The Rules of Investing

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In this episode of The Rules of Investing, Qiao Ma of Munro Partners explains why curiosity and grit are essential traits for long-term investors. We discuss:

Why curiosity is central to Munro Partners’ investment process
How following bottlenecks can uncover overlooked investment opportunities
Why large-cap research can help identify tomorrow’s small and mid-cap winners
The challenge of balancing conviction with the possibility of being wrong
Why grit matters when investments do not work out
How Munro uses risk management to avoid letting losers dominate the portfolio
Where Ma is still finding opportunities in AI, power, travel and healthcare
How Howmet Aerospace and Acter emerged from deeper supply-chain research
The one investment Ma would make if markets closed for five years.

Guest from Munro Partners, a corporate authorised representative (CAR 1244894) of Munro Asset Management Limited (ACN 163 522 254) an Australian Financial Service licence holder (AFSL 480509). The information discussed in this podcast is for general information purposes only and is not financial advice. You should obtain independent advice from a licensed professional adviser before making any investment decision. The views held by Munro Partners are current at the time of recording and are subject to change. Past performance information given in this recording is for illustrative purposes only and should not be relied upon as an indication of future performance. The information in this podcast has been prepared without taking account of the objectives, financial situation, or needs of individuals. None of Munro Partners, its related bodies or associates nor any other person guarantees the repayment of capital or the performance of the Funds or any particular returns from the Funds. Information about the Munro funds is available at munropartners.com. Podcast recorded 31 July 2026.

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Ryder Capital has just clocked up its third consecutive year of 25% plus returns, and has been paying consistent, growing dividends since 2018. In this episode Lauren De Zilva explains how Ryder looks for mispriced opportunities and the thesis behind the firm's largest portfolio holding. She also shares two small-cap investments that meet Ryder’s disciplined investment process.

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Hedley Widdup from Lion Selection Group joins The Rules of Investing to discuss why the resources cycle may still be in its early stages, the outlook for gold and copper, and where he is finding opportunities among Australian micro-cap miners.

In this episode:

Why the mining cycle may still be early
What the Lion Clock says about the current resources market
Why gold remains attractive beyond the gold price
The risks investors often miss during mine commissioning and ramp-up
Why copper could be entering a new trading range
How to invest when the cycle has turned, but the exact bottom has passed
Medallion Metals, Sunshine Metals and other small-cap resources opportunities
The one stock Widdup would hold if markets closed for five years

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Samantha Wong was employee #1 at Blackbird Ventures, the largest shareholder in design software giant Canva and one of Australia’s most influential venture capital firms. When Sam joined Blackbird in 2015, the Australian VC ecosystem was in its infancy - a cottage industry with just a few hundred participants. The landscape has changed dramatically over the past decade as companies like Atlassian, Afterpay, SafetyCulture, and Canva have captured investor attention and created a thriving breeding ground for innovation. In this episode of The Rules of Investing, Sam discusses the rapid evolution of the VC landscape in Australia and New Zealand, why backing the right founders is essential to early-stage investing, and the next generation of companies growing at unprecedented rates.

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While the market obsesses over volatile AI software and tech start-ups, global private equity giant EQT says the real money is being made in the physical layer. In this episode of The Rules of Investing, Ken Wong, Partner and Head of Asia Pacific Infrastructure at EQT Partners, breaks down why the massive, structural build-out of data centres and renewable energy grid connectivity is the market’s most misunderstood, and overlooked, growth opportunity.

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While the market's gaze is fixed on the horizon, the ground beneath quality stocks has shifted, delivering the toughest period of performance since the lead-up to the GFC. But as the saying goes, “it’s always darkest before dawn.” In this episode of The Rules of Investing, James Abela explains why it is critical to have a process for navigating challenging markets, and highlights the bright spots, both globally and on the ASX, that are presenting a breadth of opportunities in small and mid-cap companies.

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Chris Watling from Longview Economics joins The Rules of Investing to discuss the global macro outlook, including AI-driven market concentration, inflation, oil, interest rates, Australian housing, and the hidden fragility beneath parts of the US economy and equity market.

In this episode:

Why the AI theme may be carrying more of the global economy than investors realise
Oil, Iran and the Strait of Hormuz
Why inflation may not be the biggest risk facing markets
The difference between Australia and the rest of the developed world
Signs of weakness beneath the surface of the US economy
Why investor complacency could become a major problem
The one investment Watling would make if markets closed for five years.

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After four years away, Patrick Poke is returning to The Rules of Investing. In this short relaunch episode, Patrick and James Marlay reflect on the podcast’s evolution, the return of video episodes, and what listeners can expect next.

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While rate hikes, inflation, and budget uncertainty have dampened the spirits of many equity investors, one corner of the market is quietly thriving.

The S&P Emerging Companies Index (XEC) has surged 35% over the past 12 months, proving that there is "always a bull market somewhere" if you know where to look.

In this episode, Joel Fleming, Portfolio Manager of the UBS Micro Cap Fund, reveals why the most exciting opportunities often lie in the market’s least efficient spaces.

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The GFC exposed a harsh reality: for investors in or near retirement, large drawdowns aren’t just uncomfortable — they can be permanent. Aaron Binsted from Lazard Asset Management saw this firsthand. It shaped the thinking behind a strategy designed to deliver equity returns with lower volatility and a focus on growing income. In this episode, we cover how markets are navigating today’s macro backdrop, why “economic diversification” matters more than ever, and the under-appreciated dividend growers Binsted is backing on the ASX.

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Markets are wobbling, sentiment is turning, and investors are starting to question what comes next. In this episode, Munro Partners CIO Nick Griffin explains why he still believes we’re in a bull market, how the war in Iran is impacting markets, and why AI is forcing a major rethink on tech investing.

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Gold has re-entered the spotlight, but L1 Capital believes investors may be looking in the wrong place. After years of investing in commodities, the firm formalised its view with a dedicated gold strategy in March 2025, now set to list as the L1 Gold Fund Limited (ASX: LGF, subject to approval).

Co-Chief Investment Officer Raphael Lamm sees the real opportunity not in bullion, but in overlooked gold equities trading on “astounding” free cash flow yields. Crucially, the strategy does not depend on rising gold prices, with valuations anchored in conservative assumptions.

In this episode of The Rules of Investing, Lamm explains why structural forces could support the opportunity for years to come.

Please note, this interview was recorded on Monday, 16 March 2026.

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Periods of intense uncertainty test even the most seasoned investors. Today, markets face several competing forces: artificial intelligence reshaping industries, geopolitical tensions fuelling energy volatility, and elevated valuations alongside concentration in parts of the Australian equity market.

For Yarra Capital Management’s Dion Hershan, these environments demand discipline rather than panic. While investors remain fixated on macro headlines, he argues many meaningful micro changes are being overlooked. Drawing on experience across multiple market cycles, from the tech wreck to the global financial crisis, Hershan believes the decisions made in turbulent periods often matter most. In fact, he says a handful of well-timed choices can set up a portfolio for an entire decade.

Please note, this interview was recorded Thursday, 12 March 2026

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For much of the past year, investors have been focused on growth stocks and AI winners. But some of the strongest returns have come from stocks the market had largely written off. James Hawkins, Head of L1 Capital’s Catalyst Fund, is building a reputation for finding value where others aren’t looking, combining deep research with an activist mindset to unlock it. That strategy has helped drive a strong year for the fund, with contrarian positions in companies like BlueScope Steel and Mineral Resources fuelling 30% gains. In this episode of the Rules of Investing, Hawkins explains L1’s affinity for hard assets, the catalysts for unlocking value and the unloved stocks capturing the markets attention.

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Private lending has expanded rapidly over the past decade as banks pulled back from parts of the corporate market. The result has been a surge of capital chasing income, but the speed of that growth is also raising questions about how the sector will perform when the cycle eventually turns.

In this episode of the Rules of Investing podcast, Privity Credit Managing Partner Ryan Donnar explains why lending outside the banking system is far from a one-dimensional asset class. He also outlines where crowding is emerging, why structure matters more than yield, and the key questions investors should ask before allocating capital.

Please note, this interview was recorded Tuesday, 24 February 2026

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Equity markets are in the middle of what Greg Dean calls “the world’s most uncomfortable rotation." In this episode, the founder of Langdon Equity Partners explains why AI may not be the real story, why high-margin businesses can be more vulnerable than they appear, and how he’s positioning his portfolio, including a 7.6% stake in L1 Group and a decision to reinvest in Johns Lyng after its take-private.

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More than 70 companies reported this week and while the ASX 200 continues to push record highs, stock reactions remain ruthless.

In this episode, Ben Clark argues it’s been one of the strongest reporting seasons in years, with banks, miners and consumer names broadly beating expectations.

He explains why Woolworths’ resurgence caught the market off guard, why WiseTech’s AI defence matters more than its job cuts, and why Monadelphous and Ramsay may be turning points.

Clark also highlights heavy insider buying across tech, suggesting recent weakness may be overdone. Despite volatility, he sees momentum building into the second half.

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With reporting season taking a positive turn, Chris Conway speaks with James Gerrish of Market Partners to get his hot take on a big week of reporting season, the key beats and misses, and what he's keeping an eye on for the rest of the season.

