tech stock for the bottom drawer

In the upcoming episode of The Rules of Investing, we're joined by Steve Johnson, CIO at Forager Funds. Forager began life in 2009 as a compliment fund to the highly successful market newsletter The Intelligent Investor, and has grown to manage about $350 million across a listed Australian shares fund and an unlisted international shares fund.  Forager look for undervalued and unloved companies, and Steve has come to the table with plenty of companies that fit the bill. Here's a preview of what you can expect. 

The Rules of Investing is done for another year. But fear not! For those looking for some summer listening we’ve got a fresh Series of Success and More Interesting Stuff going live right now. Search for Success and More Interesting Stuff on Apple Podcasts, Spotify or Podbean. 

When volatility strikes, investors invariably become more reflexive and less disciplined.  But investing with reckless abandon is almost certainly going to lead to bad outcomes.    Experienced investors stick to the game plan - a game plan borne of experience and a process that's been tried and tested through the full business cycle.   On today’s episode of The Rules of Investing, David Thornton sits down with Matt Williams from Airlie Funds Management.  Matt cut his teeth in 1993 when he joined Perpetual Investments as an equities dealer. That was followed by 17 years at Perpetual, working alongside heavy hitters including Anton Tagliaferro, Peter Morgan, and John Sevior. There he held the role of head of equities from 2011 to 2015. He joined Airlie in 2016, with a remit that includes Australian share strategies for institutional clients and the Airlie Australian Share Fund for retail clients. This year, Matt was recognised as one of the best in the business and inducted into the Hall of Fame, joining a small and distinguished list of Australia’s best fundies (including the three Perpetual alumni mentioned above).    Matt explains why the Aussie market has fared better than its global peers, where valuations are and where they're going, and the one Aussie company Matt reckons is made for Berkshire Hathaway's portfolio.  Note: this episode was recorded on Thursday December 13, 2022. Timestamps 1:40 - Leaning from mentors, past and present 3:15 - It's not only what you own, it's what you avoid 5:00 - Why the Aussie market has outperformed global peers 8:00 - Cash is king 14:00 - Stress testing companies 18:30 - Defensive anchors 20:00 - Getting in early with Mineral Resources (ASX: MIN)  22:00 - Upgrade the quality when the market falls 23:00 - Buying blips 28:04 - A business made for Buffett

In tomorrow's episode of The Rules of Investing, I sit down with Hall of Famer Matt Williams - a portfolio manager at Airlie Funds Management. Matt runs Airlie's Aussie share fund. We cover a lot of ground, including the way he views today's market, where Airlie's deploying capital, and the one company born to be in Warren Buffett's portfolio. 

Growth investing has ruled the roost for the last decade. If you wanted astronomical gains, Big Tech was the train you needed to be on. Didn't matter which carriage, they were all coupled together.    But that all went belly up this year, with the growth-focused Nasdaq losing roughly a third of its value thanks to inflation, rates and slowing output.   If 2022 has taught us anything, it's that a regime change in markets has arrived with a bang. In the latest episode of The Rules of Investing, Livewire's David Thornton sits down with Sam Ruiz, a Portfolio Specialist in the Equity Division at T. Rowe Price. Sam hasn't lost any enthusiasm for growth investing. Instead, he acknowledges that the rulebook that worked so well through the 2010s should be put back on the shelf. Among many other key insights, Sam believes that the choice between growth and value is not the binary choice many make it out to be. The growth stocks that will excel in this market, and there are many, will share many many attributes with their value-focused cousins.   Topics discussed include the muscle memory plaguing markets, the changing face of growth, and the importance of capital. He also goes deep on a widely dismissed traditional sector that he believed could grow 2x in the coming years! Note: this episode was recorded on Monday November 28, 2022.  Timestamps 1:30 - Will the multiple mindset continue? 4:30 - Dark days for speculative growth 5:55 - Prices follow returns and narratives follow price 8:20 - Pitfalls of total addressable market 10:10 - Growth companies fed off multiples 16:30 - Dispersions = opportunities 18:40 - Don't count out cyclicals 21:20 - False dichotomy of growth vs value  22:15 - Importance of cash balances 28:00 - Hunting for idiosyncratic companies 29:00 - Opportunities in emerging markets 23:40 - A contrarian view on a dismissed sector 32:00 - Fight for money has changed the game 33:40 - A Big Tech stock worth its weight 36:30 - A Brazilian bank for the bottom drawer  

How the mighty have fallen. Large cap growth is on the nose. The NASDAQ composite is down roughly 30% this year, and it may have some way to go yet. But growth investing as a style isn’t going anywhere. Rather, it will need to adapt to the times.   In the upcoming episode of The Rules of Investing, we’re joined Sam Ruiz, a portfolio specialist at T. Rowe Price. Sam is on the team running the global equity fund. While they still maintain some exposure in the kinds of big growth stocks the market has sold off, their views of the growth market, and the way they pick their winners, is tailored for today’s new market paradigm.     Here’s a preview of what you can expect.

It’s been a crazy year for virtually every asset class. Commodities have been particularly interesting, though, because earlier this year, when most everything was selling off, commodities went on a bull run!  It’s a highly volatile sector, exposed to just about every macroeconomic variable there is, so investing in it takes a unique skill set. But as you'll learn, it's a first-order beneficiary of the big trends that will define markets over the coming decades. And that means massive returns.  In today's episode of The Rules of Investing, Livewire's David Thornton is joined by Luke Smith from Ausbil Investment Management. Luke runs Ausbil’s Global Resources Fund. The fund invests in natural resources companies using a top down and bottom up approach. It also goes short to help manage risk.   Luke explains why he's so bullish on battery metals, how the decarbonisation supercycle will pull commodities along for the ride, the mismatch between the nearish micro narrative surrounding China and what he's seeing at the micro level, and how he finds companies with relative value.  Note: this episode was recorded on Thursday November 11, 2022.  Timestamps 1:20 - Ausbil Global Resources Fund 4:10 - High demand, low supply in battery metals 9:30 - Falling demand in the West, accelerating demand in the East 10:15 - Macro fears distracting from micro strength 11:50 - Positioning through the commodities bull market 12:40 - Lacking investment in new supply 13:30 - Lithium spodumene price goes 25x 16:00 - Lithium, Cobalt and Copper are key for electrification 18:30 - Energy was on a tear before Russia-Ukraine 19:00 - Don't write off fossil fuels 20:50 - Separating signals from noise 24:00 - Don't be negative in a negative market 30:00 - Don't equate Aussie EV penetration with demand for electrification 32:00 - As relative value shifts, so should your exposures 37:00 - Commodities fundamentals are stronger than the macro narrative 41:08 - Betting against the market in 2020 43:10 - A Decarb stock for the bottom drawer

It’s been a crazy year for virtually every asset class. Commodities have been particularly interesting, though, because earlier this year, when just about everything was selling off, commodities went on a bull run. It’s a highly volatile sector, exposed to just about every macroeconomic variable, so investing in it takes a unique skill set.       In tomorrow's episode of the Rules of Investing, I sit down with Luke Smith from Ausbil Investment Management. Luke runs Ausbil’s global resources fund. We cover: - how he's investing in the energy transition; - the long-term macro anchors he employs to deal with short-term volatility; - and he also takes us through a sector set for 10x growth over the next ten years. 

When I ask most fund managers about today's operating environment, they almost invariably respond with words like 'difficult', 'complex', or 'bearish'.  And you can't blame them. The age of cheap money and growth at any cost is over. They're not defeatist, by any means, but it's safe to say they've had easier days at the office.  So it was a breath of fresh air to sit down with Bob Desmond from Claremont Global to record this latest episode of The Rules of Investing. Bob's optimistic, and he's "finding value everywhere."   Claremont Global run a high conviction global fund of just 10-15 stocks. Being that concentrated would send shivers down the spine of many investors at a time like this. But while it's true that diversification is the only free lunch in finance, it's also no coincidence that the vast majority of the world's top investors pass on the free lunch and choose to be concentrated. Bob takes comfort in knowing a few companies well. You could say that the quality growth companies Bob invests in are made for the moment. That is to say - indispensable large cap companies with lots of cash and big moats.   In today's episode we cover the kind of big tech stocks Bob likes, the stock he's just bought after waiting years for the right price, how he manages investor expectations during a bear market, and much more! Note: this episode was recorded on Monday October 10, 2022. 

Last week, London-based economist and founder of Longview Economics Chris Watling walked into a pub and ordered three pints of beer. The barman poured the pints and promptly asked Watling for £30. There was a pause, as the two made eye contact before eventually acknowledging the extreme prices for beer.  But it's not just beer and bars that are going through a rough time. The other B - the Bank of England - is in a policy tussle with the new UK government, and that's led traders to question the economic credibility of the country. In this special edition of The Rules of Investing, Watling sits down with Livewire's Hans Lee for a discussion on the state of the UK, his current global market strategy, and what he feels are the next big risks on the horizon. We also dig deep into the changes he's made to Longview's model portfolios - and there are many to get through.

