Explore every episode of the podcast The Rules of Investing
| Title | Pub. Date | Duration | |
|---|---|---|---|
| The secret to finding stocks you can hold for 20+ years | 13 sept. 2024 | 00:48:59 | |
While Warren Buffett's favourite holding time may be forever, the average holding period for a typical investor is now just 5.5 months. In a world where news, analysis and investment ideas are readily available at our fingertips, investors have quickly forgotten the benefits of long-term compounding and instead are focused on the next great stock, driven likely by their fear of missing out.
We've all succumbed to it, there's no point denying it. How many of us jumped on the buy-now-pay-later trend, the lithium trend, the uranium trend, and now, the AI trend, as stocks soared to stratospheric heights? How many of us have attempted to hold on for dear life (HODL) as some of these companies crashed back to Earth?
So, how can you identify the companies that continue to win over the long term? And by long term, I don't mean five-plus years, but 20.
In this episode of The Rules of Investing, Janus Henderson's Josh Cummings outlines what makes a winning long-term stock - a process that has helped the team top the league tables for their consistent outperformance over the last five and 10 years - and provides a few examples.We also take a deep dive into artificial intelligence - and why Cummings believes AI will become even larger, more pervasive, and more impactful on our lives than we could ever conceive of today.
https://www.livewiremarkets.com/wires/the-secret-to-finding-stocks-you-can-hold-for-20-years
Timecodes
0:00 - Intro
2:16 - The secret to consistent long-term outperformance
3:30 - What the team got right and wrong over the last 12 months
4:38 - The impact of AI on mega-cap tech companies
7:19 - Is there too much "faith" in the AI theme?
9:48 - Is this the death of value investing?
11:58 - What it's like on the ground in the US right now
15:14 - Impact of cumulative inflation on businesses
18:13 - Nvidia's antitrust charges
20:42 - Factors that can help investors identify consistent winners
22:58 - Celebrity CEOs and red flags
25:20 - Should you really HODL?
26:58 - Smaller companies employing disruptive innovation
31:13 - Lessons from the team's meeting with OpenAI CEO Sam Altman
33:49 - Innovation is a scale game - why the big are only going to get bigger
35:01 - What could go wrong with AI (i.e. are we in for an iRobot scenario)
40:22 - Two things investors are getting wrong today
42:36 - Why you should invest in what you know (and trust your gut)
46:45 - One stock Josh Cummings would own if the market closed for 5 years
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| Australia has all the ingredients to become a superpower in this space | 06 sept. 2024 | 00:36:53 | |
Nowadays, it’s quite easy to get swept up in the negativity around our economic plight. Living costs are a very real concern, as are increasingly unaffordable house prices. But, as Australians, we’re also quite fortunate. Our economy has enjoyed an unprecedented run of growth, we’re highly educated, we’re resource-rich, and we have opportunities – one of which lies in energy creation. As Darren Brown, Co-Managing Director, Renewables Australia at Octopus Investments tells it, there is “a really unique opportunity for Australia to become a superpower in renewable energy”. The conversation highlights the transformative changes in the energy sector, the strategic initiatives underway, and the opportunities for investors in the renewable energy market in Australia. Brown's unique perspective, gained from his experience in both fossil fuels and renewables, provides valuable insights into the industry's evolution and the potential for long-term growth in the renewable energy space. Note: This episode was recorded on 29 August 2024. | |||
| What happened to that recession we were promised? | 30 août 2024 | 00:36:46 | |
In 1990, then-Treasurer Paul Keating famously said that the country's economic downturn was the “recession that Australia had to have.”