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The first big week of reporting season was full of fireworks with some wild swings in some of the biggest companies on the ASX. Livewire's Chris Conway spoke with Henry Jennings from Marcus Today to discuss some of the important results and how investors reacted.

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Inflation is back at the centre of investor concerns. In this episode of The Rules of Investing, James Marlay is joined by outgoing Schroders CEO and CIO Simon Doyle to discuss why inflation has been so persistent, the assets he trusts most to protect real returns and the lessons from a long career in markets.

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Markets delivered another strong year in 2025, extending an exceptional run for equities. The S&P 500 returned around 22.8% per annum over the past three years, roughly double the long-term average, while the ASX 200 delivered closer to 9.7% excluding dividends.

After a run like this, the key issue isn’t just where markets go next, but how investors set expectations. In this episode, James Marlay speaks Ben Clark from TMS Private Wealth and Charlie Viola from Viola Private Wealth to discuss realistic return expectations, the factors shaping asset allocation for 2026, and where they’re directing new capital.

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Vishal Teckchandani asked two of Australia's leading ETF providers to put together a starting lineup of 11 ETFs built to win next year. Our two team captains were VanEck's Jamie Hannah and Global X ETFs' Marc Jocum, who each brought some of their big hitters (and more cricket metaphors than you can shake a stump at).

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Property experts Nerida Conisbee and Kiril Ruvinsky unpack what is driving the market and share their bold predictions for 2026.

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The Rules of Investing has wrapped for 2025. Thanks for tuning in; we’ve loved bringing you the conversations and insights that shaped markets this year.

We have a few bonus episodes coming out over the next couple of weeks and we’ll return to regular programming in 2026.

Enjoy the holiday break and all the best for the year ahead.

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The ASX’s headline yield has slipped, but dividend income is still on offer if investors know where to look. In this episode of The Rules of Investing, IML’s Dr Michael O’Neill explains the dividend outlook, shares five ASX income picks, and outlines the mistake investors are making on rates and valuation risk.

*Correction - in the podcast Michael mistakenly said the yield on CSL is 4% when it is actually closer to 3% based on 1-year forward estimates from brokers.

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Dr David Allen from Plato Investment Management joins the show to unpack the systematic engine behind his fund’s 25 percent annual returns, how red flags reveal stocks set to fall, and the global themes he believes will drive markets over the next decade.

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QVG Capital’s Chris Prunty joins the Rules of Investing to unpack what makes the great companies great. He shares the three traits found in Australia’s “Hall of Fame” stocks, reveals four small caps he believes could follow in their footsteps, and explains why QVG is backing Hub24 over Netwealth in the battle of the investment platforms.

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Property moves in cycles, but real value lies in assets you can’t replace. Quay Global Investors’ Chris Bedingfield joins The Rules of Investing to explain why global REITs are trading at some of the biggest discounts in years, how ageing demographics and construction costs are reshaping real estate, and why patience remains the most underrated edge for investors.

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It’s hard to know what markets will do next week, let alone next year. But what if you could identify companies that will be in a stronger position five years from now?

That’s the approach taken by Lev Margolin, founder of System Capital, a Melbourne-based long/short strategy that’s delivered more than 22% per annum since inception. In this episode of The Rules of Investing, we unpack the four-step framework that guides his process, where he’s finding opportunities in a hot market, and the businesses he believes are quietly building long-term strength.

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Soul Patts CEO Todd Barlow joins The Rules of Investing to unpack the firm’s merger with Brickworks, why he’s buying at cyclical lows, and how he’s positioning for the future of energy. He also shares why liquidity and humility matter when markets are running hot.

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Markets are on fire and bubble talk is everywhere. So how should investors respond? In this episode, Magellan’s Arvid Streimann breaks down how to keep emotion out of your decisions, where he’s finding genuine value, and why he still believes in the power of brands and discipline.

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In this episode of The Rules of Investing, Centennial’s Matthew Kidman shares his playbook for the late stage of a structural bull market. He explains why valuations don’t matter (for now), how he found his first 10-bagger, and the standout management teams on the ASX. Plus, Kidman reveals why he’s still bullish on markets — and what could eventually bring it all undone.

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Warryn Robertson has spent two decades investing in the assets that keep the world running — from toll roads to transmission lines and satellites. In this episode, he explains the rules for owning the world’s best assets, why getting the definition right matters, and what investors are getting wrong about markets today.

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Two of Australia’s most respected investment firms share how they are positioning for tomorrow. Learn where they see opportunity and how their strategies are evolving. From private credit to gold, discover where Soul Patts’ Todd Barlow and Regal’s Phil King see the biggest returns.

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Bell Direct Advantage is a premium trading platform designed for active and sophisticated investors. It provides access to Bell Potter research, exclusive IPOs, and advanced trading tools, all aimed at giving you a competitive edge. Whether you're a frequent trader or a high-net-worth individual looking to trade shares, options, or warrants, Bell Direct Advantage offers a tailored platform and superior service to sharpen your investing edge. [Find out more here]

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From gaming stock to global giant, Nvidia shows how fast the future can arrive. Global stock pickers Josh Cummings, Qiao Ma and Dr David Allen share where they see the next mega caps emerging.

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Banks and miners dominate the ASX, but the opportunity doesn’t end there. At Livewire Live 2025, L1 Capital’s Mark Landau and Allan Gray’s Simon Mawhinney shared their conviction calls beyond these portfolio staples.

This episode is part of our special mini-series of The Rules of Investing, giving you a front-row seat to discussions from Livewire Live 2025, our flagship investor event.
Whether you’re after big-picture market insights or actionable investment strategies, this series offers exclusive insights to help shape your investment decisions.
We hope you enjoy this special 4-part series. We’ll return to our regular programming with the next episode of The Rules of Investing.
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This series is proudly sponsored by Bell Direct Advantage.
Bell Direct Advantage is a premium trading platform designed for active and sophisticated investors. It provides access to Bell Potter research, exclusive IPOs, and advanced trading tools, all aimed at giving you a competitive edge. Whether you're a frequent trader or a high-net-worth individual looking to trade shares, options, or warrants, Bell Direct Advantage offers a tailored platform and superior service to sharpen your investing edge. [Find out more here]

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If you’re still betting on bear markets or mean reversion to drag asset prices back to earth, you’re living in a bygone era. That’s the message from Viktor Shvets, Macquarie’s Head of Global Strategy, who joined us at Livewire Live 2025.

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Christopher Joye is making a bold call on the US. He believes Trump’s policies will deliver exceptionally strong growth, fuelled by tariffs, tax cuts, and trillions in AI-driven investment. In this episode, Joye explains why he is so bullish on America, what the bond market is signalling, and his advice for investors as hybrids roll off in the years ahead.

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Large caps are often seen as the steady corner of the market, but recent months have reminded us they’re anything but boring. On this episode of The Rules of Investing, Anna Milne, Deputy Portfolio Manager of WAM Leaders shares how Wilson Asset Management is navigating volatility in the ASX 200.

Milne discusses why they like commodities and how the listed investment company structure allows them to back “fallen angels” they believe still have plenty to give. She also highlights the dependable large caps quietly compounding away, and reveals the one company she’d hold if markets shut for the next five years.

Book recommendation: Good to Great

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Good To Great : Why Some Companies Make The Leap and Others Don't

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August reporting season was a rollercoaster but it didn't stop the momentum that has been pushing the ASX higher in 2025.

There were shock sell-offs, steady beats, and a very strong showing from small caps. To help make sense of it, Livewire spoke with small cap stock picker Chris Stott from 1851 Capital, and our very own Kerry Sun, who spends his days hunting for insights from announcements, broker notes and market moves to share with readers on Market Index and Livewire.

This episode of The Rules of Investing was a little different. We unpacked the big themes and surprising stats, dug into the drivers of small-cap strength, and finished off by handing out five light-hearted reporting season awards - from the Stephen Bradbury Award (for the company everyone had written off) to the Sir Alex Ferguson Award (for standout management).

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MA Financial has built its reputation in the toughest corner of the corporate world, restructures. In the years after the GFC, it advised on some of Australia’s most complex and high-profile turnarounds, from Centro Properties and Alinta Energy to Babcock & Brown and Nine Entertainment.

Today, the firm manages over $12 billion and has grown into a major player in private lending. In this episode, Livewire speaks with Frank Danieli, Head of Credit Investments and Lending, about how MA Financial’s restructure heritage shapes its credit strategies, why uncertainty is a constant, and where he sees opportunities, including an unexpected one in car loans.

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Investing feels easier when markets are messy. When volatility spikes and fear takes hold, putting fresh capital to work can feel rational, even opportunistic. But when markets are cruising near record highs, valuations look stretched, and AI stocks are powering ahead like a runaway train, adding to a portfolio can feel unnerving.

It’s a sentiment shared by many right now. With the ASX 200 trading at elevated multiples and earnings growth on track to post its third consecutive annual decline, the contradiction is hard to ignore.

But according to FNArena Editor Rudi Filapek-Vandyck, it’s not a bubble, and the market isn’t broken. The real problem? Investors are using the wrong lens.