The old adage that "past performance is not an indicator of future returns" is possibly more relevant in today's market than it's ever been.  When the market is driven by momentum, as it has been through the past decade, piling onto winners has paid off. And why wouldn't it? Earnings have been easy to fuel when debt costs next to nothing, in a market where the shareholders reward the pursuit of market share - no matter how it's achieved. In today’s episode of The Rules of Investing, David Thornton sits down with Mark Landau – Co-Founder and Chief Investment Officer at L1 Capital.  Mark started L1 in 2007, alongside Raphael Lamm. Their flagship long-short strategy has returned a whopping 18.7% per annum since inception, and was ranked in an HSBC survey as the ‘Best Performing Hedge Fund Globally’ in 2015 and ‘Top 20 Hedge Fund Globally’ in 2016, 2017 and 2021.  The episode covers an enormous amount of ground. We discuss everything from the uniqueness of today's market, where L1 is deploying capital, what makes earnings sustainable, the importance of balance sheets. Mark also tells us why the investing playbook of the last decade should be put back on the shelf.  Timestamps 1:15 - Origins of L1 Capital 3:20 - Lessons from the GFC 5:30 - The problem with long-only investing 6:00 - Quality value strategy 8:10 - Today's unprecedented market cycle 10:00 - No quick fix for inflation 19:55 - How macro informs a bottom-up approach 22:30 - Where L1 is deploying capital 24:30 - Expensive defensives  28:00 - Sustainable P/E ratios 30:30 - Importance of under-geared balance sheets 31:10 - Pricing power 32:00 - Management teams on notice 35:30 - What makes a good short 42:50 - 3 favourite questions

It's not a stretch to call the last twelve months in markets a regime change. Inflation, rates, valuations, liquidity; everything has been turned on its head.  While today's conditions may be unique in makeup, they're not new in isolation. Each of the trends we see today have visited markets before.  So who better to get on the Rules of Investing than someone who has seen it all: Hall of Fame fund manager Chris Kourtis from Ellerston Capital. Chris has served as a Director and Portfolio Manager of Ellerston since 2005, and has over 36 years investment experience. Before Ellerston, Chris co-founded the Melbourne based Investment Management firm Portfolio Partners in 1994, where he served as Director, Senior Investment Manager and Head of Equities.  As you'll hear, Chris is extremely bearish on markets - but that doesn't mean he's packed his bags. Quite the opposite, he's bought the dip! TOPICS DISCUSSED: the parallels between today and the dot-com crash how to gain exposure to the resource sector without being a slave to commodity prices  the problem with banks what he liked about Xero compared to other tech plays the importance of dividends why 'old-school' investing principles are so important in today's market He also gives us double value for money by naming two stocks he'd put in the bottom drawer.

When markets crash sharply, as they did earlier this year, it can be a mistake to assume that as soon as the falls peter out, the market will then naturally recover.  Sure, this sometimes happens. The crash of 87, the global financial crisis, and COVID are all examples where the market went into freefall fall once, more or less, before recovering.  But here's the thing. Just because the market has sold off and since recovered some, that's no guarantee the market is in recovery mode. Markets, sectors and individual stocks can go down, stabilise, then go down again. While picking the bottom might be a mug's game, you're not going to go into high gear and invest if you think there's further broad based losses on the way.  This is where today's guest comes in. Dr Philipp Hofflin, Portfolio Manager at Lazard Asset Management, is an expert in market bubbles and what happens after them. And it's not as cut and dry as you might think.    In this episode, Phil discusses:  his learnings from Jackson Hole and where we are in the rate cycle; the difference between Australia and the US when it comes to interest rate sensitivity; why some stocks are now attractive while others have further to fall; how he values the energy sector, and  what sectors and stocks are attractively priced.  

The world is opening, but not to calm and stability.  Rather, COVID has left a trail of destruction. And I'm not talking about the health implications. The pandemic has left economies and markets rattled by supply chain problems, inflation, and rate hikes.  Big tech has been hit the hardest as investors flee long-duration stocks.  However, despite sharing an acronym, the big tech stocks have been split down the middle. Some companies are awash with cash and trading at extremely attractive multiples. Others look like emperors with no clothes.   This is one of the topics Livewire's David Thornton tackles with Mary Manning from Alphinity Investment Management. Mary is a Portfolio Manager for the Alphinity Global Fund and Alphinity Global Sustainable Fund. She's been investing in global markets for over 20 years with stints working for Ellerston Capital, Oaktree Capital and Soros Fund Management. We also go deep on US-China relations and compare the two starkly different markets, as well as Mary's interesting take on the ESG challenges brought about by Artificial Intelligence.  Timestamps 1:00 - Back on the road and takeaways 2:00 - low-end vs high end-consumer 3:30 - Diverging FAANGS 8:20 - Big tech profitability 13:20 - US-China hostilities 16:00 - Operating in China 19:00 - Weaponised trade 25:30 - Investing in China 29:00 - Sustainability and AI 37:00 - 3 favourite questions

Investment management can be a brutal business. When you're talking small caps, the brutality is amplified orders of magnitude.  Between March 20 and September 3 last year, the ASX Small Ordinaries Index sky-rocketed 44.38%. That's the kind of performance that will make a fund manager euphoric, but also nervous. Mean reversion is a thing.  Eventually, you need to pay the piper for that kind of performance. And pay the piper the small cap sector most certainly did, in the form of a 25% downward correction.   But just as what goes up must come down, what goes down will eventually go up. And we may have passed that inflection point, with the Small Ords Index up over 11% in the last month.  In this episode of The Rules of Investing, Livewire's David Thornton sat down with Donny Buchanan, Co-Founder, CIO and Portfolio Manager for the Lakehouse Small Companies Fund.  Donny's fund has been swept up in the sell-off. But frankly, so has just about every fund. What's important is how they set themselves up for the recovery. You make money in the buying, after all.   Donny discusses the problems associated with valuing tech growth, the importance of believing in and sticking to your fund's mandate, and the lessons he's taken away from this latest sell-off.  He also offers up a small cap tech stock that is quietly forming a monopoly by creating its own ecosystem. 

Fixed income has had a torrid time of it the last year – in fact, by some measures it’s been the worst year on record – with US treasuries losing about a tenth of their value.  Since the beginning of this year, global bonds have recorded their worst performance on record, with the Bloomberg Global Aggregate Total Return (USD) Index down around 10% year to date - equating to $3.76 trillion in lost value.  This performance has also coincided with a sell-off in global equities, with the MSCI World Net Local Total Return Index down around 21% over the same period.The last time that we saw a multi-month sell-off in both global equity and bond markets was in 1994 – a time when the Federal Reserve also had to sharply reverse policy. But if you’re thinking about selling out of fixed income – think again. Crystallising a loss by panic selling may be the worst thing you can do. Joining us for today's episode of The Rules of Investing is Andrew Canobi, director of Australia Fixed Income at Franklin Templeton. He’s been in the role since 2014, and is responsible for steering macro strategy, credit research, and fixed income portfolio construction. Prior to that, Andrew was director and portfolio manager for Deutsche Asset & Wealth Management. He also had stints at Invesco and ABN AMRO. What goes up must come down, and as Andrew explains, yields can only go so high, so we mightn’t be very far from a golden era in fixed income.  He also gives us his take on the inflation cycle, why we should take our cues from the market rather than central bankers, and where the best value exists in fixed income.  This episode was recorded on June 18, 2022.  Timestamps 1:20 - Are markets at DEFCON 1? 2:25 - Will central banks do too much or too little? 3:30 - Should we take cues from central banks or the market? 8:00 - How is supply side inflation tamed by killing demand? 10:00 - Is Australia's housing market the joker in the pack? 14:00 Why fixed income is still a good investment 20:45 - A corner of the fixed income market investors don't know about 22:20 - Investing in overseas bonds 26:00 - 3 favourite questions

Markets are a right mess today, thanks to surging inflation and the fear of what that will do to earnings.   In this environment, you want companies that have the market position, leadership and balance sheets to survive. However, actually finding these companies is no mean feat.  On today's episode of The Rules of Investing, Livewire's David Thornton sits down with Vince Pezzullo - Deputy Head of Equities at Perpetual. Vince joined Perpetual in 2007 and has covered a heap of sectors since then; you name it - chemicals, financials, banking, telecommunications, materials and REITS. He now heads up the Australian Share fund, Geared Australian Share fund, Direct Equity Alpha fund and the Perpetual Equity Investment Company (ASX:PIC) with about $435 million under the hood. There's not much we don't cover in this episode. We take a granular look at the affect inflation is having on valuations and company decision-making, the structural shifts afoot in the energy market, and the qualities every company in your portfolio should have.  We even discuss an Irish gambling stock making waves in a wide-open US market.    This episode was recorded on June 23, 2022.  Timestamps 1:45 - Company margins 5:00 - Investing to get down the cost curve 6:00 - DuPont ROE 7:30 - Growth stock valuations 9:30 - Energy, the global tax on growth 10:45 - Shifting trade flows 13:10 - Santos 14:30 - Energy sector going from spot price to contracts 19:45 - Banks margins and rising rates 23:00 - Inflation: 1990s vs 1970s 25:30 - An investment checklist during high volatility 28:00 - The limit to duration risk 29:10 - The importance of real assets 32:00 - The Irish bookmaker making waves in the US 39:00 - 3 favourite questions

The prophets of doom are blowing their recession horns. Accordingly, investors want to hold assets that can be bulwarks against whatever's driving recession - that being inflation in today's case. And that's what today's edition of The Rules of Investing is all about. Livewire's James Marlay sat down with Warryn Robertson, who is a portfolio manager and analyst at Lazard Asset Management. Warryn's responsible for managing the Global Equity Franchise Strategy as well as Lazard's well-known Global Listed Infrastructure Fund - which has roughly $20 billion under the hood.  Today's episode will focus on infrastructure - a topic we know is front of mind for our readers. In our recent survey infrastructure ranked third as the asset class they're most likely to increasing exposure to over the next 12 months.  Warren founded the infrastructure strategy back in 2005 and it has returned 10.7% per annum since then.  You'll hear why infrastructure is "the best inflation protection you can get".  But don't go running off to market before pressing play on this episode - as it can't be just any old infrastructure.  He also explains how Lazard value their assets, the key thing the whole investment industry missed during COVID, the increasing trend towards privatisation of infrastructure and a near monopoly asset that he believes offers compelling value.  This episode was recorded on June 23, 2022. 