Although Keating was responding to a poor GDP print and doing his best to control the narrative, at the start of the rate hiking cycle in mid-2022 most in the market spoke of an impending recession with almost as much certainty. As it stands today, said recession is yet to materialise. So, what happened? And perhaps more importantly, what does it mean for investors? In explaining why a recession hasn’t occurred, Sebastian Mullins, Head of Multi-Asset, Australia at Schroders points out that both the Australian and US governments pumped money into their respective economies—something we hadn't seen in a long time. “During the GFC, you had targeted programs to bail out banks and stimulate the economy, but on average, you had a very, very loose monetary policy and very tight fiscal policy to preserve balance sheets – i.e. improve the fundamentals of both corporate and government balance sheets”, says Mullins. “This time around, it's the reverse. We're hiking rates but the government's stimulating aggressively. So that has offset quite a bit of it”, says Mullins. Regarding America, where most of the recession indicators have been flashing red, Mullins adds that the US went into the current downturn un-levered – at least compared to previous episodes. “If you think about what the pillars of the economy are, you have the consumer, you have corporates, and you have the government”, notes Mullins. The US consumer de-levered after the GFC, reducing their amount of debt to GDP, as did corporations. “You'd expect higher interest rates to crack corporates”, says Mullins, but that hasn’t happened. And while the government has been hurt by higher rates due to the bigger interest payments on its debt pile, “If the two pillars of the private economy are fine and the corporates are all fine, then there's no recession”, says Mullins. Great, no recession. What about inflation?For Mullins, the inflation conversation depends on how far into the future you look. “So in the short term, inflation's definitely coming down,” says Mullins. As for the next five years and beyond, Mullins believes there are structural forces that will mean inflation could stay above the long-term targets of central banks – although that doesn’t have to be a bad thing. “There are more inflationary forces in the system now than they were over the past decade” notes Mullins, adding that “things like fiscal stimulus that's here to stay”. “You're seeing more populous governments come in around the world. You're talking about the election in the US, they're both going to spend. "It doesn't matter who wins, it just depends on who they spend on. But there's no tea party candidate or fiscal conservative”, says Mullins. Mullins points to other inflationary factors, including de-globalisation, on-shoring, and increased security spending—whether that means military, food, mineral, or cybersecurity. “So all that is to say, we're not saying we're going to 1970-style inflation, but if in the US 2% was the ceiling of inflation for the past decade, we think it's going to become a floor. So, it might be between two to three, maybe two to four [percent]”, says Mullins. So, how are you investing?A potentially higher floor for longer-term inflation seems like a small price to pay following the most aggressive rate-hiking cycle in living memory. If someone offered the current economic and investing scenario back in late 2022 and early 2023 – with equity markets near all-time highs, bonds providing a decent yield, and an absence of recession – we’d all likely take it in a heartbeat. So, as a multi-asset strategist, how is Mullins shaping portfolios in light of macro developments and a seemingly benign backdrop? Find out in this edition of The Rules of Investing, presented by James Marlay. Mullins provides a view on Australian, US, Chinese and Japanese equities, bonds, and Australian vs. US credit. Finally, he outlines the bull case moving forward as well as the biggest risk to the outlook. Note: This episode was recorded on 27 August 2024. https://www.livewiremarkets.com/wires/what-happened-to-that-recession-we-were-promised | |||
| Why AI will have a bigger impact on the world than the invention of electricity | 16 août 2024 | 00:41:59 | |
In this episode of The Rules of Investing, Livewire's Ally Selby learns about some of the companies that meet these criteria, why Rizzo believes AI will be far more transformative than investors currently think, as well as why he believes that investors are likely to do more harm waiting for a correction in some of these tech winners than a correction itself. Plus, he shares what he is seeing on the ground in the US right now in terms of economic weakness, the stocks he believes are worth paying up for right now, and how he takes advantage of sell-offs when he holds very little cash. Note: This episode of The Rules of Investing was recorded on Wednesday 14 August 2024. https://www.livewiremarkets.com/wires/why-ai-will-have-a-bigger-impact-on-the-world-than-the-invention-of-electricity Timecodes:
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| Why trying to time small caps is a "big waste of time" | 08 août 2024 | 00:42:18 | |