“The averages are masking the detail,” he argues. High index-level valuations are being distorted by a handful of heavyweight stocks, while strong underlying growth is still coming through in key parts of the market.

In this episode of The Rules of Investing, Rudi joins Livewire’s James Marlay to unpack what’s really going on beneath the surface, why some companies are still worth owning at premium multiples, and how investors can navigate another volatile reporting season without getting spooked out of the market.

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Step back for a moment and think about how technology has changed your life over the past two decades.

What springs to mind? Smartphones, on-demand streaming (whether it’s music or movies), digital maps, and the broad adoption of artificial intelligence, all powered by fast, affordable and readily available internet access.

The list goes on, and there’s no doubt these advances are changing the way we live. But are they truly life-changing? In many cases, yes, but often they’re about convenience and productivity.

There’s one industry where the pace of innovation is just as rapid, and the impact arguably more profound: healthcare. More specifically, in this episode of The Rules of Investing, we explore the world of medical technology with Jacob Celermajer, founder of Cordis Asset Management.

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For all the scrutiny on private credit of late, one thing remains clear – there remains an insatiable demand for it from investors.

Case in point, the recent $315 million raise by Metrics Credit Partners for the Metrics Master Income Trust. It was done in a day.

Yet for the man often at the centre of the conversation, Metrics co-founder and Chief Investment Officer, Andrew Lockhart, the mission remains the same as when Metrics was born 12 years ago: raise capital, deploy it sensibly, and above all else, manage the ongoing risks accordingly.

"You're fundamentally here to deliver a good outcome for people in terms of their investments.And you never lose sight of the fact that our whole business is set up to effectively manage risk to ensure that we can deliver on our commitments and obligations to our investors," said Lockhart. That unwavering focus, coupled with an ‘always on’ work ethic, has seen Lockhart and his team grow Metrics to $30 billion of assets under management, with no signs of slowing down.

In this episode of The Rules of Investing, Lockhart discusses the conditions that led to the birth of Metrics, its phenomenal growth, and the ongoing challenges that it and the private credit sector face.

He also unpacks the current market conditions and what lower interest rates will mean for Metrics’ opportunity set and potential returns for investors. Finally, he shares an exciting new growth opportunity that leverages the company’s existing relationships and skillset.

Don’t miss this opportunity to hear directly from someone who has been instrumental in shaping Australia's private credit landscape.

Read the summary on Livewire: https://www.livewiremarkets.com/wires/in-his-own-words-andrew-lockhart-on-risk-regulation-and-responsibility-to-investors

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Markets are forward looking and are one of the strongest indicators of what lies ahead for global economies. This dynamic reflects the thinking of millions of market participants digesting and pricing available information to guide how asset prices reflect the future.

For all the twists, turns, and curveballs that 2025 has delivered, markets are, in many cases, at or above where the year started. The S&P 500 is in the green, the ASX 200 is up, and yields on US 10-year bonds, a useful proxy for risk appetite, are lower than at the start of the year.

At face value, you might conclude that investors are more confident about the economic outlook, or at the very least more comfortable than they were in January.

But not all signals are flashing green. A 10% fall year-to-date in the safe-haven US dollar is one example that warrants closer inspection. That’s the view of Fidelity International’s Chief Investment Officer of Equities, Niamh Brodie-Machura, who oversees a team of more than 120 analysts managing over $220 billion for Fidelity clients.

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“People are getting too short term. They’re getting panicked by the developments taking place on tariffs and so forth... they don’t realise it’s often just a bargaining point.”

That’s the view of Mark Mobius, a pioneer in emerging markets investing and founder of Mobius Investments. Mobius says many investors are misreading the noise echoing around global markets. His advice? “Be patient and be willing to roll with the punches.”

In this episode of The Rules of Investing, Livewire’s James Marlay caught up with Mobius in New York to explore how he’s navigating global uncertainty, the investing lessons from decades of travel and working in Asia, and why he believes India is shaping up to be the standout opportunity of the next decade.

With a PhD from MIT and a track record that includes growing Templeton’s Emerging Markets Fund from $100 million to $50 billion, Mobius has experienced the highs and lows of multiple market cycles and dislocations.

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Ellerston Capital’s fixed-income and multi-asset strategist Vimal Gor says the radical Trump presidency means the US Federal Reserve will be forced to return to quantitative easing later this year to cap bond yields and offset the nation’s fiscal problems.

In this podcast, Gor also details why he thinks this means shares, gold and bitcoin can rally later this year. He also argues why he thinks the Aussie dollar will jump versus the greenback on the back of radical shifts in markets that may be set to accelerate and impact every investor.

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Amazon spent over a decade as a misunderstood stock - volatile, unprofitable, and often written off. But for those who looked past the noise, it became one of the greatest investments of our time. Today, Janus Henderson sees echoes of that journey in Spotify. It may not look like a market leader yet, but under the surface, the building blocks of enduring growth are falling into place. In this episode, Josh Cummings explains how volatility creates opportunity, why time is a long-term investor’s best friend, and what separates the winners from the noise. Is Spotify your second shot at an Amazon-style success?

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In this special episode of The Rules of Investing, veteran stockbroker and Marcus Today founder Marcus Padley joins Livewire’s James Marlay for a wide-ranging conversation on two critical themes. First, Marcus takes aim at the industry’s obsession with buy-and-hold, arguing that smart market timing isn’t just possible - it’s essential for managing risk and avoiding underperformance. Then, he fields Livewire reader questions on everything from gold and lithium to bond yields and WiseTech. It’s bold, unfiltered, and classic Marcus.

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Equity markets have bounced, but Andrew Mitchell from Ophir says the road ahead is tricky. Higher bond yields and policy risks point to slower growth. In this environment, companies that can grow through the cycle will stand out. In this episode of The Rules of Investing, Mitchell shares his views on equity markets, the dominance of US megacaps, and why he remains optimistic on small and mid-caps. He also unpacks the thesis behind a mission-critical tech stock flying under the radar, one he believes has the potential to become a rare ‘Rule of 40’ standout.

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Australia’s ETF industry is booming - up $53 billion in the past year alone - and a new player is stepping into the ring. David Tuckwell, son of ETF pioneer Graeme Tuckwell, has launched ETF Shares to challenge the giants like Vanguard and Betashares. His weapon of choice? Low fees and ultra-focused US tech exposure. One fund holds just the top 10 Nasdaq stocks - an audacious bet on concentration over diversification. Is there room for another player in an increasingly crowded market? We explore the strategy, the story, and the stakes behind ETF Shares’ bold launch.

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Investors hoping for a swift ‘V-shaped’ recovery from the recent market sell-off are likely to be disappointed. Instead, they face a slow, grinding path forward. That’s the base case from Koda Capital’s Chief Economist, Brigette Leckie, who says the tariff-led policies of Trump 2.0 represent a structural break for economies and markets.

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“Are you okay?” That was the question Emma Fisher got from her mum after the ASX plunged more than 6% in a single day. For Fisher, it was a soft signal that the worst of the panic may be behind us. In this episode of The Rules of Investing, Emma shares why sharp sell-offs are the new normal, the two market “buckets” she’s buying from, and how she’s funding new ideas. Last time she was on the podcast, Emma tipped ResMed at $22. This time, she’s back with a fresh idea she’s backing for the next 5 years.

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No matter how long you’ve been in markets, we’re all guilty, at one point or another, of operating at a headline level. When markets are moving violently - like they are now - and we’re all trying to keep up, operating at a summary level can become even more pronounced.

But looking beyond the headlines, challenging what you think you know, and diving deeper into complex issues, will almost certainly always yield a better result.

For example, one of the dominant narratives right now is that Trump’s tariffs will lead to higher inflation. Logically, it makes sense. But the reality could look quite different according to Charlie Jamieson, Co-Founder of Jamieson Coote Bonds.

“Everybody just jumps to ‘tariffs mean higher prices, that means inflation'. Well, it's not quite that simple.It definitely means higher prices, but that does potentially mean demand destruction in some things. It really matters how elastic the thing that is being tariffed actually is", says Jamieson.He goes on to provide the example of a 100% tariff on a luxury handbag: “you probably won’t sell too many.” Conversely, a tariff on the one little part you need for a broken-down heating or air conditioning unit: " You're probably going to pay it because you're really, really need it - it’s very inelastic.”

Jamieson also points out that inflation is “a continual and sustained increase in pricing”.

“If prices go up 10% that's terrible, obviously demand will be affected, but if they don't change thereafter, it's not inflationary. It just means that yes, of course it is in the very first reading of, but it's not a continued and sustained price increase”.The final piece to this puzzle is what happened last time.

“As we saw in Trump 1.0, despite his tariffs at that time, inflation continually fell through that period”, notes Jamieson.

“Trump's thinking is that if he can bring that budgetary deficit down considerably, it will also help take out excess demand, it'll bring more efficiency to government and in doing so, he will lower inflation”.This is just one of the many narratives that Jamieson unpacks in the following Rules of Investing podcast, which covers a lot of ground about the global economy, central bank policy, interest rates, inflation, and why investors have a great opportunity right now to rethink and reposition their portfolios.