Let's face it, it has been hard going in the small caps space - which is down almost 18% this calendar year.  As soon as you get headwinds such as inflation and rate hikes, babies will invariably get thrown out with the bathwater. Good companies with strong balance sheets get sold off in the stampede as investors run for the door. Today's guest on The Rules of Investing is Oscar Oberg, a lead portfolio manager at Wilson Asset Management. Oscar and his team run the firms flagship listed investment company WAM Capital (ASX: WAM), which has a market cap over $2 billion, as well as WAM Microcap (ASX:WMI), WAM Research (ASX:WAX) and WAM Active (ASX:WAA). Oscar is firmly of the view that small cap sentiment has become overly pessimistic, and the longer term view is better than the prevailing headlines suggest.  "On a medium to long term view, I'm positive. We want to be ready for when it changes, and it will flick really quickly." Oscar recently joined Livewire's David Thornton on the Rules of Investing podcast where he outlined his playbook for investing through the bear market currently gripping small cap industrial stocks. Oscar says he is seeing craziness in the market and it is creating great opportunities that are categorised under three broad baskets. beaten down stocks where values are massively depressed; companies with strong asset backing; and retailers where sentiment has massively overshot to the downside.   As you'll hear, those baskets are full to the brim and Oscar shares a number of stocks that he believes look compelling right now. Timestamps 0:52 - How Oscar and the team run the portfolio and uncover new ideas 4:25 - The outlook for small and mid-cap Australian shares 6:56 - Why earnings downgrades are on the way for small caps 8:18 - Stocks that have taken a beating and now look interesting 10:50 - Some of the sectors Oscar is avoiding and a few that look interesting 14:48 - Inside WAM’s research and active investment processes 19:58 - Never a put a redline through a potential opportunity 22:20 - The one-way market in ASX listed stocks 23:55 - Opportunities in unloved microcaps 29:00 - What it will take for sentiment to turn for small caps 32:15 - The 3 favourite questions 

Imagine for a moment that you had a clean sheet of paper from which to build your investment portfolio from the ground up. Would that rebuilt portfolio look the same as what you own today? One could guess that for many people the answer is no, and that if given the chance to start from scratch their portfolios would look quite different.  Livewire's James Marlay puts this question to Simon Mawhinney, the Managing Director and Chief Investment Officer of Allan Gray, a contrarian investor responsible for oversight of the firm's Australian equity strategies. They also touch on what it means to be a contrarian investor and where contrarian opportunities exist right now.

We're all well aware of the headwinds battering markets today - inflation, supply chain pressures, and rate hikes. Yet it's easy, and misguided, to broad brush the market and expect all stocks to respond in the same way. As you'll learn in this edition of The Rules of Investing, what is a headwind for one stock can be relative value for another.  Today’s guest is Simon Shields. Simon co-founded Monash Investors in 2012 following stints as head of equities at UBS and Colonial First State.  Monash Investors are a long/short Australian equity manager with an absolute return focus, which it adopts in its two funds – one listed and one unlisted. Today won’t focus on Simon’s investment style – for that, I urge you to listen to the episode published back on Oct 09, 2020.  Simon discusses: The outlook for oil prices, and what this means for Aussie producers Back to the future for supply chains What earnings downgrades will mean for stock pricing  Timestamps: 1:30 - What gave birth to today's headwinds 3:30 - Oil supply in trouble, and the stocks that will benefit 9:00 - Inventories and cost pressures 17:00 - Cost pressures on consumer discretionary 20:30 - Growth discount rates 24:00 - Companies with moats 26:00 - Time for shorts 30:00 - The problem with benchmarks 37:00 - 3 favourite questions

Global markets are in a world of hurt. This week the Dow Jones Industrial Average nose-dived 1,100 points - its biggest loss since 2020. For all but those with the greatest of risk appetites, it's time to hunker down and weather the volatility storm.  But the rout won't last forever. As the saying goes, the night is darkest just before the dawn. So being ready for the turn will be key to capturing the growth to come.    For today's episode of Rules of Investing, we're joined by small cap notary Ben Griffiths, Managing Director and Senior Portfolio Manager at Eley Griffiths Group. Ben is a notary of sorts in the Australian small cap space, having co-founded Eley Griffiths Group back in 2002 with Brian Eley following a successful career as joint head of small companies at both BT Financial Group and ING Investment Management. Ben discusses the mess markets are in today, and the three signs he's waiting for to know when it's time to start buying. We also take a deep dive into small cap resources - a sector that can't, and shouldn't, be ignored when investing in small caps. 

The RBA lifted the cash rate yesterday by 25 basis points, to 0.35%. And just like that, its war on inflation - which it will wage against aggregate demand - is underway.  The threat of inflation has been written on the wall for some time, though, prompting some to wonder if the central bank has dropped the ball. Today's guest, Charlie Jamieson, co-founder of Jamieson Coote Bonds, questions whether the RBA ever had the ball in the first place, having stated as early as last year that it didn't expect to lift rates for three years. "It was absurd to think we'd be in 0.10% settings until 2024," says Jamieson.  The hikes will now come thick and fast, if bond market prognostications are anything to go by.  "The bond market is pricing the RBA to hike rates higher than the US Federal Reserve... that's extraordinary." In today's episode, Charlie rates the RBA’s handling of the inflation (and he doesn’t mince his words), how bonds will perform in light of it, and pulls back the curtain on bond portfolio construction - namely, which bonds to include and when.  1:26 - Did you expect inflation to be that high? 5:05 - Has the RBA dropped the ball? 12:35 - How culpable are central banks for inflation? 20:40 - The yield curve inversion - trajectory for rates? 28:30 - How possible is it for credit markets to freeze up? 31:50 - Bond return expectations 37:15 - How do you balance the duration as rates and expectation change? 41:45 - Active vs passive bond funds? 45:00 - Absolute return vs index bond funds 48:00 - How bad will it get? 50:55 - 3 questions

Conventional wisdom holds that 'traditional' natural resource investments are a sure, safe bet. And justifiably so: Land, from which natural resources have been extracted, is one of the classic four factors of production.  They offer diversification and inflation protection courtesy of increased pricing power when costs go up.  It doesn't take much to realise the relevance of these attributes in the current environment.  But here's the thing. Renewables offer all those benefits and more, according to today's podcast guest Lucas White - portfolio manager for GMO's Resources and Climate Change strategies. "The broad economy could be struggling, or GDP growth could be flattish or barely growing, but if the world is rapidly transitioning to clean energy, there's no reason why a clean energy strategy couldn't do very well."  In this episode of The Rules of Investing podcast, you'll also hear why renewable energy will be taking the commodities sector along for the ride, and how GMO filter their clean energy stocks to capture outsized returns. 

After 4 and a half years at the helm, Patrick Poke is parting ways with The Rules of Investing. Please enjoy some highlights from the most popular episodes of the podcast to date. We also introduce the new host of the show. 

The multi-bagger is the “holy grail” for most small cap investors. Whether you like tech, resources, industrials, or all the above, there’s nothing quite like the satisfaction of watching your stock go up three, five, or even 10 times. Dean Fergie from Cyan Investment Management has had a few of these stocks in his nearly-25-year career in Aussie small caps. He has noted a few similarities among them – though he freely admits its “obvious stuff”. The company’s product or service must be scalable. People love what the company is selling. These types of companies tend to generate ‘buzz’ – think Afterpay in the early days, or for those that remember, Sanity stores when they were being rolled out in the 90s. People are forced to use it, regardless of whether they like it. He points to Transurban (it was a small cap once!) as a good example. In this episode of The Rules of Investing podcast, Dean explains how to handle it when markets aren’t going your way, we discuss a handful of Aussie small caps – some well-known, some not so – and he tells us why he thinks it’s time to start putting cash to work after the recent sell off. 

It's not easy being one of the world's most-famous short-sellers.  As Jim Chanos knows, it takes thick skin to deal with daily negative backlash, and, of course, markets storming "parabolically" higher over the past few years.  But now the tides are turning, and rather dramatically, according to the 64-year-old Wall Street veteran. In fact, since September 2021, investors have been slowly waking up to misleading accounting practices among the world's most highly valued firms, and their share prices have plunged accordingly.  And while Chanos is adamant his market predictions should be taken with a grain of salt, he notes that there continue to be several well-loved companies, Tesla included, that still could have a long way further to fall.  "We have a number of US$100 stocks that we think are probably worthless, because the business model is broken, and yet they are reporting numbers that are not real," he says.  So which companies could be misleading investors today? In this exclusive Livewire interview, you'll get an inside look at the legendary short seller's view on markets, as well as some of the global companies that Chanos considers to be posting fraudulent financial figures and could be in for a rude awakening over the months to come. 

Rising rates, rising volatility, and rising geopolitical tensions. It's tough being an equity investor in today's market.  But Australian investors have generally fared better than most. With a heavy skew towards resources and financials, both of which have outperformed the broader index in recent months, the ASX 300 has outperformed the S&P 500 by nearly 5%.  In the latest episode of The Rules of Investing podcast, I speak to John Lockton, Head of Investment Strategy at WILSONS. He shares his views on the banking, resources, and healthcare sectors following the recent reporting season, he tells us about one important macro issue the market is overlooking, and we hear about several Aussie stocks with significant upside.