Much has been made of the “Great Rotation” of late and the move away from highly concentrated large caps into small-cap equities, particularly in the US. Greg Dean, founder of Langdon Equity Partners, is having none of it. When quizzed about whether the rotation was impacting how Dean and his team invest, the short answer was ‘no’. Late last year, amid widespread commentary about 2024 being the ‘year for small caps’, Langdon wrote about the time and energy people spend talking about timing in small caps and called it a “big waste of time”. Dean feels a similar way about the rotation. “The reality is if you wait for the perfect time, you've probably missed out on a lot of opportunity during that period when fewer people were interested”, says Dean. Dean founded Langdon in 2021 on the concept of a “clean sheet of paper” – i.e. not being beholden to anyone but investors. His philosophy is built on deep research and holding management to account, allowing him to ‘trust but verify’. He adds that speaking with management is a delicate balance that is often “executed poorly”. “You think you have to be aggressive and definitive or you have to be a “yes” person and agree with everything that they're telling you, and neither of those is optimal”, says Dean. In the following episode of The Rules of Investing, Dean delves deeper into small-cap investing, explains why he and his team take more than 300 individual company meetings each year, talks through the current portfolio tilt, and shares why the fund favours Europe over the US. He also upacks two global small-cap stock ideas that highlight Langdon’s approach. Note: This episode was recorded on 31 July 2024. You can watch the video or listen to the podcast below. https://www.livewiremarkets.com/wires/why-trying-to-time-small-caps-is-a-big-waste-of-time-and-2-long-term-stock-ideas Timecodes0:00 - Intro 1:36 - Investment background and founding Langdon 5:05 - Biggest influences over the journey and why small caps? 8:39 - Investment philosophy origin story 11:01 - When is enough, enough? 12:45 - The Great Rotation and current market conditions 15:31 - Company meetings how the best stand out 20:09 - Honing the craft 23:42 - Current portfolio: underweight US, overweight Europe 26:58 - Why cashflow is Landon's North Star 28:07 - Other non-negotiables 29:12 - Testing beliefs 30:40 - Navigating patience as a small-cap investor 32:57 - Small-cap stock ideas 37:52 - What are investors getting wrong about today's markets? 49:27 - Courage of conviction 41:29 - The five-year stock
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| How to dominate small caps like Roger Federer dominates tennis | 02 août 2024 | 00:20:14 | |
In tennis, just as in investing, it's the points that you win that matter. After all, Roger Federer played 1,526 singles matches throughout his career, and while he only won 54% of the individual points within those matches, he walked away with the win 80% of the time. Ausbil Investment Management's fresh-faced co-head of emerging companies, and portfolio manager for its small and micro-cap strategies, Arden Jennings, is focusing on just that. "Stocks are just points. But it's the points that matter that win you the game. So for us, our largest detractor was still smaller than our 17th biggest winner. Even though we had an even spread of winners and losers, it was the ones that were successful that made it a good year," he says. And a good year it was. The Ausbil MicroCap Fund returned 33.53% in FY24, while its Australian Small Cap Fund delivered investors a nice 25.73%. Since inception, these funds have returned 20.08% (since February 2010) and 24.17% (since April 2020), respectively. So, where is the Roger Federer of Australian small caps seeing the most opportunity today? You'll find out in this episode of The Rules of Investing. Note: This episode was recorded on 30 July 2024. You can watch the video or listen to the podcast below. Timecodes:
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| 30-year property veteran: Australia has its head in the sand on housing | 19 juil. 2024 | 00:39:31 | |
There's no supply in residential housing nor the majority of segments of the commercial real estate market. Sky-high construction costs are now too prohibitive. Bandaid solutions, like rent control, only backfire. And inconsistent state, federal and local policies are not helping either. That's according to this week's guest on The Rules of Investing, Andrew Parsons, a founder and the chief investment officer of global listed real estate manager Resolution Capital. While these factors continue to perpetuate Australia's housing problem, they are actually positive for long-term investors in real estate. In this episode of The Rules of Investing, Parsons dives into Australia's property problem, outlines what he believes to be the solution, and shares why listed property is in for a strong three to five years ahead of us. Note: This episode of the Rules of Investing was recorded on Wednesday 17 July 2024. Timecodes
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| 3 compelling long-term ETF ideas for investors still on the sidelines | 05 juil. 2024 | 00:43:40 | |
Investors are too focused on interest rates and are subsequently underweight risk assets. That’s the, albeit US-centric, view from Global X ETFs’ Head of Investment Strategy, Scott Helfstein. He elaborates by saying that the US economy is looking a lot more like mid-cycle expansion than late cycle and that “you don’t want to be sitting on the sidelines”. A fan of thematic investing, Helfstein goes on to highlight three big investment themes that he likes right now, including one offering the opportunity for true transformation, that’s available for the same price as the S&P 500. Don’t miss the latest Rules of Investing Podcast.