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At the start of 2025, there were three big-picture scenarios facing investors: a hard landing, a soft landing, or no landing at all. Just two of those scenarios remain, with a hard landing now off the table, according to Ten Cap’s Jun Bei Liu.

That view might seem a touch ambitious in light of the market rout that kicked off in mid-February and gathered steam as sticky inflation and a tariff war put equity valuations under pressure.

The ASX 200 has fallen 8.5% in a month and is down over 4.5% for 2025. The picture is worse for US equities, where, after back-to-back years of +20% gains, the S&P 500 has shed over 10% in a month and is down over 5% from the start of the year.

The headlines and moves are unnerving, but the backdrop for equities remains favourable, and the volatility is creating opportunities to buy businesses at better valuations, according to Jun Bei Liu.

Thanks to our Sponsor AlphaSense
This latest episode is brought to you by AlphaSense.
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The allure of small-cap investing is undeniable. The chance to find an overlooked gem that can skyrocket is real, but the risks are just as high. Illiquidity, limited analyst coverage, and varying investor strategies create opportunities—but also traps. Success stories like Pro Medicus and Netwealth prove the potential, yet the volatility can be brutal.
Steve Johnson, CIO at Forager Funds, knows this world well. In the latest episode of The Rules of Investing, he shares his journey from investment newsletters to funds management and reveals the small caps he's backing for future growth. Don’t miss it!

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From investing his paper route money in term deposits when he was nine years old, to racing the two kilometres from one end of Collins Street to the other to submit a handwritten RBA bond tender, to running a market-beating income fund for more than 20 years, Yarra Capital Management’s Roy Keenan has seen it all in his 40 years in fixed income.

It is this broad experience and love for fixed income that makes Keenan such an interesting person to talk to, particularly given the world as we find it today.

There’s a new regime taking shape in the US, the promises of which will need to be funded by new paper, locally we have state governments in trouble (none more so than Victoria, where Keenan was at the coalface last time it was broke), whilst the energy transition and other major investment themes are creating opportunities.

Making sense of it all is always the key, but when you have four decades of experience you have learnt when to use your head and when to pay attention to your gut.

"I think that the head tells you to put the trade on. I think the gut is the warning signal that something doesn't feel right and therefore instead of taking that trade off quickly, you might just let it run a little bit longer to see how it will play out," he says.So, which themes are dominating Keenan’s head space and innards today? Be sure to listen to the podcast for insights on the world's biggest and most liquid markets, as well as some war stories from Keenan’s 40 years in the market.

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Stock markets are off to a flying start for 2025. The S&P ASX 200 is up nearly 5%, with gold, banks and technology companies continuing their bull runs from 2024. The consensus view is that banks and tech are expensive, but the market doesn't seem to agree, or at least it doesn't care.

Moments like this can be challenging for investors; fundamentals tell you to look the other way, but ignoring the temptation to follow the momentum is hard.

In this episode of the Rules of Investing, Laretive shares some tips for keeping a cool head when markets are on fire, identifies some opportunities from the lower Aussie dollar and discusses three stocks he thinks can deliver strong results in the upcoming reporting season.

Paul Tudor Jones article
Seneca's M&A list

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The past few years have been kind to investors. A glance over 2024 asset class returns suggests that most Australian investors have been sitting on healthy gains for the past 12 months, with the much-loved banks leading the charge. Global equity exposure will have sweetened returns, with the S&P 500 clocking up consecutive years of +20%. Even conservative investors have been rewarded with returns on cash, which is the best we've seen in decades.

It's in our nature to resist making changes to a winning formula. However, with market leadership being highly concentrated and, for the most part, coming from high-growth stocks, there's a decent chance that your portfolio has developed a few biases and overweight positions.

Why does this matter? Markets have repeatedly reminded us that good times don't last. Reviewing your portfolio and making tweaks or rebalances is prudent. This ensures you harvest some of those gains and position your portfolio for all market conditions.

Livewire's James Marlay spoke with Charlie Viola from Viola Private Wealth and Ben Clark from TMS Private Wealth to explore the factors they think matter for 2025, discuss how they are allocating capital for the year ahead, and to get some professional tips on rebalancing your portfolio.

Putting theory into practice, he also revealed his SMSF portfolio and asked our guests to share the changes they would make.

To see the charts and tables referenced in the podcast are on this link: https://www.livewiremarkets.com/wires/how-to-invest-1-million-in-2025

This year's Outlook Series sponsor is Commsec, Australia’s leading online broker.

With over 25 years of industry leading service and experience, CommSec offers Australia’s best online and mobile trading solutions.

Begin your investment journey - commsec.com.au

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If you’re feeling upbeat about markets as we head into 2025, you’re not alone. 41% of investors that participated in Livewire’s Outlook Series Survey said they are feeling optimistic about markets right now, well ahead of the following most popular response with 30% of survey participants saying they are feeling anxious.

The responses are not surprising, given the decisive run in equity markets in recent years. The S&P 500 is on the cusp of racking up consecutive years of 20%+ returns. A feat only achieved four times since 1926.

The other instances occurred in 1927-1928 before the great depression, in 1942-1943 during World War II, from 1995-1999 there were unprecedented gains with five 20%+ years and more recently in 2017-2018.

Investors are likely feeling optimistic given the strong returns on offer, whilst it is natural that anxiety is growing and a recognition that the good times won’t last forever.

Unfortunately, history provides little solace for those investors looking to the past in the hope that it might give some clues as to what 2025 might hold. The returns in the years following the four historical precedents are ambiguous, with a 50/50 split between negative and positive returns. However, the drawdown years were smaller than when markets continued to rally.

So, how does this information help us, and what should investors think about as we head into 2025?

To answer this question, we drew on the expertise of top-rated financial adviser Paul Burgon, Chief Investment Officer and Managing Partner at Lipman Burgon and Partners. Paul has decades of experience allocating capital on behalf of his clients and was ranked #6 in 2024 on Barron’s list of top financial advisers.

Even with his experience, Paul acknowledges that predicting the future is fraught with danger and a recipe for disappointment. However, over his career, he has developed a set of ten principles that he believes can underwrite investment success.

These principles draw on the renowned endowment model of investing developed by David Swenson and are now widely adopted by many leading investment institutions, including Australia’s Future Fund.

Yale’s endowment fund returns under Swenson are compelling, having delivered annual returns of 14% over 35 years.

Summarising the underlying objective of Burgon’s philosophy is relatively simple. He is seeking to remove or dampen the influence of emotions on investment decisions. In 2024, access to extensive research, institutional-grade investment models and improved access to private markets make it possible to achieve more consistent returns, reducing the prospect of poor decision-making at times of peak emotion.

While few of us will be seeking to replicate the allocation of global endowment funds, I’m sure most of us would like to bank the healthy returns of recent years and dampen the impact of any impending market dislocations.

“If you can have more reliability of outcomes in your equity allocation and more consistency of returns that is a much better way to allocate capital than trying to chase the next high-performing manager.”

In the final episode of The Rules of Investing, we hope to leave you with valuable asset allocation and portfolio construction insights from one of Australia’s top financial advisers. And while we’d all love to see another 20% + year from the S&P 500, it makes sense to ensure your portfolio can withstand the chance that 2025 could be a down year. Better to be safe than sorry!

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The Australian property market is incredibly nuanced. Markets like Brisbane, Adelaide, and Perth are soaring by double digits while the markets of Sydney and Melbourne have started to cool considerably. But even if prices in the largest housing markets are mellowing, it does not take away the core and indisputable argument: Housing may never have been affordable but now, the crisis is worse than ever.

Andrew Schwartz,

Co-Founder, CIO, and Managing Director at alternative real estate investment manager Qualitas, doesn't see this structural situation changing any time soon. When he is asked to reflect on the last 12 months in the property market, he effectively described 2024 as one of the less memorable periods of recent years.

"I think it'll go down as one of the less exciting years that we're going to think about when we reflect on the years that have gone by," Schwartz reflects. "As we're approaching the end of 2024, it's quite clear that markets are starting to slow down and a lot of that momentum is coming out of the market."But he does see next year becoming far more "interesting", "fascinating", and even a "thriller" for investors in this asset class.

"I think it's getting very exciting in 2025. There are many reasons why I feel that but in particular, residential property is affected by supply and demand and interest rates. When you look at each of those individual factors, you do see a market where Australia is caught short on the supply side at the moment and it's been very hard to get supply into the market. We have quite significant demand coming in and we have had a sustained period of relatively high interest rates," Schwartz says.

Schwartz's comments here on this asset class really matter. Qualitas, the company he co-founded, has nearly $9 billion in funds under management today, mainly from overseas and domestic institutional investors who want to access the lucky country's most famous asset. An asset that, Schwartz argues, is a better store of value than stocks, crypto, and even gold.

On this week's edition of The Rules of Investing, Schwartz is sitting down with guest presenter Hans Lee to discuss his views on these key tailwinds, his take on the macro environment, and where he sees growth opportunities in the Australian property market today.