According to Andrew Clifford, CEO and Co-Chief Investment Officer of Platinum Asset Management, there's one variable that matters more than any other in stock markets. That variable is interest rates. Interest rates can't get much lower than current levels, and, until recently, central banks have been pushing rate hike expectations years out into the future. But that narrative has changed abruptly, and market participants are scrambling to dial up the speed and quantum of rate hikes in their forecasts. In a note sent to Platinum's investors, Clifford said he sensed a 'regime change' was on the cards and that January could be a sneak preview for what lies ahead in 2022. The significance of this regime change has been well articulated. Low-interest rates have been a powerful tailwind for a long time, especially for the valuations of defensive and growth companies. Every bull market has two things in common, according to Clifford. Firstly, it has a great story, which is a true story. In the case of the current market, we've seen some unique companies emerge in the US tech sector. The second ingredient is easy monetary conditions. He says that bull markets die with higher interest rates, and then the underlying fundamentals of companies get questioned. James Marlay recently had the opportunity to sit down with Andrew Clifford to explore his views on the investment backdrop, why he is short US equities and long China and two high-conviction ideas in the Platinum International Fund's portfolio.

Guest: Tim Toohey, Head of Macro and Strategy at Yarra Capital Management. Just a few minutes ago, Russian President Vladimir Putin announced a "special military operation" in Ukraine - an apparent euphemism, for the world watching on, for "invasion". Despite weeks of speculation, the news of war in Europe is truly shocking no matter where you are on Earth. Most investors have never witnessed anything like this in their lifetimes, and how markets react in the short term is anyone’s guess. Just a couple of days ago, I had an in-depth discussion about what were then just ‘tensions’ in Ukraine with Tim Toohey, Head of Macro and Strategy at Yarra Capital Management. We discussed the likely effects on different parts of the market, as well as the best way to hedge portfolio risk. In this episode of The Rules of Investing podcast, we also hear why markets may be underestimating the rate rises set to come from the US Federal Reserve, and he explains a critical piece of data out of China that could have global ramifications.

Guest: Chris Bedingfield, Quay Global Investors. Australian housing is expensive. Hardly a shocking statement. But if you ask a bunch of investors and economists why it’s expensive, you’re bound to get a wide range of answers. Most of them will refer to credit availability in some way. A few might mention a lack of supply and demographics, and almost all of them will discuss interest rates. But according to Chris Bedingfield, Principal and Portfolio Manager at Quay Global Investors, there’s a simple and absolutely critical reason that almost everyone overlooks. Indeed, in more than a decade of closely following markets, I’ve never heard this view put forward. It all boils down to the replacement cost – or the cost of building a new home. Sure, there’s a premium for being closer to the city or the beach, and various other niceties that come with expensive inner suburb houses. But it’s the cost of building new property in Bankstown or Craigieburn that ultimately drives prices in the rest of the city in the long term. As The Rules of Investing podcast returns after a break, Chris explains why it’s so expensive to build new housing in Australia, shares some of the best opportunities in real estate today, and he tell us why he thinks many people are overestimating the impact of working from home. 

Guest: Owen Hegarty OAM, Executive Chairman, EMR Capital.  There have been few times in history that one could look at an industry or sector and confidently expect decades of growth ahead. But this is the situation that the resources industry, in particular, those exposed to decarbonisation, finds itself in today. Governments around the world have committed to emissions reductions targets that start from 2030, going all the way out to 2070. And there is a range of metals that will be required in great quantities if we're to have any chance of meeting those targets. Owen Hegarty OAM, Executive Chairman of EMR Capital and founder of the 'Mighty Ox' (Oxiana Resources), is acutely aware of this. From the obvious beneficiaries, through to the counter-intuitive, he's built a portfolio of companies that are set to ride this wave of growing demand. In this special episode of The Rules of Investing to celebrate 1,000,000 downloads, I speak to Owen about his experience building the Mighty Ox, why potash is critical for feeding a growing population, and he identifies one recently listed ASX copper miner that's set to benefit as the world goes green. 

Christmas is already upon us, which means it's time to take a break from your regular Rules of Investing programming. But don't worry, there's plenty of podcast content to keep you informed and entertained of the summer. Listen to this special short preview to learn what's coming up. 

Consistency is key to successful investing. Just ask someone who invests in speculative mineral explorers – they’ll likely be able to tell you about their big winners but might be less keen to discuss their strike rate. But even getting 60 or 70 percent of your picks right is enough to produce outstanding performance. That’s one of the reasons Ben Clark from TMS Capital has done well, both on Livewire and in the High Conviction Fund that he runs. Regular Livewire viewers will recongise Ben as a regular guest on Buy Hold Sell and our annual Outlook Series. Not only did he win Livewire’s ‘Don Bradman award’ for the most consistent stock picker on Buy Hold Sell, but he also topped out the Fundies’ Picks in our 2020 Outlook Series. So with just a couple of episodes of The Rules of Investing remaining for 2021, I thought it was about time we got Ben on the show to understand what makes him tick. In this episode, we learn about his approach to investing in quality growth stocks, he shares his views on the Afterpay/Square merger, plus we discuss several Aussie stocks that he thinks have outstanding opportunities for growth. 

Guest: Nick Griffin, Chief Investment Officer, Munro Partners. The internet changed the lives of every person reading this article (and everyone who isn't for that matter) and the fortunes of almost every business in the world. Today, all the largest companies in the world are internet businesses. The biggest media company is Facebook (or shall we call it Meta?), the biggest advertising company is Google, and the biggest retailer is Amazon. 25 years ago, these companies either didn’t exist, or were mostly unknown. It might seem like the internet was a once-in-a-lifetime paradigm shift. And while it was indeed a true paradigm shift, it may not be once-in-a-lifetime. According to Nick Griffin, Chief Investment Officer at Munro Partners, there’s another paradigm shift staring us all in the face: decarbonisation. And just like the internet changed our lives and our businesses, so will decarbonisation. In this episode of The Rules of Investing podcast, he explains the size and scope of the opportunity, and shares one decarbonisation-exposed company that he believes is materially mispriced. We also learn how to avoid selling your growth stocks too early, and why he sold all the firm's positions in Chinese stocks such as Tencent and Ali Baba. Full transcript provided here. 

In the first part of this special miniseries, I talk to Brandon Munro, CEO of Bannerman Energy and co-Chair of the World Nuclear Association's Nuclear Fuel Demand Working Group. Bannerman is a greenfield developer listed on the ASX under the ticker code BMN. Bannerman are currently completing a Definitive Feasability Study on their Etango-8 project, a scaled-back version of their original Etango project.   In this podcast, we discuss the background for the current bull market, how Sprott Asset Management have changed the market with their Physical Uranium Trust, and he gives us some insights into the Etango-8 project.   Disclosure: The host/author owns shares in Bannerman Resources. 

In the second part of this special miniseries, I speak to Leigh Curyer, CEO of NexGen Energy. NexGen Energy is currently developing the Arrow deposit, located in the Athabasca Basin in Saskatchewan in northern Canada. Arrow is one of the largest, highest grade undeveloped uranium resources in the world. NexGen has been listed on the Toronto Stock Exchange and the New York Stock Exchange for several years, but recently gained another listing on the ASX under ticker code NXG.   In this podcast, we discuss  potential future increases in demand for uranium, why NexGen sought an ASX listing, and he provides some valuable insights into the Rook I project and the Arrow deposit.

In the final part of this mini-series, I speak to Guy Keller, Portfolio Manager of the Tribeca Nuclear Opportunities Fund. Guy has over 20 years of experience as a commodities analyst and trading, having been Head of Asia Base Metal Trading for Macquarie Group before joining Tribeca in 2017. As the name implies, the Nuclear Opportunities Fund is focused solely on investing in companies involved in the nuclear energy industry, with a particular focus on uranium.   In this podcast, we discuss why it's taken this long for uranium prices to improve, the difficulties with bringing planned additional supply online, and he shares his top pick for the sector.   Disclosure: The host/author is a shareholder in several of the companies discussed in this episode.

'Buying a dollar for 80 cents' is an old investing cliche that's rarely taken literally these days. In a bygone era, 'net-nets' - stocks trading below the value of their net tangible assets - were a relatively common occurrence. Some investors built their whole portfolios (or careers) around them. But finding them today is easier said than done.  When dealing with listed investment companies and listed investment trusts (LICs) though, buying a dollar for 80 cents is commonplace. In fact, according to Daryl Wilson from Affluence Funds Management, buying at a discount should be central to the strategy.   Not only is it possible to pick up assets at a discount, but "the quality of managers is tremendous," says Daryl.  In this episode of The Rules of Investing podcast, we take a deep dive into the world of LICs. We cover the basics and some common jargon, how to pick a great LIC and some common pitfalls to avoid, and Daryl shares some of his favourite LICs in the market today.  Visit Livewire Markets here for a full transcript of the interview. 

Michael Goldberg and the team at Collins St Value Fund know a thing or two about making money off unloved and out of favour stocks and sectors. Their investments in uranium and a then-unloved pharmaceutical stock (among others) have helped them outperform the ASX 200 by over 8% per annum in the 5 years to 30 June. With both of these investments having seen some outstanding returns in recent years, the obvious question is where to look next? In this episode of The Rules of Investing podcast, he addresses exactly this question. His answer is unlikely to be popular among investors, but isn’t that the point? Tune in below and you’ll also hear about the ‘superinvestors’ he’s learned the most from, and he tells us about a founder-led company with outstanding prospects for growth. 