Timecodes 0:00 - Intro 1:12 - A unique background for an investment professional 7:17 - The current state of geopolitics 12:00 - Australia's position in the global landscape 14:10 - The appeal of thematic investing 16:42 - Where is the puck going? 22:53 - Sectors versus themes 26:48 - The role of thematic investing in a portfolio 28:46 - Nothing but ETFs? 30:27 - Ranking the big themes 34:22 - A theme that is flying under the radar 36:40 - Risks in thematic investing 38:32 - Mama's favourite son 39:49 - What are investors getting wrong? 41:07 - One theme for the next five years | |||
| More please! Dr Don Hamson’s cure for the 'disappearing dividends' on the ASX | 28 juin 2024 | 00:39:14 | |
Fully franked dividends are a prized asset of the Australian market. While the lack of growth is often lamented, plenty of self-funded retirees are content to dine on the distributions of Australia's big miners and banks. And who can blame them - high commodity prices, particularly in iron ore and lithium, resulted in record dividends from the top end of town. However, after peaking in 2021 and 2022, dividends from mining companies are steadily declining. Research from Commsec published late in 2023 showed that the 12-month forward dividend yield for the ASX200 has been below the long-run average of 4.7%, and dividend per share estimates have been cut by 14 per cent. The good news is that Australian banks have been increasing their dividends whilst also enjoying surging share prices. There is also a long list of consistent dividend paying stocks that often fly under the radar. In this episode of the Rules of Investing, Livewire's James Marlay speaks with Plato Investment Management's Dr Don Hamson to get his diagnosis on the case of the 'disappearing dividends'. Hamson insists that diversification remains a free lunch for investors, especially for those seeking stable and consistent returns. He also emphasizes that fully franked dividends continue to stack up as the backbone of an income-generating portfolio. Timecodes:
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| Recession a line ball as Australia groans under a massive debt load | 14 juin 2024 | 00:28:07 | |
This time last year, PIMCO Portfolio Manager Adam Bowe told Livewire that there was a 50/50 chance that Australia would slip into recession. March GDP figures show that the economy grew at just 0.1 per cent, the slowest rate since December 2020. Today, Bowe says interest rates are sufficiently restrictive, and the chance of recession remains a ‘line ball’. In this episode of The Rules of Investing, Bowe explains why interest rates in Australia don't need to go higher, why house prices have been immune to interest rate increases and where he is finding the best income opportunities right now.
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| Rudi: AI is the end of investing as we know it | 31 mai 2024 | 00:52:33 | |
While "survival of the fittest" certainly applies to the Earth's abundance of flora and fauna, it may be time for investors to take a page out of Darwin's book.
That's according to FNArena's Rudi Filapek-Vandyck, who believes the market has irreversibly changed since 2014 - as has the way investors should value stocks.
In this episode, Rudi outlines why he believes technological innovation will transform the market as we know it. He also discusses some of his favourite ASX-listed stocks to play the AI theme, the importance of quality companies in today's markets, and what it takes for a company to be an all-weather stock.