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other key insights you can expectForget stocks, crypto, and gold: Residential property may be the best store of value out there

"I actually think that residential property is one of the best stores of value you can consider ... that is my personal opinion."
"A beautiful store of value is buying land and you know we are going to be more and more densified over time. Personally, I find it hard to move away [from property] but that is how I think about residential property as a store of value."

It's not about whether house prices rise, it's just about whether house prices will fall

"One of the key measures for us is around the margin the developer is earning on the project. I don't think about the margin as a developer making money per se. I think about margin as safety for error. How much could we afford for prices to wind back?"

Is the answer to unlocking housing supply just to "drop rates to zero"?

"There is no doubt that if you want to stimulate the next round of the housing market, it's about dropping interest rates. The cost of capital is such a big factor in delivering projects."
"However, the problem with dropping interest rates to that level is that one of the measures the RBA is very focussed on is the wealth effect of housing. The more people's houses are worth, the more they feel wealthy, and the more they go out and consume."

How much will it cost for Australia to build 240,000 homes a year?

"Construction costs have risen some 40% over the last three years in Australia. As a generalisation, housing prices and apartment prices, in particular, have not gone up by 40%."
"Groups like ours see a lot very large volume of project feasibility where developers would like to get their projects financed."

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Koda Capital is one of Australia's elite wealth management firms, charged with allocating over $11.5 billion of capital on behalf of high-net-worth individuals, family offices, and charitable foundations.

For the past decade, Brigette Leckie has played a pivotal role in shaping the firm's views on where the best opportunities lie across global asset markets. Leckie firmly believes that understanding the macro environment is the starting point for building an investment strategy.

And while it's not every day that investors like you and me get to pick the brains of an asset allocator with Brigette's experience. In this episode of the Rules of Investing, you'll get a front-row seat and learn how Brigette makes sense of the dynamics in global economies and what that means for investors.

With a new regime set to take office in the world's largest economy and Australia's largest trading partner, China, amid a generational economic transition, the macro environment requires careful consideration for investors.

Around the world with Brigette LeckieFresh off the back of visits to Europe and the United States, Brigette made these observations.

Europe: Better than the headlines and muddling through 'muddle through'

Traffic is everywhere (yes, worse than Sydney)
A change in attitudes towards experiences over spending on goods persists.
Restaurants and streets are buzzing, and with the exception of Germany, economies will continue to muddle along
Manufacturing in Germany remains sluggish

United States: The gap is widening

Inflation is real. Flights are at capacity, it's hard to get an Uber, and the streets are buzzing in many cities.
The gap between the haves and the have-nots is widening.
Politics remains highly divisive for families and corporations.

"I did see divisiveness in a couple of things I did see on the corporate side. So, for example, getting into a car and asking the driver what his views on the election were, and he said, "Company policy is we don't talk about the election or politics." So that surprised me," said Leckie.China: Three significant issues to deal with

Leckie says that China has been letting market forces deal with three major issues in its economy, and she expects these will take some time to resolve.

Deflation: This remains an issue caused by excess capacity in the economy.
Weak consumer: Consumer sentiment is fragile, creating a downward deflation spiral.
Excesses of the property market: This is a well-documented issue that will take time to work through.

Historically, China's policy has been boom or bust. Leckie believes that a mindset shift has taken place, and the old approach is being replaced by genuine reform. The goal is to gradually turn China into a more consumer-based economy. A stronger China is good for global economies, especially Australia; however, we should not expect the boom days of the past to return.

So does macro matter?Leckie emphatically believes that understanding macroeconomics is the foundation of good investment strategy and asset allocation. She cites the example of interest rates near zero or negative as a point in time when the macroeconomics was 'out of whack' and providing a clear signal. Developed market bonds were 'uninvestable' in her eyes—a call that has been vindicated in recent years.

Currency markets can also provide a signal. Most of the time, currencies trade in a narrow range, but there are times when they get to extremes. For example, the Australian dollar was worth less than US50 cents, and equally, it traded at parity. For globally diversified portfolios, these extreme moments matter.

Three points for asset allocation right nowLeckie says returns in recent years have been exceptional, and investors should be mindful not to extrapolate these into the future. Knowing what risk you will tolerate is easy to underestimate when markets are ripping higher. Leckie had these key messages for investors.

Hold your conviction on big calls. If you have a strong foundation for your positions, you need to be willing to ride out short-term noise.
Investors are too bullish on risk assets and should be cautious about expecting these returns to continue
Diversification will be crucial over the period ahead. Investors must ensure their portfolios are properly diversified with uncorrelated investments.

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For those who love equities, you’re in for a treat with the latest Rules of Investing podcast. This week's episode features First Sentier Investors’ Deputy Head of Australian Equities Growth, David Wilson.

Wilson's bread and butter is picking high-quality growth companies - a role he executes every day as part of the team that runs the First Sentier Geared Australian Share Fund. He is not afraid to explain how he goes about doing this while acknowledging his missteps and sharing a handful of stocks he likes right now.

When it comes to his process for picking stocks, Wilson says it’s all “pretty logical”.

“We just try to invest in good businesses with management that are trying to do the right thing for you and with the right sort of balance sheet.
It's pretty straightforward. You can overcomplicate these things, but generally, that's our approach”, says Wilson.
Wilson adds that the team watches company management very closely:

“What they're trying to achieve, what their goals are, but also at their actions, particularly when they make an acquisition or divestment - that's a point where you get a real insight into how a company is thinking," says Wilson.

Wilson points to Car Group (ASX: CAR) as a company with a solid acquisition history. The company is a recent addition to the portfolio, though Wilson acknowledges that he was a bit late to the party.

Another stock he particularly likes right now is pallet-maker and logistics company Brambles (ASX: BXB), saying that “the new management team has brought in a real pricing discipline over the last five years”, which has allowed them to cement a dominant position as a global leader.

In the following episode, Wilson also discusses the Fund's current overweights in tech and healthcare and names one stock from each sector that stands out (one of which is also the stock he would own if the market closed for five years).

In terms of what Wilson doesn’t like right now, he talks about the shrinking position of consumer staples and explains why they haven’t been “quite so staple” over the past year.

He also talks to sector underweights in energy, financials and materials – despite being overweight BHP Group (ASX: BHP) and Rio Tinto (ASX: RIO). For good measure, he also shares his thoughts on Rio’s takeover of Arcadium Lithium.

Finally, in explaining how valuations matter, Wilson shares why he is underweight Cochlear (ASX: COH), despite it being a great business.

Listen to the podcast to learn what keeps Wilson motivated after 40 years in markets, how he sees the current market conditions, and learn a little more about his process for picking stocks. For good measure, he'll even share with you which financial metric is a waste of time!

Note: This interview was recorded on Tuesday22 October 2024.

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In a world where artificial intelligence dominates headlines, few fund managers have harnessed it as boldly as Armina Rosenberg.

For those who don't know her, "Arms" made a name for herself at Grok Ventures, the family office of Mike Cannon-Brookes.

Now, she's paving a new path at AI-backed Minotaur Capital, alongside Perpetual alumnus Thomas Rice.

The duo have developed Taurient, a software system that uses large language models for everything from idea generation to portfolio construction.

In this episode of The Rules of Investing, Arms outlines how you can use AI to level up your own investment strategy, as well as a few stock ideas to get you started.

Note: This interview was recorded on Wednesday 9 October 2024.

Timecodes* 0:00 - Intro * 2:13 - Lessons learnt from managing the wealth of Australia's mega-rich * 7:32 - Family involvement in investment in family offices * 8:56 - Differences between how retail investors and mega-wealthy invest * 10:01 - What makes Minotaur Capital different from its peers * 13:23 - How Arms and Thomas met * 15:26 - How Minotaur's AI system Taurient works * 25:21 - Mix of fundamental investing and AI * 26:30 - Can AI help to know when to sell a stock? * 27:37 - Can investors develop an AI-backed system themselves? * 29:04 - How investors can use ChatGPT to make smarter investing decisions * 31:21 - The future of funds management in an AI world * 34:32 - Where the team sees opportunity today i.e. exciting themes * 37:13 - Energy companies making waves on the global stage * 39:10 - AI winners - why Minotaur is backing smaller players over the behemoths * 39:55 - Healthcare ideas - and an emerging oral GLP-1 winner in Japan * 41:25 - Why Japan is a "once in a generation opportunity" * 42:53 - An example of a company Minotaur is shorting * 45:18 - What the market is getting wrong today - private credit * 47:36 - Stories of wins and losses and lessons from these * 51:51 - Two stocks for the next five years (if the market were to close in that time)

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Today, we’ll be bringing all the insights from Livewire Live together with the help of one of Australia's leading financial advisers and one of the country's top wealth managers.

Livewire’s James Marlay sat down with Alexandre Ventelon of Morgan Stanley Wealth Management and Charlie Viola of Pitcher Partners to answer our audience’s questions about asset allocation and give investors some tangible ideas on how to apply the lessons and insights from a full day of sessions covering multiple asset classes, themes and ideas.

This episode is part of our special mini-series of The Rules of Investing, giving you a front-row seat to discussions from Livewire Live 2024, our flagship investor event.

Whether you’re after big-picture market insights or actionable investment strategies, this series offers exclusive insights to help shape your investment decisions.