The early 90’s was an interesting time. The internet was taking off, Australia was having the ‘recession it had to have’, and Perpetual was a hotbed of Australian investing talent. A host of great investors either started or furthered their careers at the firm around this time, with many of them later launching their own boutiques. Among them was John Sevior, who along with David Cooper, founded Airlie Funds Management in 2012. John believes the success of the firm was largely due to it being a group of like-minded people who knew the limits of their knowledge. But most of all, they always stuck to a set of simple – but not always easy – investment principles. In this episode of The Rules of Investing podcast, John explains those simple principles that have guided his investments and how they’ve evolved over the years. He also tells us how investing first piqued his interest, and we take a deep dive into two high quality, underappreciated Australia retailers.

When Alex Waislitz started his private investment company, Thorney Investment Group, back in 1991, he was a dyed-in-the-wool value investor. Having learned the craft from the legendary entrepreneur Robert Holmes à Court, who was Australia’s first billionaire, his focus was on being a thorn (hence, ‘Thorney’) in the side of “sleepy” management teams. This approach helped him unlock hidden value and underappreciated assets and propelled him to the realms of the AFR Rich List. But rather than becoming stuck in his ways, in recent years, Waislitz has expanded his range of skills. After developing an interest in innovative growth companies, he launched Thorney Technologies in 2016, which invests in companies across the technology lifecycle. In FY21, it was one of the best performing LICs on the ASX, with share price appreciation north of 65%. In this special episode of The Rules of Investing, we hear about the formative years of his investment career and how he developed the strategy that's been so successful, how he's taking a 'picks and shovels' approach to investing in digital currencies, and he tells us about two Aussie small caps - an undervalued turnaround, and an innovative company with a large addressable market.

At just 23 years’ old, Harley Grosser did what many of us only ever dream of and founded his company, Capital H Management. At the time, he had just $50,000 of his own savings, and $50,000 from his grandparents. Over the next four years, he grew that money to $800,000 – forcing his grandmother off the aged pension in the process! He achieved these returns through a combination of taking concreated positions, investing in materially undervalued small and microcaps, and looking for catalysts to help realise the value in underappreciated assets. In this episode, we hear about the beginnings of Capital H Management, he explains how he tracks down microcap opportunities, and he tells us about a company going through significant change that the market has yet to fully appreciate.  

The allure of finding a big winner is difficult to resist for most equity investors. After all, we’re doing it to make money! However, there’s just as much (if not more) benefit from avoiding losers as there is from picking winners. Or as Warren Buffett has famously put it: "Rule No. 1: Never lose money. Rule No. 2: Never forget rule No. 1.” Simple maths supports this hypothesis too – a 50% loss requires a 100% gain just to get back to breakeven. This is especially true in the world of small caps, where Katie Hudson from Yarra Capital operates. “When they go wrong in small companies, they go wrong in a big way. It’s not uncommon to see a 50% reduction in the share price on the back of a company having a misstep.” In this episode of The Rules of Investing podcast, Katie share some strategies for avoiding portfolio bombs. She also tells us how she exploits inefficiencies in the markets to produce outsized returns, and shares an Aussie small cap that markets are underestimating.

Peter Morgan is one of the most accomplished investors in Australia. While he might not be a 'household name' these days, ask anyone who's been around the industry more than 10 or 15 years and they'll likely tell you how he helped build Perpetual from an obscure company managing $70 million worth of perpetual trusts (hence the name) to a $10 billion giant of the Australian funds management industry. He worked alongside investors like Anton Tagliaferro, John Murray, John Sevior, and Matt Williams as they all made names for themselves in the industry. After leaving Perpetual in the early 2000s, he founded 452 Capital, which went on to become one of Australia's most successful boutiques. Then in 2009, he abruptly left the industry after being diagnosed with a rare and deadly form of brain cancer - a diagnosis that was later shown to be incorrect, but not before a round of chemo. This experience left him with an entirely new perspective on life, one that valued experiences and memories over gathering an ever-larger pool of assets. Throughout all this, he says the best thing he's ever bought is his dog, Blaze - $300 well spent indeed! In this episode of The Rules of Investing podcast, we delve into his incredible story, hear how he manages assets differently now as a private investor, and hear some of his views on markets and stocks today. 

Small caps are often thought of as being high risk, but that doesn’t have to be the case. With the right approach, it’s possible to maintain a moderate level of risk, while still producing outstanding returns. This is exactly the approach that Richard Ivers, Portfolio Manager at Prime Value, takes in managing the Emerging Opportunities Fund. By focusing on high quality businesses with relatively few risks and strong competitive positions, he’s managed to outperform the market in 87% of months that it fell. “A shorthand method for working out quality is that if you can work out where the earnings will be and have a high level of certainty on where they'll be in three to five years, typically, that means that it's a quality business. Such a business will be able to withstand all the pressures and issues that may come at it.” In this episode of The Rules of Investing podcast, he explains how his experience in the corporate world helps inform his investment decisions, we discuss a range of Australian companies across the finance, media, and beverage industries, and he details his low-risk approach to Aussie small cap investing.

In the under-researched and often illiquid world of small and mid-caps, stocks are largely driven by individual factors. If a company’s product or service succeeds and earnings improve, the stock price usually follows. But, as Matthew Haupt, Lead Portfolio Manager at WAM Leaders explains in the latest episode of The Rules of Investing, in the world of large caps, where stocks are heavily researched and traded by professionals, macro factors play a much larger role. “Given the breadth of the revenues of these bigger companies and the slower growth rates, the macro factors are more of a driver.” In this episode, he tells us how he uses macro analysis to help inform the stock picking decisions at WAM Leaders, we hear his views on a range of key ASX stocks and sectors, and he share his take on Jeremy Grantham’s prediction of a bubble in US equities.

Truly special businesses don’t come along very often. Those with enduring competitive advantages, the ability to grow for long periods and produce high returns on capital. When you find a rare business like this, it’s important to think long term, and “hitch your wagon to those economics”, says Emma Fisher, Portfolio Manager and Head of Research at Airlie Funds Management. That’s exactly what she did when making her first recommendation as an analyst back in 2013. As the time, CSL was trading around $60 per share. She continued following the company, and when starting at Airlie in 2016, advocated holding the stock across their portfolio. Her patience and commitment have paid off, with CSL up nearly five times from her initial recommendation, and three times since 2016. But today CSL faces new challenges in a COVID-affected USA. In this episode of The Rules of Investing podcast, we discuss those challenges and how CSL is placed to navigate them. We also hear why markets are underestimating Aussie retailers yet again, and we learn about an Aussie small cap powering ahead on its Formula 1 credentials.

Jeremy Grantham is famous for his ability to pick bubbles. The co-founder and Long-Term Investment Strategist at GMO Investment and Asset Management correctly called the Japanese equity bubble in the late 80s, and the tech bubble in the late 90s and early 2000s. All through 2007, he warned investors of the bubble, telling investors in a September ’07 article for Fortune Magazine: As wonderfully favorable factors cool off, asset prices will be under broad pressure, and risky assets will be under extreme pressure. If the credit crisis gets out of control, this will happen quickly and painfully. - Jeremy Grantham, September 2007 But Grantham is no permabear. In March ’09, when many investors capitulated, he wrote ‘Reinvesting when terrified’, telling investors that it was time to start putting cash to work, as equities were greatly undervalued. We now believe the S&P is worth 900 at fair value or 30% above today’s price. Global equities are even cheaper. - Jeremy Grantham, March 2009 In an exclusive interview that runs for nearly two hours, Grantham explains why he believes we’re in the late stages of another great bubble and his expectations for when it will come unraveled. He also explains why others fail to act in the face of bubbles, and we discuss some of the assets best placed to weather the storm.

A special preview of our nearly two hour long interview with investing legend, Jeremy Grantham. The full episode will be released on Friday.

It takes a special type of person to be a contrarian investor. Few people are willing to buy companies while others predict doom. It means accepting that you won’t always get it right, and the ability to put aside preconceived ideas about a company and focus only on the fundamentals. One investor who’s made a career of this approach is Simon Mawhinney, Chief Investment Officer at Allan Gray Australia. It was this contrarian streak that saw him buying banks and retailers in middle of the COVID-crash, a decision that turned out better than anyone could’ve expected at the time. But it doesn’t always go so smoothly, as was the case with his investment in the now-defunct Arrium, which we discuss in this episode of The Rules of Investing. We also discuss two current investments from the Allan Gray portfolio, and one former market darling that he’s investigating currently.

Getting the ‘vaccine trade’ right was perhaps the single biggest influence on performance for most fund managers in the second half of 2020. Equity markets jumped 10% in November on the back of the announcement, a huge month by any account. But for the managers who made the right call and backed it, a good year’s worth of returns were realised in a month. One fund that called it better than most was L1 Capital’s Long Short Fund, which posted just shy of 32% for the month. Founders and Joint CIOs, Mark Landau and Rafi Lamm, spent a huge amount of time last year researching vaccines, which gave them the confidence to fully position the portfolio for a positive result in November. In this episode of The Rules of Investing, Mark and Rafi tell us how far along we are in this ‘vaccine trade’ and how it plays out from here. We also discuss what went wrong following the IPO of the L1 Capital Long Short Fund, and they share several of the stocks that they think have outstanding opportunities ahead.