Note: This episode was recorded on Wednesday 29 May 2024. Note #2: Ally was today years old when she learnt what R.E.M. is, she apologises for any harm her ignorance may have caused hardcore fans. If it's any excuse, the song was released seven years before she was born.
https://www.livewiremarkets.com/wires/rudi-ai-is-the-end-of-investing-as-we-know-it
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| The investment secrets of Australia's billionaires | 23 mai 2024 | 00:25:24 | |
There seems to be no stopping Australia's ultra-wealthy, with the number of billionaires down under growing by 14.4% over the past 12 months, to a record 159 people. For some context, in 2020, this number was 117, according to The Australian. While it's wonderful to daydream about what you would buy or do with a few billion dollars, the true secret success of the ultra-wealthy is their ability to stay that way. After all, how many stories have you read of lottery winners squandering their newfound wealth just a few short years later? So, how do the other half continue to grow their wealth? To find out, Livewire sat down with MRB House's Peter Magee and Walsh Capital's Louise Walsh for their insights into how Australia's ultra-wealthy invest as part of Livewire's Undiscovered Funds Series. They share their tips and tricks for identifying "exceptional" funds, outline the factors that are important to their processes, share what to do when a fund isn't performing as expected, and name one recently launched fund that has impressed in recent years. Note: This interview was recorded on Wednesday 15 May 2024. https://www.livewiremarkets.com/wires/the-investment-secrets-of-australia-s-billionaires | |||
| 700+ meetings each year: How WAM Global uncovers under-the-radar stocks | 17 mai 2024 | 00:32:33 | |
In investing, just as in love, trust is everything - and without it, you really don't have anything at all. It's for this reason that the Wilson Asset Management global equities team meets with more than 700 management teams across the world each year - including in the US, Japan, and Europe. In addition, they also meet with competitors and suppliers, as well as talk to current and past employees and industry experts. According to WAM Global (ASX: WGB) lead portfolio manager Catriona Burns, the team does this because trust in a company's management team is paramount. "Have they hit their targets? Have they done what they said? If we have any doubts on that trust factor, for us, that's completely a non-negotiable and we won't invest," she says.Burns is reading between the lines, and looking beneath the surface for red flags. And while management teams selling stock, poor track records and value-destructive deals can certainly be warning signs, she argues that alignment - and the lack thereof - can often be far more telling for the future direction of a company's share price. "Incentives drive outcomes... I can't tell you how many times I have seen incentives for management based on earnings per share growth," she says. "Companies just chase acquisitions to meet earnings growth without thinking about the returns that are being generated on the dollars spent. That happens time and time again and is a massive red flag."In this episode of The Rules of Investing, Burns takes listeners through some of the companies that have managed to pass her filters, as well as why catalysts are so important for investors with a penchant for value. She also outlines why the listed investment company's growing annual yields won't be slowing over the next five years, what it's actually like on the ground in the US right now, as well as what the US election at the end of the year could mean for markets. Note: This interview was recorded on Tuesday 14 May 2024.
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| Chris Stott’s 5 high conviction stock ideas for the new bull market | 10 mai 2024 | 00:46:35 | |
Time flies when you’re having fun! While the last five years have had plenty of ups and downs, they haven’t dented the enthusiasm and passion of small-cap fund manager Chris Stott from 1851 Capital. Stott launched 1851 Capital in 2020, just before COVID-19 hit, wreaking havoc on the market and his portfolio. Since then, Stott has comfortably beaten his small-cap benchmark, growing the fund’s initial capital of $80 million to almost $500 million through a combination of inflows and capital growth. Whilst there was some exuberance after the initial shock of the pandemic, the past few years have been far more challenging for small-caps investors. “Over the past four and half years, the small-cap index has returned 3% per annum. If you look at the 30 years before we launched the fund, it was 10% per annum. So quite a significant underperformance, quite dismal in fact,” Stott says.However, late October 2023 marked a turning point and the small-cap index has recently entered a technical bull market, having rallied more than 20%. So where to from here and which companies does Stott believe can sustain the early track record that 1851 Capital has established? In this episode of The Rules of Investing, Stott shares his lessons from starting a new fund, why he believes the bull run in small caps can continue and five of the stocks he is backing to deliver market-beating returns. For those of you with a good memory, Stott was last on the podcast in June 2020, when he tipped NextDC (ASX: NXT) as the one stock he would hold if markets were to close for the next five years. Shares in NextDC have gained more than 75% over that time, and the company is now in the ASX100, forcing Stott to exit his position. Naturally, we’ve asked him for a fresh idea. Note: This episode was recorded on Wednesday 8 May 2024.