We hope you enjoy this special 7-part series. We’ll return to our regular programming with the next episode of The Rules of Investing.

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This series is proudly sponsored by Bell Direct Advantage.

Bell Direct Advantage is a premium trading platform designed for active and sophisticated investors. Offering access to Bell Potter research, exclusive IPOs, and advanced trading tools, it’s built to give you a competitive edge. Whether you’re a frequent trader or a high-net-worth individual trading shares, options, or warrants, Bell Direct Advantage delivers tailored solutions and superior service to sharpen your investing edge. [Find out more here]

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Today, you’ll be learning about the good, the bad and the ugly of equities markets - with the help of:

Dr David Allen, Head of Long/Short Strategies, Plato Investment Management
Ben Griffiths, Executive Chairman, Eley Griffiths Group
James Hawkins, Partner & Head of the Catalyst Fund, L1 Capital
Dushko Bajic, Head of Australian Equities Growth, First Sentier Investors

This panel is hosted by Centennial Asset Management’s Matthew Kidman.

They explore the stocks they are bullish on today, the themes they believe are likely to suffer, and the stocks they recommend investors avoid (or short, if they can) over the months ahead.

This episode is part of our special mini-series of The Rules of Investing, giving you a front-row seat to discussions from Livewire Live 2024, our flagship investor event.

Whether you’re after big-picture market insights or actionable investment strategies, this series offers exclusive insights to help shape your investment decisions.

We hope you enjoy this special 7-part series. We’ll return to our regular programming with the next episode of The Rules of Investing.

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This series is proudly sponsored by Bell Direct Advantage.

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Many of the best investing opportunities emerge when you think differently from the herd. This session will feature five high energy predictions that will challenge consensus thinking as investors look towards 2025 and beyond.

You’ll be hearing from five of Australia’s leading investment minds, including:

Kellie Wood, Head of Fixed Income at Schroders
Vihari Ross, Portfolio Manager at Antipodes,
Bob Desmond, Co-Portfolio Manager and Head of Claremont Global
Josh Clark, Lead Portfolio Manager at QVG Capital
Matthew Kidman, Chief Investment Officer at Centennial Asset Management.

This episode is part of our special mini-series of The Rules of Investing, giving you a front-row seat to discussions from Livewire Live 2024, our flagship investor event.

Whether you’re after big-picture market insights or actionable investment strategies, this series offers exclusive insights to help shape your investment decisions.

We hope you enjoy this special 7-part series. We’ll return to our regular programming with the next episode of The Rules of Investing.

________________

This series is proudly sponsored by Bell Direct Advantage.

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In this session you’ll be hearing a fireside chat with Todd Barlow the CEO of Soul Patts, Australia’s oldest listed company.

Soul Patts is a diversified investment house often described as Australia’s answer to Warren Buffett’s Berkshire Hathaway. The company has established an incredible record of dividend payments to shareholders and today you’ll be getting an asset allocation masterclass from Todd and hearing about the opportunities he sees in the market today.

This session was moderated by James Unger, Head of Corporate Finance and Bell Potter Securities.

This episode is part of our special mini-series of The Rules of Investing, giving you a front-row seat to discussions from Livewire Live 2024, our flagship investor event.

Whether you’re after big-picture market insights or actionable investment strategies, this series offers exclusive insights to help shape your investment decisions.

We hope you enjoy this special 7-part series. We’ll return to our regular programming with the next episode of The Rules of Investing.

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This series is proudly sponsored by Bell Direct Advantage.

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Artificial Intelligence is surely the hottest topic right now powering returns in stock markets and capturing our attention with its promise of productivity and innovation. But with such spectacular interest and returns I’m sure many investors are wondering if the opportunity has passed.

Our next panel will be picking the eyes out of the AI opportunity. How big is it and where are we in the cycle for this industry? Who will be the winners? And who will get crushed?

The panel features:

Nick Griffin, Founding Partner & Chief Investment Officer, Munro Partners
Jun Bei Liu, Lead Portfolio Manager, Tribeca Investment Partners
Jacob Mitchell, Chief Investment Officer & Lead Portfolio Manager, Antipodes

This session was moderated by Livewire’s Deputy Managing Editor Ally Selby.

This episode is part of our special mini-series of The Rules of Investing, giving you a front-row seat to discussions from Livewire Live 2024, our flagship investor event.

Whether you’re after big-picture market insights or actionable investment strategies, this series offers exclusive insights to help shape your investment decisions.

We hope you enjoy this special 7-part series. We’ll return to our regular programming with the next episode of The Rules of Investing.

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This series is proudly sponsored by Bell Direct Advantage.

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In this episode, you’ll be hearing a panel exploring a number of big topics dominating conversations around markets right now.

From the changing macro backdrop and debate over the merits of public vs private markets to the implications of ageing populations, the energy transition and digital innovation these are Seismic Shifts and we’re going to hear about the opportunities they present for investors.

The speakers in this session are:

Matthew Haup, Lead Portfolio Manager at Wilson Asset Management
Srdjan Dangubic, Partner at Five V Capital
James Abela, Portfolio Manager at Fidelity
Andrew Lockhart, Managing Partner at Metrics Credit Partners

You moderator is Livewire’s managing editor Chris Conway

This episode is part of our special mini-series of The Rules of Investing, giving you a front-row seat to discussions from Livewire Live 2024, our flagship investor event.

Whether you’re after big-picture market insights or actionable investment strategies, this series offers exclusive insights to help shape your investment decisions.

We hope you enjoy this special 7-part series. We’ll return to our regular programming with the next episode of The Rules of Investing.

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This series is proudly sponsored by Bell Direct Advantage.

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In this episode, you’ll hear from Scott Kleinman, the co-president of Apollo Global Management, as he sits down with Livewire’s James Marlay. Kleinman shares his views on why he believes markets are getting ahead of themselves with rate cut expectations, where he sees value across various sectors, and how Apollo is positioning to take advantage of mega trends such as digital transformation, the energy transition, and ageing populations.

This episode is part of our special mini-series of The Rules of Investing, giving you a front-row seat to discussions from Livewire Live 2024, our flagship investor event.

Whether you’re after big-picture market insights or actionable investment strategies, this series offers exclusive insights to help shape your investment decisions.

We hope you enjoy this special 7-part series. We’ll return to our regular programming with the next episode of The Rules of Investing.

________________

This series is proudly sponsored by Bell Direct Advantage.

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In this special mini-series of The Rules of Investing, we’re taking you inside the auditorium at Livewire Live 2024, our flagship investor event. Whether you’re after big-picture market insights or actionable investment strategies, this series offers you a front-row seat to the most valuable discussions from the event.
If you’re keen to hear from some of Australia’s top investors, these episodes will provide exclusive insights that can help shape your investment strategy for the year ahead.

We hope you enjoy this bonus 7-part series. We’ll be back to our regular programming after this, with the next episode of The Rules of Investing.

.................

This series is proudly sponsored by Bell Direct Advantage.

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Behavioural economics explains why we make such stupid decisions with our money. Unfortunately, the study has found that behavioural biases are very hard to control and, even if you are aware of them, no one is immune from poor decision-making when it comes to both life and our finances.

This is where quantitative or systematic investing comes in - a realm of investing typically reserved for institutional investors like super funds and the ultra-wealthy.

Quantitative investing removes emotion and behavioural biases from investing. Instead, it relies on some of the smartest people in the world to put together hundreds to thousands of signals and data points for a large language model to make decisions. Humans are involved but just for oversight, in case the model does not truly understand a situation. For example, it may not understand that airlines were not a fantastic short-term opportunity amid a significant sell-off during the COVID-19 crash.

This is a far cry from fundamental investing, which relies on a fund manager or investor analysing macroeconomic and stock-specific factors, meeting with management teams, trying out products and services and reviewing a business's balance sheet before making an investment decision of their own.

The gains from quantitative strategies are typically small, but they're consistent over time. You are not going to have years of 10-20% plus outperformance over an index, but equally, you shouldn't experience huge drawdowns either. And over the long term, this small amount of alpha adds up.

Interestingly, Macquarie Asset Management was one of the few firms that saw its funds achieve 100 batting averages - for both the large-cap and small-cap categories - over a 10-year period. This means that these funds, which are all quantitative strategies*, have outperformed the benchmark 100% of the time in every three-year rolling period over the past decade.

So, to learn more about quantitative investing, quantitative ETFs and the major trends shaping ETF markets, Livewire's Ally Selby was joined by Blair Hannon, ETF Strategist at Macquarie Asset Management.

We discuss some common misconceptions surrounding quantitative investing, the signals that have worked over the last few years, and the magic of compounding over the long term.

Plus, Hannon also shares why he strongly believes that passive investing is not creating a bubble in markets - despite what some of the world's most famous investors (like The Big Short's Michael Burry) would have you think.

Note: This interview was recorded on Tuesday 24 September 2024.