In early 2020, Nathan Lim, Head of Wealth Management Research at Morgan Stanley Wealth Management, noticed a strange phenomena. Chinese New Year had just passed, but thermal coal consumption wasn't recovering as it normally does. This rang alarm bells, and Lim was soon warning clients that the economic cost of the coronavirus would be far greater than people appreciated. Fast forward to a year later, and the world and the economy are entirely different places. Importantly for investors though, the cycle has been reset. Markets were already late-cycle going into 2020, but the economic upheaval of last year has brought spring time upon investors again. "We think we are very much early cycle, and we think you should be adding risk to your portfolio." In this episode of The Rules of Investing podcast, Lim details how and why it's time to add risk, explains their process for picking great fund managers, and he shares some of the managers they prefer for today's market conditions.

In recent months, much has been said on growth versus value, and tech stocks versus cyclical stocks. But focusing on these labels misses the true underlying driver of these trends: duration.  But what exactly is duration? A ‘long duration’ asset simply means one where a large portion of the returns are expected to happen in the distant future. These stocks are highly sensitive to changes in long-term interest rates, and they've taken a pounding so far in 2021. “Very small moves in interest rates can have outsized impacts on valuations. Our concern is that a steepening yield curve could cause these businesses to be repriced quite quickly,” explains David Moberley from Paradice Investment Management. Long-term interest rates are on the rise, and according to some experts, this tend is likely to stick around. With many of the ASX's winners in recent years firmly from the 'long duration' category, and many of the underperformers in the 'short duration' category, this could be an inflection point for Australian equities. In this episode of The Rules of Investing podcast, we discuss how his experience at a start-up helped him as an analyst, why Australian gas stocks are well placed for further appreciation, and we hear why CSL's collection problems are likely to just be transitory.

All investors are at the mercy of interest rates. As interest rates go down, asset values go up, which has been a huge supporter of returns in recent years. But it works in reverse too. As we’ve seen recently, when rates go up, it can trigger volatility and asset price falls. Or to put it another way, as Charlie Jamieson from Jamieson Coote Bonds says; “interest rates are the virus that affects all assets.” So, with the economy firing back up, and with inflation and long-term interest rates beginning to rise, investors are understandably nervous. In this week’s episode of The Rules of Investing podcast, I speak to Charlie about what’s happened in recent weeks, where rates could be headed, and why it matters so much. We also discuss how to make money from bonds - beyond just collecting a coupon, and the biggest risk facing markets today.

Most equity investors would advocate holding a highly diversified portfolio of 20 to 50 stocks, looking to reduce risk and bring returns closer to that of the index. But this attitude misses a key fact, according to Bob Desmond from Evans and Partners - volatility is not the same thing as risk. Instead, Bob prefers to own a concentrated portfolio of just 10-15 stocks, which allows him to focus on the best ideas. "Good ideas are so rare that if you find a good idea, you should really concentrate your capital in it." In this episode, we discuss investing during high inflation and some of the unexpected challenges this throws up, where he sees pockets of excess and where he's finding opportunities in equities, and why he thinks tech stocks still offer attractive returns.

Steve Johnson has built a reputation for himself and the team at Forager Funds for uncovering value in dark corners of the market. But in recent years, he’s learned the need for patience in this area, as extreme opportunities are not always apparent. That’s why, when markets are functioning normally, he keeps a core portfolio of high-quality businesses that he’s happy to hold. But when markets start to get dysfunctional, like in 2020, and prices depart far from values, this capital can be recycled into some of these opportunities for outsized returns. In this episode of The Rules of Investing podcast, we discuss how he’s balancing the portfolio to ensure performance in the good times and the bad, why Uber is misunderstood, and he discusses some Australian turnaround stories that the market hasn’t yet woken up to.

A quick note to say thank you for listening this year and preview some upcoming content over the holidays.

Guest: Jun Bei Liu, Lead Portfolio Manager, Tribeca Alpha Plus Fund After a tumultuous 2020, the world is (slowly) beginning to recover. With two successful vaccines announced, and the virus largely quashed in Asia and the Pacific, the time for ‘lockdown stocks’ is behind us, and the ‘recovery play’ has begun. But not everywhere is recovering at the same pace. While early progress from Europe’s lockdowns appear positive, the region has a long way to go. And the US has barely begun. Australia, however, is perfectly placed with the virus under control both locally, and in our biggest trading partner, China. Jun Bei Liu, Lead Portfolio Manager of the Tribeca Alpha Plus Fund, reckons that Australian equities “are in a pretty sweet spot, compared to global.” With consumer and business confidence rising, the de-leveraging of household and corporate balance sheets, and historically low rates, all the ingredients are there for a strong performance from Australian equities. In this episode of The Rules of Investing podcast, we discuss the re-opening trade and how to get exposure to it, how the ‘barbell’ approach helps to maximise returns while managing risk, and Jun Bei shares a high quality company she's recently added to the portfolio at a very attractive price.

Guest: Amit Lodha, Fidelity. Identifying key global trends in business and investing requires an overview of the world that few investors can achieve. But with an army of Fidelity analysts at his back, and a truly global focus, Amit Lodha is uniquely positioned to spot and act on these trends. When searching for these trends, Amit wants to find keywords - what he calls his "anomaly watch". Six years ago, the keywords popping up on his anomaly watch were "personalisation" and "simplification". Those trends led him to investments in companies like Facebook, Apple, and Google. More recently, the words that keep popping up on the anomaly watch are “collaboration” and “decentralisation”. In this episode of The Rules of Investing podcast, he explains the significance of these trends for the years ahead. We also hear about the time he met legendary investor Peter Lynch, and the lesson Peter shared with him.

When a stock has been in your portfolio for a while, it’s easy to get attached to the position and ‘anchor’ yourself to old information. In recent years, Simon Shields, Principal at Monash Investors, has shown repeatedly his willingness to change his view. He’s made money on both the long side and the short side on stocks like Kogan, Qantas, and Corporate Travel Management. So when I recently sat down with him for the latest Rules of Investing podcast, naturally, I wanted to know how he went about it. He pointed to three key “early warning signs” that he looks for that indicate it could be time to reduce a position: A spike in short interest An unexpected downgrade by the company (not by analysts) When a company fails to meet their ‘signposts’ that are expected along the way. He expands on all these points in this episode. He also shares an under-the-radar small cap that’s perfectly positioned for an outstanding 2021, and he nominates a controversial stock as one he’d hold if the market were closed.

Investors remain nervous after the massive sell off in February and March, but Matthew Kidman from Centennial Asset Management says that any sell off (such as we've seen in the week since this was recorded) should be treated as a buying opportunity. "If the market does come away in September, use it as a buying opportunity. Now is not the time to get off the train. Now is the time to buckle in, ride a few bumps out, and we're gonna go again." In this episode of The Rules of Investing podcast, we discuss the curious origins of Buy Hold Sell, why investors should treat any sell off as a buying opportunity, and we get his view on a range of Aussie small caps, including OohMedia, Adairs, and iCar Asia.

Guest: Jay Sivapalan, Head of Australia Fixed Income, Janus Henderson Group Fixed income investors have long held a reputation in markets as the ‘smart money’. With a focus on stability, income, and capital protect, and a propensity for complicated formulas and spreadsheets, fixed income investors often have a better idea of what’s happening in markets than just about anyone else. So, when Jay Sivapalan, one of the most respected fixed income managers in the country talks about the future of the Australian economy, interest rates, and housing, you can be sure there’ll be some outstanding insights. This conversation was no exception. In this week’s episode of The Rules of Investing podcast, we hear why investing is so different today to when he joined the industry 20 years ago, and he shares his views on what could lie ahead over the next 12 months.

Guest: Jordan Eliseo, Perth Mint. Headlines in recent weeks have touted an about-turn by Warren Buffett as he finally bought gold after years of criticising. But is that really what happened? In this week’s episode of The Rules of Investing podcast, I spoke to gold expert Jordan Eliseo, Manager of Listed Products and Investment Research at the Perth Mint. He points out that it was a gold mining company (Barrick Gold), not physical gold itself that Berkshire Hathaway purchased. “They’ve bought a gold mining equity, which, to me, is entirely consistent with their mandate. It’s not surprising to me that they’d buy a gold mining company.” We also discuss gold's strong performance this year and whether it can continue, and he shares some indicators that should tell us when the bull market in gold is getting long in the tooth.

Guest: Sam Granger, Totus Capital Whether you’re investing in ASX small caps, global large caps, or somewhere in between, one challenge that all investors face is how to narrow down a huge universe of potential companies into a manageable list for research. Sam Granger, Portfolio Manager at Totus Capital, knows this challenge all too well. With a small investment team, the Totus High Conviction Fund covers small and large cap companies both in Australia and overseas. One strategy he uses to narrow down the field, is the draw on the research of other great investors. “We always do our own research, and I’d never buy a stock just because they bought it. But why not focus on businesses that other great investors have already said they like? Apple’s a great example. Buffett bought Apple in 2016… You could’ve made three or four times your money just by following Buffett into Apple.” In this episode, we discuss why he doesn't engage in short selling, and he shares two stocks that appear to be underappreciated by the market.

Guest: Andrew Mitchell, Ophir Asset Management. In recent years, there's been an increasing trend of successful Australian businesses expanding offshore. In prior decades, offshore expansion attempts had rarely gone well. But now, Australian businesses ranging from fintech to retailers have seen their fortunes grow overseas. Andrew Mitchell, Director and Portfolio Manager at Ophir Asset Management, says one key reason has been the falling costs building a brand overseas. While once, a huge team of marketing and salespeople would’ve been required to launch a brand offshore. But today, this can be done with a small team using Google or Facebook ads. In this podcast, Andrew tells us how identify these offshore growers, why A2 Milk could double, or even triple its market share, and he gives us an update on his #1 stock for 2020.  