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| Christopher Joye: No margin for error for risk junkies craving rate cuts | 12 avr. 2024 | 01:02:19 | |
The past six months have been golden for investors, with everything from equities to gold and even Bitcoin enjoying stellar runs. And if risk assets are not your bag, then there have been juicy yields on offer across a range of cash and fixed-income asset classes. Animal spirits woke from their slumber in late October 2023 when the Fed effectively claimed victory in the fight against inflation. Markets have been led to believe that rate cuts are a forgone conclusion in the year ahead, and participants have been piling into risk assets accordingly. Christopher Joye, portfolio manager and chief investment officer at Coolabah Capital Investments, says that markets have become so complacent that they appear to be completely ignoring a growing set of data suggesting that the path forward might not be smooth. Most notably, the resurgent inflation data coming out of the US is causing interest rate cut expectations to be dialled back and kicked down the road. When asked what he thought investors were getting wrong about markets today, Joye was quick to call the dichotomy between what the economy is suggesting needs to happen with interest rates and market expectations. “If this strong data keeps coming through then hold onto your hats because the world is not priced for this risk. Make no mistake, there is no margin for error in listed equities. There is no margin for error in venture capital, private equity, zero in crypto, in commercial real estate, nothing,” Joye argued. Tune in to the latest episode of the Rules of Investing, where Livewire’s James Marlay ask Joye about his views on the outlook for both the US and Australian economies, the three risks he is watching and where he sees value in Australian residential real estate. | |||
| Why Ben Clark is taking profits on growth stocks (and where he's putting that money to work) | 11 avr. 2024 | 00:47:03 | |
Quality growth stocks, those with fortress balance sheets, impressive moats, structural tailwinds and top-notch management teams, have had a stellar run recently. Take Goodman Group (ASX: GMG) for example, which has risen 66% over the past year. Or Megaport (ASX: MP1), up over 252% in 12 months alone. If you're like this anonymous writer, you've probably started to ponder whether it's time to trim some of your winning positions and take some profits. And according to TMS Capital's Ben Clark, we may have just reached that point. "A lot of investors are trying to chase a very small number of stocks in Australia because of the AI trade," he says. "And I'd just be a bit wary about that because although those companies absolutely should benefit, it's just how quickly those benefits flow through and whether the market has just got a bit ahead of itself in terms of the benefits that will come through in the medium term."In this episode of The Rules of Investing, Clark sits down with Livewire's Ally Selby for a conversation on all things artificial intelligence, growth investing and holy grail stocks. He shares where he is putting some of the firm's dry powder to work, a few reasons why investors should feel optimistic about the outlook for markets, and whether he would be buying the AI behemoths both globally and locally today despite their stellar runs over the last six months. Plus, Clark shares why the tables may be turning once again for out-of-love growth darling CSL (ASX: CSL). Note: This episode was recorded on Tuesday 9 April 2024. Timecodes:
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| The next 10 years in ETF growth could be dominated by this asset class | 22 mars 2024 | 00:28:37 | |
If there is any one investment product that has experienced a true boom over the last 10 years, it is exchange-traded funds (ETFs) and exchange-traded products (ETPs) more broadly. The number of listed products has increased by 17.5 times in Australia during the last decade alone. More than 300 products are now listed across the ASX and CBOE exchanges and two million Australians have at least one ETF in their portfolio. And, as if you need more proof of the growth of ETPs, 2024 marked the first time that inflows outpaced those going into unlisted managed funds. So if we've seen this growth over the last decade, what could the next 10 years hold? In this episode of The Rules of Investing, we put this and other questions to Tamara Haban-Beer Stats, Director and ETF/Index Investments Specialist at BlackRock Australia. BlackRock is the world's largest asset manager and its ETF arm iShares runs 49 ETPs in the Australian market. In this episode, Tamara also discusses the key mega forces that BlackRock believes could drive markets over the long run, where they are overweight in portfolios and the asset classes they believe could see the biggest growth within ETPs over the coming years. Note: This episode was recorded on Tuesday 19 March 2024. Timestamps
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| Warryn Robertson’s guide to picking the best infrastructure stocks on the ASX and abroad | 14 mars 2024 | 00:39:15 | |