Timecodes * 0:00 - Intro * 1:54 - Difference between fundamental and quantitative investing * 5:28 - Removing the emotion from investing * 6:55 - Signals that are used to avoid behavioural biases * 8:56 - Do we need human touch on quant funds * 10:31 - Common misconceptions of quant investing * 14:44 - The signal that has been working over the last year * 18:20 - Turnover of stocks in the portfolio * 20:10 - The signal that has worked over the long term * 21:32 - Why 1% alpha is attractive over the long term * 24:38 - Macquarie's batting average scores over 10 and 5 years * 27:37 - Why ETF popularity will continue to soar * 29:57 - Why active fund managers need to innovate on ETFs * 32:50 - Innovation in the US - and what we can expect in Australia * 35:08 - Why ETFs aren't the death of managed funds * 37:10 - Why passive investment isn't creating a bubble in markets * 39:07 - Something that worries Blair about the direction of ETF markets * 41:21 - One ETF to hold for the next 5 years if markets were to close

Disclaimer:

Product Disclosure Statements and Target Market Determinations for Macquarie ETFs can be found at etf.macquarie.com and should be read before making a decision to invest.

*The Macquarie Australian Shares Fund, Macquarie Australian Equities Fund and the Macquarie Australian Small Companies Fund’s investment strategies changed effective 18 December 2017. Until 17 December 2017, the strategies were managed with a fundamental approach. From 18 December 2017, the strategies were restructured such that they are managed with a quantitative, systematic investment approach.

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

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

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

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

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

Note: This episode was recorded on 29 August 2024.

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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 Schroderspoints 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

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In this episode, T. Rowe Price's Dom Rizzo argues the world is underestimating the true impact of artificial intelligence.

Artificial intelligence has been a buzzword in financial markets across the globe since the release of ChatGPT to the public in November 2022.

It's pushed stocks like NVIDIA (NASDAQ: NVDA) to eye-watering heights - with its share price soaring 290% since then.

Earnings expectations for NVIDIA, by the way, have exploded over that period, all on the back of the productivity promises made by AI. Back in November 2022, the street expected that NVIDIA would deliver 62 US cents in calendar year 2025. Today, analysts expect the company will earn US$3.75 per share next year.

And yet, despite the stellar run in AI-related companies over the last year or so, and mounting concerns that investors may have gotten ahead of themselves on the momentum behind many of these stocks, T.Rowe Price's Dom Rizzo believes investors are still underestimating the true potential, size, and duration of this burgeoning technology's global economic impact.

In fact, he argues it will likely be the biggest productivity-enhancing technology for the global economy since the invention of electricity. But, with productivity-enhancing technologies usually comes speculative bubbles. Take the Railway Mania bubble in the UK in the 1840s, for example - or more recently, the dot.com boom and bust in the late 1990s/2000s.

"I think inherently, that's what will happen with AI... But if you look at the stocks, most of them have just lifted with earnings growth. And so I'm not sure we're in this period of the irrational exuberance of a bubble like we were in the late 90s, very early 2000s," Rizzo says.

So how do you pick the real AI winners from the imposters?

Rizzo believes it all comes down to a solid investment framework - and one that reflects who investors are as a person at that.

"One of my favourite investment frameworks I've ever heard was when someone said, "I'm a pretty boring person and I like boring stocks." They bought stocks like consumer staple stocks and utilities and they did great over time. I like innovation and I like change," Rizzo says. There are four essential factors that Rizzo uses to identify innovative tech stocks. These include:

Linchpin technologies: If a linchpin falls out, the wheel will fall off the axle - so Rizzo is looking for companies with mission-critical technologies for the success of their customers - or those that make their users' lives dramatically better.
Companies that are innovating in secular growth markets: Rizzo doesn't want to buy companies that sell lifeboats to sinking ships, he's after companies that are taking share in fast-growing end markets.
Improving fundamentals: This could be accelerating revenues, expanding operating margins and improving free cash flow conversions.
Reasonable valuations: Unfortunately, however, the market is smart and you often have to pay up for high growth opportunities.

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.

Timecodes: * 0:00 - Intro * 2:10 - Making sense of the volatility in tech stocks * 3:11 - This is a healthy bull market correction * 4:44 - The true transformational nature of AI * 8:11 - Spotting the imposters from the real AI winners * 11:06 - There are risks but we are starting to see business acceleration from AI * 13:27 - Should you take advantage of sell-offs in AI companies? * 15:08 - What Dom is seeing on the ground in the US in terms of economic stability * 17:08 - How to identify winning tech stocks * 19:53 - How Dom thinks about risk * 22:01 - Dom's wishlist of stocks he would own at a cheaper price * 24:15 - Stocks it is worth paying up for right now * 26:32 - A deep dive into semiconductor stocks and cycles * 30:20 - NVIDIA at the point of deceleration and what this means for investors * 31:16 - How to take advantage of sell-offs with very little cash * 34:19 - One thing investors are getting wrong about markets * 34:53 - Biggest lessons Dom has learnt during his career * 39:06 - One stock Dom would hold if the market closed for 5 years

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

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

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

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

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

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

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

Timecodes:

0:00 - Intro
2:36 - Decisions that lead to outperformance in FY24
5:04 - Roger Federer's streak and lessons for investing
6:13 - Interest rate expectations
7:00 - Why the small-cap rebound can continue and the Great Rotation in Australia
8:03 - The stocks that will benefit - HUB24 (ASX: HUB), Zip Co (ASX: Z1P), Credit Corp (ASX: CCP)
9:24 - Wildcards that could impact investors' portfolios
11:41 - What to expect this reporting season
12:29 - Why investors should be wary of crowded trades
13:24 - A stock to watch this reporting season: Aussie Broadband (ASX: ABB)
14:15 - One thing the market is getting wrong right now
16:24 - A story of a big win or loss from Arden's investing journey
17:27 - Stories from childhood - investing at 10 years old
18:01 - One stock to hold if the market were to close for the next 5 years... you'll have to listen to the interview for that one!

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

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

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

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

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

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

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

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

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

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

Don’t miss the latest Rules of Investing Podcast.

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

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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.

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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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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. You can watch the video by clicking the link below:

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

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Hello and welcome to the Rules of Investing, brought to you by Livewire Markets. This week’s guest is on a mission to truly surprise our listeners. He believes investors are underappreciating the real impact of artificial intelligence on markets and how we value stocks. In fact, he believes it’s the end of the world as we know it.

I’m talking of course, of FNArena’s Rudi Filapek Vandyck.

Here’s a sneak peek of what you can expect….

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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

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

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

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

"Have they hit their targets? Have they done what they said? If we have any doubts on that trust factor, for us, that's completely a non-negotiable and we won't invest," she says. Burns is reading between the lines, and looking beneath the surface for red flags. And while management teams selling stock, poor track records and value-destructive deals can certainly be warning signs, she argues that alignment - and the lack thereof - can often be far more telling for the future direction of a company's share price.

"Incentives drive outcomes... I can't tell you how many times I have seen incentives for management based on earnings per share growth," she says. "Companies just chase acquisitions to meet earnings growth without thinking about the returns that are being generated on the dollars spent. That happens time and time again and is a massive red flag." In this episode of The Rules of Investing, Burns takes listeners through some of the companies that have managed to pass her filters, as well as why catalysts are so important for investors with a penchant for value.

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

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

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

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

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

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

“Over the past four and half years, the small-cap index has returned 3% per annum. If you look at the 30 years before we launched the fund, it was 10% per annum. So quite a significant underperformance, quite dismal in fact,” Stott says. However, late October 2023 marked a turning point and the small-cap index has recently entered a technical bull market, having rallied more than 20%.

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

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

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

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

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

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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.

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

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

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

"A lot of investors are trying to chase a very small number of stocks in Australia because of the AI trade," he says. "And I'd just be a bit wary about that because although those companies absolutely should benefit, it's just how quickly those benefits flow through and whether the market has just got a bit ahead of itself in terms of the benefits that will come through in the medium term." In this episode of The Rules of Investing, Clark sits down with Livewire's Ally Selby for a conversation on all things artificial intelligence, growth investing and holy grail stocks.

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

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

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

Timecodes:

0:00 - Intro
1:54 - Ben Clark's outlook for the remainder of 2024
4:17 - Record cash holdings in the US and what this means for markets
6:51 - Why Aussie investors are also holding a lot of cash
7:39 - The most common question Ben Clark is hearing from clients
10:01 - The takeaways from Ben's trip to SXSW in the US
12:13 - Learnings from a private meeting with a Google executive
15:11 - The outlook for Microsoft (NASDAQ: MSFT) and Google (NASDAQ: GOOGL)
16:25 - Can the momentum continue for global AI winners like Nvidia (NASDAQ: NVDA)
19:17 - The ASX-listed stocks that directly benefit from AI
23:17 - Why some of these stocks' share prices may have gotten ahead of themselves
24:30 - Holy grail stocks - and why Brickworks (ASX: BKW), WiseTech (ASX: WTC), REA Group (ASX: REA) and CSL (ASX: CSL) make the cut
29:32 - Where Ben Clark has started to take profits
31:28 - And where he is putting that cash to work
36:11 - One thing the market is getting wrong today
38:03 - Lessons for growth investors from the 2022 bear market
42:59 - A stock to buy and hold for the next five years

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If there is one theme that has taken the world by storm in 2024, it's Artificial Intelligence or AI.