Guest: Troy Angus, Paradice Asset Management. Investors ask themselves many different questions when considering an investment thesis; how fast can the company grow? How expensive is it? How good are the management? But one question they general fail to consider is, 'am I wrong?' Troy Angus, Head of the Australian Equities Fund at Paradice Asset Management, says it’s important for investors to always consider the counter factual. “When a stock goes up, and you don’t own it, prima-facie, you’re wrong. You should be constantly reassessing the investment case and wondering, ‘what did I get wrong here?” This is a question they were forced to ask themselves again recently, as expensive technology stocks on the ASX have continued to rally. Hear the rest of the story in this week’s episode of The Rules of Investing podcast. He also shares one thematic that’s a major beneficiary of recent policies, and his preferred exposure to that theme.

Even at the best of times, building a new portfolio from nothing is a challenging task. But for Chris Stott, Chief Investment Officer at 1851 Capital, the challenge was truly unique. After a 12-month break from the industry, he raised $80 million for his new firm (including a chunk of his own money) in late 2019. February 1st looked like a good time to start investing, given his track record of outperforming during reporting season. For the first three weeks, everything was business as usual. But in the final week of February, fear took over as reality sunk in for markets. In this week’s episode of The Rules of Investing podcast, Stott tells us how he reacted to the changed market conditions, whether he thinks the worst has passed for markets, and he shares one Aussie small cap that's riding tailwinds from the COVID shutdowns.

Guest: Ben Cleary Portfolio Manager, Tribeca Global Natural Resources Fund. Soon after COVID-19 lockdowns were announced, central banks injected trillions of dollars of money supply into economies. This, combined with huge rescue packages from governments, lit a fire under financial assets, quickly sending them back towards (and even beyond) previous highs. One sector set to benefit from this money printing is precious metals, according to Ben. “The last real bull move for gold was following the GFC in the US, where there was around $3 trillion globally in stimulus. We’ve already had almost five times that amount in the last three months.” In this episode of The Rules of Investing Podcast, we also discuss a better alternative than lithium for getting exposure to the battery boom, and one little-known sector that could deliver big returns in the coming years.

In Australia, just 20 coal fired power stations remain operational today. That number is set to fall dramatically over the coming decade; by 2030, 55% of Australia’s coal-fired power stations will be over 30 years old, and many of them will be either retired or scheduled for retirement. This creates a massive opportunity for investors, who can benefit from the stability, income, and capital growth that comes with investing in renewable energy.  Sam Reynolds, Managing Director of Octopus Investments, is well familiar with this opportunity, having managed the largest investment team in Europe dedicated to renewable energy. He returned to Australia in 2018, seeing the massive opportunity here. With such a large portion of our power generation requiring replacement, someone needed to fund the investments.  "You're removing 85% of the supply in the market. To replace that 85%, you're looking at about $170 billion to $200 billion of new energy investments required in Australia." In this episode of The Rules of Investing podcast, Sam busts the myths that renewables are expensive and unreliable, and he explains why coal-fired power stations must be replaced regardless of climate change concerns. 

Working as an analyst on Wall Street, Qiao Ma, Portfolio Manager at Cooper Investors, had the privilege of meeting legendary hedge fund manager, Julian Robertson. Qiao worked at Coatue Management, one of the famous “Tiger Cubs” that spun off from Tiger Funds Management. It was an incredible experience to be grilled by Julian about a stock, but she warns that it was important you’d done your homework. “Julian had an unspoken rule, if you cover a stock, or you pitch a stock, you better know more about that stock than anyone else in the world.” Today, she applies that same principle with her own analysts. In this episode of The Rules of Investing podcast, we discuss her experience in China at the start of the COVID-19 outbreak, how one of her first investments saw 15% of its value evaporate overnight, and some of the exciting opportunities she's seeing throughout Asia today.

Michael Frazis, Founder and Portfolio Manager at Frazis Capital Partners, is positive about the outlook for equities. Despite the obvious challenges the world faces, a combination of monetary and fiscal stimulus, and economies that are beginning open back up, should present a perfect setup for growth equities. But that doesn’t mean investors can be blasé about what they buy. He warns that in some popular sectors, the prices have gotten too high in some names. “Even in the hottest parts of the market, where there’s companies trading on 25-35 times sales or more, there are companies trading on a tenth of that. I think it’s extraordinarily important now to dodge some of those companies.” In this episode, we discuss why he's so bullish right now, some new additions to his portfolio over the last two months, and why he was buying Afterpay as the stock fell in March.

Guest: Sean Fenton, Sage Capital In response to the COVID-19 shutdowns, governments and central banks around the world have embarked on an enormous monetary and fiscal experiment, the scale of which has not been seen before. In the space of a few weeks, the US Federal Reserve added more to its balance sheet than the entire period between 2009 and 2014. Meanwhile, additional spending measures combined with falling tax receipts are expected to see the US deficit soar to US$3.8T in 2020, almost 20% of GDP. But in the face of this massive stimulus, demand has fallen off a cliff, the economy has stopped, and unemployment has spiked to 1930's levels. Sean Fenton from Sage Capital says we're seeing a massive tug of war between liquidity and economic fundamentals, and it's not clear yet which side will win. "This is an experiment that has no defined end point for how it turns out, just a range of possibilities. Those possibilities are very wide, and can have some divergent outcomes." But what are the implications of all this for markets? And how are investors supposed to position for such an environment? We discuss this in the latest episode of The Rules of Investing podcast. He also tells us about his highest conviction investment right now, and shares his view on whether we'll see a new high, or a new low first.

Guest: Chris Rands, Portfolio Manager, Nikko Asset Management One of the biggest questions on many investors’ minds in recent weeks has been, just how bad will the economic contraction be? But Chris Rands, Portfolio Manager for the Nikko Australian Bond Fund, says this isn’t the question to focus on. Instead, the focus should be on how long the downturn will last. “It’s going to be weak. We all know it’s going to be weak. You take a quick walk around outside and you’ll see that absolutely nothing is open. If it’s down 5, 10, 15 percent, nothing would really shock me. It’s more important to say, “how long is it going to last?”” In this episode of The Rules of Investing podcast, Chris speaks to us about the stability of Australia’s financial institutions, when he first realised that COVID-19 presented a material risk to markets, and how the crisis has affected his view on Australian housing.

Guests: Sam Sicilia, Hostplus; Martin Thompson, Frontier Advisors. The ASX200 has collapsed by more than 20% in just three weeks since COVID-19 went global. When markets fall so far and fast, it induces a state of panic for many investors. In this episode of The Rules of Investing, I sit down with two very special guests to get their take on the current situation, and to hear what we could lay ahead. The first is Sam Sicilia, Chief Investment Officer of Hostplus. With more than $50 billion of funds under management and one million members, Hostplus is one of Australia's largest superannuation funds. Under Sam's guidance, Hostplus has become the top performing super fund in Australia over 10 years, according to Superguide. Also joining us is Marty Thompson, Senior Consultant at Frontier Advisors. After studying science in his undergraduate degree, Marty undertook PhDs in Molecular Cell Biology and cancer research. He's also worked as a research scientist and teacher in virology at Murdoch University. Since starting his Masters of Applied Finance, Marty has worked as a Commercialisation Analyst at Melbourne University, and an Investment Analyst at Starfish Ventures, a leading venture capital firm focused on biotech startups. In the first part of the episode, we discuss the disease itself, including what we know and don't know, and how the spread of the disease could play out from here. We then turn to discussing the effects that the disease and associated disruptions could have on the real economy. Finally, we discuss the effects on financial markets and individual investors.

Guest: Mike Hill, Managing Director & Portfolio Manager, Bombora Group. Investors who bought into Afterpay’s 2016 IPO have had great returns, seeing their investment appreciate by more than 33 times in under four years, even after the recent sell-off. But for investors invested in Afterpay’s pre-IPO round less than a year earlier, they’ve seen far great returns – well over 100 times. Traditionally, pre-IPO investing has been restricted to institutions or venture capital funds with long lock-up periods due to the illiquidity of the underlying investments. But Mike Hill, Managing Director and Portfolio Manager at Bombora Group, takes a different approach. By investing in both private and publicly listed companies, they’re no longer subject to the same level of illiquidity. In this week’s episode of The Rules of Investing podcast, we discuss some of the similarities and differences between working in private markets and public markets, one unknown company that he believes could one day be a large cap, and we take a dive into a case study of an ASX-listed company he's taken from private to public.

Guest: Anthony Aboud, Perpetual Investments. At some point in their lives, most people have lusted after a dream item, but been unwilling or unable to justify the price tag. Whether it’s a car, jewellery, or luxury holiday there's a point at which the price is too high to justify. But then, the retailer suddenly announces a big sale that brings it within reach. Buying stocks is no different. Quality comes at a price, but occasionally the entire equity market goes on sale - allowing you to snap up your dream stocks at a discount. In this week’s episode of The Rules of Investing, Anthony Aboud from Perpetual shares two companies that he’d love to buy the next time stocks go on sale. We also discuss his large overweight position in Commonwealth Bank, what he looks for in a compelling short candidate, and the company results he’s most interested to read this February.