Warryn Robertson, portfolio manager and analyst at Lazard Asset management, understands the nuances of infrastructure assets like few others in the market. His approach is to find monopoly assets with inflation protected revenues, high margins and reasonable leverage then buy them at attractive prices. Of the 400 listed infrastructure stocks globally only 160 have passed the four filters and typically Lazard’s Global Listed Infrastructure Fund will own just 25 to 30 of those companies. Given the attractive nature of infrastructure assets it is unsurprising that sovereign wealth funds and private equity firms are also circling these assets. Robertson estimates that of the 160 stocks that meet his criteria 25 have been taken private and delisted. The situation in Australia is even more challenging, of the 14 infrastructure and utility stocks on the ASX valued at more than $1 billion just four meet Warren’s criteria as being ‘preferred infrastructure’. The good news is that Robertson is a firm believer and concentrating your capital into your best ideas. In this episode of the Rules of Investing, Warryn Robertson reviews the recent performance of that asset class through an inflationary environment, explains why US utilities look vulnerable and shares what he believes are the best opportunities in infrastructure. Robertson also reveals what he regards as the top infrastructure stock on the ASX and an infrastructure company with an absolutely stunning earnings outlook. | |||
| The policy overhaul Shane Oliver would make to secure Australia's fortunes | 01 mars 2024 | 00:46:26 | |
"Living Legend", "One of a kind", and "Diamond in the Rough are not terms usually bandied about when describing economists! But these are just a few of the hundreds of messages of support and appreciation that flooded a recent social media post recognising the 40-year tenure Dr Shane Oliver to AMP. Shane has dedicated his years to educating Australians on all matters of the economy. His style tends to be glass half full, and you'll rarely hear him pushing doomsday forecasts. He also possesses an uncanny ability to make complex matters easy to understand and is usually armed with some cracking charts to drive home his points. In this episode of the Rules of Investing, Shane explains why central banks are close to pulling off Mission Impossible and avoiding recession. He believes interest rates have peaked and will drift lower as inflation returns to the RBA's target range. The episode also touches on a range of issues, including population growth, housing affordability and Australia's exposure to the Chinese economy.
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| Where Soul Patts is investing for long term growth and dividends | 16 févr. 2024 | 00:41:55 | |
If you’re looking for the future blue chips of the ASX then Washington H Soul Pattinson might be worth a closer look. The company has been around for more than a century, has never missed a dividend payment but, for the most part, has flown under investor radars. That is starting to change following the tie up with Milton Corporation in 2021, which has helped to propel Soul Patts’s market cap over $12 bn and into the S&P/ASX 50. Soul Patts now sits alongside popular names including Mineral Resources, Car Group, ASX Ltd and Ramsay Healthcare. Blue chip stocks are known to be large, reliable, profitable and consistent dividend payers. Soul Patts ticks most of these boxes with the exception of size perhaps. The merger with Milton brought an experienced investment team led by CEO and CIO Brendan O’Dea, 30,000 new shareholders and a $3.7bn large cap portfolio. O’Dea is now the Chief Investment Officer at Soul Patts and says the merger gives Soul Patts the platform required to build the next generation of investments that will sustain Soul Patts enviable track record of shareholder returns. “There’s a real desire on our part to seed the strategic assets of the future and a lot of that is going to come out of that private portfolio.” In this episode of The Rules of Investing, Brendan O’Dea takes Livewire’s James Marlay on a tour of the Soul Patts investment portfolio covering their large cap, emerging and strategic equity portfolios. O’Dea also shares Soul Patts’ unique approach to capital allocation, the asset classes commanding their attention and why you should expect to see more big strategic investments in the years ahead. | |||
| How Hyperion unearths rare but exceptional growth companies (plus two that pass their filters) | 02 févr. 2024 | 00:45:58 | |
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. | |||
| How to invest $1 million in 2024 | 08 janv. 2024 | 00:29:36 | |
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
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| The lead indicator for Dion Hershan’s best trades (and two high quality stocks for the ”slow grind” ahead) | 20 déc. 2023 | 00:41:41 | |
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
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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 | |||
| Ben Griffiths’ small cap playbook as animal spirits awaken | 14 déc. 2023 | 00:44:24 | |
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:
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| 2 killer growth stocks (and why culture is key to successful small caps) | 17 nov. 2023 | 00:36:41 | |
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. | |||
| We are in the midst of a social, economic, financial and political crisis | 10 nov. 2023 | 00:31:27 | |
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. | |||
| Invest in what you know, avoid what you don’t: Lessons from a Hall of Fame fund manager | 27 oct. 2023 | 00:29:13 | |
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. Timecodes:
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| Emma Fisher: Why it pays to be bullish (and the most outstanding idea on the ASX today) | 06 oct. 2023 | 00:48:16 | |
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:
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| Matthew Kidman: Get ready to run with the bulls | 05 oct. 2023 | 01:09:29 | |
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 | |||
| Hedge fund managers never name their shorts. This one does... | 22 sept. 2023 | 00:46:03 | |
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. Timestamps0:00 - 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 | |||
| Bob Desmond names his ”forever” stock | 15 sept. 2023 | 00:44:35 | |
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. | |||
| 3 reasons why the US economy has achieved a miraculous ”soft landing” | 25 août 2023 | 00:38:59 | |
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. Timestamps0:00 - 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
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| Blackwattle’s Ray David is raising red flags about market darling CSL | 18 août 2023 | 00:44:56 | |
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
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| Livewire Live is back in 2023! | 16 août 2023 | 00:07:09 | |
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. SpeakersWe will be announcing additional speakers in the coming weeks.
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| What do counting cars and delivering an 18% pa return for investors have in common? | 11 août 2023 | 00:45:18 | |
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:
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 | |||
| Regal’s ultimate guide to microcap investing in 2023 | 04 août 2023 | 00:39:13 | |
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. | |||
| The only ASX stock with a return on equity of over 50% | 28 juil. 2023 | 00:48:34 | |
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 | |||
| Oscar Oberg: Small caps are primed to rally, and it doesn’t happen without these stocks | 21 juil. 2023 | 00:42:30 | |
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:
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 | |||
| Paul Taylor’s guide to long term compounding on the ASX (plus a 3-stock portfolio for the bottom drawer) | 15 juil. 2023 | 00:51:23 | |
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. Timestamps0:00 - 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 | |||
| This energy company hasn’t seen conditions this good in 25 years | 30 juin 2023 | 00:38:20 | |
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. Timestamps0:00 - 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 | |||
| Giselle Roux’s fluff-free take on the market (and where you can find opportunity today) | 23 juin 2023 | 00:34:10 | |
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 | |||
| The dividend doctor gives his prescription for investing in 2023 | 16 juin 2023 | 01:00:26 | |
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! Timestamps0:00 - 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 | |||
| 8 mega cap stocks have carried markets in 2023. Here’s what comes next | 09 juin 2023 | 01:03:57 | |
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:
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 | |||
| The goldilocks buying opportunity is *almost* here in fixed income | 02 juin 2023 | 00:28:52 | |
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:
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| Jun Bei Liu: Top stocks for today’s markets | 26 mai 2023 | 00:46:36 | |
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:
Note: This episode was recorded on Wednesday, May 24, 2023 Timestamps0:00 - 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) | |||
| This fundie found Afterpay at $6. Now he’s found his next opportunity | 19 mai 2023 | 00:36:10 | |
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:
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) | |||
| Is this the least crowded opportunity in the market today? | 05 mai 2023 | 00:40:55 | |
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
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| No lithium, no worries for this outperforming small cap manager | 21 avr. 2023 | 00:38:41 | |
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:
Note: This interview was recorded on Wednesday April 19, 2023. | |||
| James Gerrish: Low risk equity returns are back (and these stocks provide them) | 14 avr. 2023 | 00:54:04 | |
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:
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 | |||
| Why Morgan Stanley is overweight passive in this volatile environment | 31 mars 2023 | 00:42:40 | |
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. Timestamps2:12 - 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) | |||