For the best part of a decade now, income hungry investors have battled to find a decent yield. Thankfully, the capital gains from falling rates have offset the lack of income. But with rates around the world close to zero, it seems there’s limited room left for more capital gains. Let me share an example. According to the ATO, the average super balance for a 65-74-year-old man is $446,800. Meanwhile, the average super balance for a 65-74-year-old woman is $378,600. So, let’s say our couple has a combined super balance of $825,200. Quite a healthy nest-egg. But with term deposit rates at around 1.75%, that will produce just $14,441 of income over the course of a year. It should come as no surprise then that private credit, with its chunky yields, has seen a boom in popularity in recent times. Once purely the domain of institutional investors, these products are increasingly available to retail investors through listed structures on the ASX. Offering returns in the mid-to-high single digits, they attract a premium for the higher risk nature, while generating additional fees from deal origination. Andrew Lockhart, Managing Partner of Metrics Credit Partners, has been a pioneer in this sub-sector in Australia. He worked for decades at a Big Bank on these deals, and then nine years ago decided to start Metrics with his business partners. In this week’s episode of The Rules of Investing, we discuss how the GFC shaped his investment philosophy, how Australia's big banks have changed the way they’re funded, and the sectors he'd be avoiding if the market closed for 5 years.

The last 40 years in financial markets have been heavily influenced by a very important factor: falling interest rates. A look at the 10-year US bond yield shows that it peaked in '81 at around 16%, and since then it's been a steady march lower, seemingly inevitably marching towards zero. According to Paul Moore, founder and Chief Investment Officer at PM Capital, this trend has now passed an inflection point. Rates have bottomed in the US and Europe, and inflation might not be as far away as many expect.    "You're slowly seeing the conditions put in place for inflation to be underpinned. Every central bank wants to create inflation. Ultimately, they'll get what they asked for. They might not want it when they finally get it, but they will get it...   He believes that this trend will have far reaching implications across all asset markets, but for equity investors it means that the types of investments that have worked well in the past, won't in the future. And likewise, some investments that have been out of favour, could be due for a comeback.    Tune in to the latest episode of The Rules of Investing, presented by Livewire Markets, to hear his take on which assets are set to benefit and which will suffer. 

Angie Ellis might not be a 'household name' among investors, but she's racked up quite a track record since she started 8020 Investments about five years ago. See, Angie is a regular entrant to the Fairfax share tipping competition, published in The Age and the Sydney Morning Herald each week. And of the seven times she's entered the competition this year, she's won it five times, and came second twice. This is no fluke either, she's consistently been the top performer over several years.    So for my last podcast for 2019 (this was recorded in December), I decided to change up the pace, skip the fund managers, and talk to one of Australia's most successful private investors.    We discuss how she transitioned from a part-time to a full-time investor, and how it's affected her portfolio; her strategy for the tipping competition, and how to compares to her personal portfolio; and she discusses some of the companies that have been key to her success. 

The Australian team at Fidelity International often draw on influence of legendary Fidelity fund manager, Peter Lynch. But one area that the approach hasn't always worked has been store rollouts. Lynch famously loved a good store rollout as it was predictable growth with limited risk. As Kate Howitt, Portfolio Manager at Fidelity International explains in this week's podcast, this approach runs into a problem in Australia: "If you try to put that into the Australian market there's a bit of a problem. That is that by the time you're large enough to list, you're probably about halfway through rolling out stores, because our market is so small." Her approach instead, has been to look for great Australia consumer brands and retailers that can roll their product or store out overseas. In this episode of The Rules of Investing, she shares her thesis on two of these companies. She also discusses her quest to understand what makes a great company, and explains a strange anomaly being created by the combination low rates, easy money, and passive investing.  

After two years on the air, The Rules of Investing marks its 50th episode with a very special guest; Hamish Douglass, co-founder, Chairman, Chief Investment Officer, and Lead Portfolio Manager of Magellan Asset Management. In this exclusive, in-depth interview, Hamish opens up about several topics that he rarely discusses. We hear about the first investment he ever made, how he invested his entire personal wealth in a single asset (and why it was so successful), and some of the challenges he faced in the early years of Magellan. He also discusses what it would take to see a pick-up in inflation and how likely he thinks that scenario is, why he’s confident owning US-listed Chinese mainland companies, and the big investment trends he expects to succeed and fizzle out over the coming decade. Tune in below for this special episode.

  While most investors focus on picking stocks to drive performance, in reality, this is just a part of it. Research has proven that over the long-term, 85% of your return is determined by nailing your asset allocation, i.e.: the right mix equities, bonds, alternatives, property and cash for your goals.  In the final part of this three-part mini-series aimed at new investors, I sit down with Andrew McAuley the Chief Investment Officer for Credit Suisse Private Bank in Australia.  Bringing it all together to complete this series, Andrew succinctly explains what asset allocation is and why it is important to get right. This was an enjoyable interview with an industry luminary, and I hope you find it as useful as I did interesting. 

Equities form a core part of most long-term investment strategies; they offer strong long-term returns, but at the cost of higher volatility than many other assets. But how should investors think about their strategy in this important asset class? That’s the topic of this week’s podcast. In part two of this three-part mini-series, I sit down with Hamish Carlisle from Merlon Capital. Hamish is an excellent communicator, and has written some of my favourite pieces of stock analysis on Livewire this year. The goal is to provide the tools and the background needed to get started investing in equities. We discuss what makes a great equity investment, some important skills and concepts for new investors to learn, and he talks us through a current practical example of an investment that he thinks is materially undervalued.

Getting started as an investor is a daunting task. Even for experienced investors, information overload can be a problem, but for the new investor, it’s hard to even know where to look for a starting point. That’s the goal of this special mini-series; to provide a starting point for novice investors to begin their journey. In this first part of the series, we’ll be discussing issues around personal finance, goal setting, risk and reward, and setting yourself up to get started as an investor. In two weeks’ time, we’ll do a special episode on equity analysis, that I hope will provide the tools required to begin analysing stocks. Finally, we’ll do an episode about portfolio construction and asset allocation – one of the most underappreciated aspects of investing. If you’ve got any family members or friends that have been asking you about investing, then this is for them. Please consider whether you know anyone who might benefit from this content, and send it their way. This week’s guest is Phil Richards, Director and Wealth Advisor at Endorphin Wealth, and Founder of Smart Home Deposit, an online tool to help first home buyers save for a deposit.

Guest: Anton Tagliaferro, founder and Investment Director at Investors Mutual. Just like in life, an investor’s early experiences can’t help but shape the way they see the world. For Anton Tagliaferro, founder and Investment Director of Investors Mutual, one of those early formative experiences was the infamous ’87 stock market crash. After witnessing the events in New York the night before, Anton and his team tried to guess how far the ASX would fall that day, but even the most bearish analyst in the group was not prepared for the 25% crash that came when the market opened. “It taught me a very important lesson; on the day of a crash such as that, everything falls. In a crash, everything falls. The good, the bad, and the ugly. But when sanity prevails and the panic subsides, which it does eventually, people do go back to the stock market, but it’s the good stocks that recover. A lot of the crap, all the froth and bubble, which in the boom was in the headlines all the time, a lot of that stuff goes to nothing.” In the latest episode of The Rules of Investing, we discuss his current views on Australian banks and retailers, how he first developed IML's investment philosophy, and why he doesn't like the ‘value versus growth’ argument.

In Australia we’re fortunate to have some very talented women in funds management. Catherine Allfrey is one of them. After a chance encounter at a Wesfarmers event in the late 90s, Catherine was recruited to Colonial First State by Greg Perry – a true ‘Master of the Market’. This time working with Perry helped to shape her investment philosophy, which seeks to identify those companies that can grow their earnings at a rate higher than GDP. Catherine formed Wavestone Capital in 2006 with her business partners Ian Harding and Graeme Burke with Raaz Bhuyan joining 2014. Today Wavestone manages ~$4.8 billion for institutions and retail clients. In this video, Catherine discusses the attributes of companies with superior DNA, shares her view on sectors experiencing tailwinds and explains how she is working to bring more women to investing in Australia.

Guest: Donald Amstad, Aberdeen Standard Investments. Developed economies are at a crisis point, the powers of unconventional monetary policy are exhausted, and markets are just beginning to wake up to this. That’s the sobering assessment on the current state of the global economy delivered by Donald Amstad from Aberdeen Standard Investments His view is that when developed markets finally crack, there will be serious implications for every asset class and economy. However, those economies where monetary policy remains relatively ‘normal’ will be those best placed to respond. In his view, the emerging markets have more levers to pull when compared to developed markets, where the money printing taps have been turned on and interest rate settings are near zero. The irony is that during the Asian crisis it was the IMF and central bankers from developed markets that convinced the emerging market governments not to print money and ‘take their medicine.’ Amstad says that this was a cathartic process for these economies, and they are now looking on in bewilderment as the West has resorts to money printing of an unprecedented scale.

Guest: Joe Magyer, Chief Investment Officer, Lakehouse Capital. Moving to a new country is no easy task, but doing it while managing a portfolio, completing the exams for the Chartered Financial Analyst designation, and dealing with the challenges of parenthood is truly Herculean. That, however, is exactly what Joe Magyer, Chief Investment Officer of Lakehouse Capital, was doing in his first years in Australia. How did he manage all this? As it turns out, saying “no” can be a critical skill. And not just in time management either, Joe says “no” to a lot of new investment ideas too. "I've had analysts start before and I've told them, 'look, there's a really good shot that I'm gonna say no to every idea you pitch for the first year. Don't take it personally, you're probably doing really good work, it's just that I'm really choosy.'" In this week’s episode of The Rules of Investing podcast, he tells us about the similarities and differences between Aussie small caps and global growth stocks, which global tech stocks will continue to grow and whose stars will fade, and why Visa’s new payment splitting function doesn’t pose a significant threat to Afterpay.