Until very recently, this week's guest was a bit of a sceptic, but a recent trip to the US has seen him come back a changed man.

In this episode, we'll be sitting down with investment adviser Ben Clark of TMS Capital. We'll be learning about the wonderful world of growth investments, the key technological innovations that have him excited and his top holy grail stocks.

Here's a sneak peek of what you can expect...

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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* 0:00 - Intro * 2:21 - BlackRock's outlook for the next 12 months * 4:06 - What the new investing regime means for ETF investors * 6:17 - The five "mega forces" of investing * 9:13 - Currency impacts on ETF returns * 10:27 - Will the Australian Dollar rebound in late 2024? * 13:45 - Should investors consider hedged ETFs? * 14:55 - Opportunities in Japan and the US * 16:47 - Why the AI boom won't be early 2000 all over again * 18:02 - The explosion of interest and uptake in ETFs * 21:31 - The asset class that could gain the lion's share of growth in the future * 23:17 - Other interesting innovations in the global ETF market * 25:06 - Which products are seeing the most inflows and outflows in 2024? * 27:31 - The Rules of Investing's regular questions (with an ETF twist)

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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.

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

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

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

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

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

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

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

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

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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.

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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

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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

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

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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

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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.

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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.

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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.

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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

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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)

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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

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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

Get my 3 Bell Potter stock reports now.

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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?

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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.

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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 60/30/30 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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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.

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

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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.

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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

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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

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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.

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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.

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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

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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

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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!

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.

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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

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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.

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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

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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.

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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

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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.

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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

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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!

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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

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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.

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.

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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

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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)

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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.

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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)

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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.

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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

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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.

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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.

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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

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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)

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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.

Timestamps1:30 - 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

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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 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.

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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

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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.

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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.

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The Smorgon family is one of Australia’s great wealth stories. What started out as a Kosher Butcher in Carlton has grown into a family office worth about $2.7 billion.

In the upcoming episode of the rules of investing, I sit down with Peter Edwards – a fourth generation Smorgon 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.

Here’s a preview of what you can expect.

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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.

Timestamps2:30 - 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.

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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?

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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)

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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 Phil Hofflin, Portfolio Manager on the Australian Equity Team at Lazard Asset Management.

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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

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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.

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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.

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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.Timestamps1:40 - Leaning from mentors, past and present3:15 - It's not only what you own, it's what you avoid5:00 - Why the Aussie market has outperformed global peers8:00 - Cash is king14:00 - Stress testing companies18:30 - Defensive anchors20:00 - Getting in early with Mineral Resources (ASX: MIN) 22:00 - Upgrade the quality when the market falls23:00 - Buying blips28:04 - A business made for Buffett

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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.

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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.

Timestamps1:30 - 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

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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.

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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

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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.

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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.

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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.

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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

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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.

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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 hold 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.

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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

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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.

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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

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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

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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.

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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

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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.

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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

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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.

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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

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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'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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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Guest: Matt Haupt, Lead Portfolio Manager, Wilson Asset Management. Large cap Australian stocks are often purchased for their income, franking credit, and defensiveness, but can undervalued growth stocks be found at the big end of town? Matt Haupt, Lead Portfolio Manager of the WAM Leaders LIC thinks so, however, it requires a different approach to small caps. At the smaller end of the market, growth is driven by stock specific factors, but among large caps, macro plays a much more important role.

“You don’t have the growth in the larger companies, because they’re linked to the fundamental economic backdrop. There’s more of a macro factor built into the larger companies.”

In this week’s episode of The Rules of Investing, we discuss his take on the sustainability of the current rally in iron ore, whether or not the recent RBA rate cuts came in time to stop a recession, and his current views on one of the hottest sectors in the market right now.

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Nick Griffin, the founding partner and Chief Investment Officer at Munro Partners, is a self-described "growth" investor. In a world where labels are often confusing and unnecessary, he explains how equities differ from other asset classes in the sense that most other asset classes "mean revert" to a certain degree.

In the equities game, stocks can rise by thousands of per cent, yet only fall 100 per cent. And while plenty more fall by 100 than rise by 1000, the stocks in the latter camp are invariably "growth" stocks.

As Nick sees it, the beauty of growth equities, and stocks in general, is that the information dissymmetry between the market participants is so much bigger than it is in other asset classes, given there are so many different variables at play.

These are what enable growth investors to discover great investments.

In this engaging discussion, Nick explains why it is "asymmetrically" in investors' interest to own equities, and that if they can identify those stocks that are benefitting from the structural changes that are happening all around us every day, they will "win".

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Guest: Roger Montgomery, Chief Investment Officer, Montgomery Investment Management.

Australian house prices and the economy stand at an important crossroads. On the one hand, we have the return of the Liberal-National coalition, the softening of APRA regulations, and rate cuts from the RBA, which all stand to stimulate. On the other hand, we have housing starts down by over 25% over the last year and showing no signs of turning, combined with anaemic retail sales, with the potential to push the economy into a dark place. One rarely discussed dynamic, however, is what Roger Montgomery, Chief Investment Officer at Montgomery Investment Management, calls 'the economics of enough'.

“People have borrowed enough, they’ve bought enough stuff, and eventually growth slows, and that’s where you get deleveraging occurring in the economy, where credit growth is slower than economic growth. I think there’s a risk that we’re now in that deleveraging phase.”

In this week's episode of The Rules of Investing, Roger shares what "quality" really means to him, some lessons on late cycle investing from Buffett himself, and we discuss two outwardly-similar companies with very different long term prospects.

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Guest: Michelle Lopez, Head of Australian Equities, Aberdeen Standard Investments.

As soon as she was able to open a trading account, Michelle Lopez bought shares in ASX, seeing it as a monopoly business crucial to the function of financial markets. She still owns those shares today.

After 15 years with the firm, Michelle was recently made Head of Australian Equities at Aberdeen Standard Investments, a global manager with $914 billion of assets to invest. The small cap fund that she has been managing for the past decade has returned 11.5% per annum after fees, beating the index by 4.9%.

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Guest: Warryn Robertson, Lazard Asset Management.

An investor's job can be boiled down to two primary tasks, explains Warryn Robertson, Portfolio Manager at Lazard. First, to predict what a company's cash flows or earnings will be in the future, and secondly, to work out how much to pay for those earnings. Estimating two unknowns like this is a big challenge for equity investors, so why not make it easier? By investing in businesses with cash flows that can be easily predicted, this reduces uncertainty, and allows them to focus on the other half of the equation.

“If you can find a group of companies that has more predictable earnings, more consistent cash flows, you’re making your job as an investor much easier in terms of arriving at that valuation. That is, in essence, the overriding philosophy that I’ve had throughout my investing career.”

In this week’s episode of The Rules of Investing podcast, we discuss some unique benefits that come from investing in infrastructure equities, how he avoids the dreaded "value trap", and one area of investment he thinks could see significant negative returns in the coming years.

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Guest: Dr Don Hamson, Plato Investment Management. Host: James Marlay, co-founder, Livewire Markets.

In year 427BC, the Greek philosopher Plato founded ‘The Academy’, which is considered the world’s first university. It is somewhat fitting then that half of Sydney-based fund manager, Plato Investment Management’s team have PhD’s.

With so much grey matter focused solely on generating equity income for their clients, it’s no surprise the results are impressive. Managing Director, Dr Don Hamson, shared in this interview that their investors will have received 16% gross yield after fees this financial year. That's about 10% above the gross yield of the index, though Don cautions that these were ‘abnormal returns’ supported by some political and corporate one-offs.

So what is the outlook for dividends post-election? In our latest fund manager interview Don addresses this question, highlights one part of the market that remains under-appreciated for income and explains what he believes is the single most expensive asset in the market today.

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Guest: Paul Skamvougeras, Head of Equities, Perpetual.

In the lead up to the tech wreck of the early 2000s Paul Skamvougeras was working on the dealing desk at Perpetual. The ‘value’ focused manager was struggling to keep pace with a market full of exuberance and momentum. Nearly two decades later Skamvougeras, now Head of Equities at Perpetual, says the same patterns and behaviours are becoming prevalent again.

Skamvougeras doesn’t shy away from the immediate challenges facing Perpetual and other value investors; however, he remains uncompromising on the quality of the companies he is willing to own and the price he will pay to own them.

In this interview, Paul explains why there are certain ‘non-negotiables’ when it comes to buying stocks, shares a forgotten opportunity on the ASX and makes his case for why ‘value’ is not dead.

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Back in February, Chris Watling, CEO and Chief Market Strategist at Longview Economics, wrote that a recession in Australia was likely, and that rates would be cut to zero if this happened. While he acknowledges that a lot has changed in Australia since then - not the least of which being the surprise re-election of the coalition government - his base case remains that a recession is on the way.

"The basic thesis on recession is that housing was in a bust phase, and the bust phase will probably be bigger than 10-15% peak to trough. Obviously we're having a bounce in house prices now that questions that, I personally think it's probably a head-fake."

In the latest episode of The Rules of Investing podcast, Chris discusses his views on Australia in-depth. He also shares why the outlook for the US is more positive, shares his favourite chart in the world today, and discusses eight key asset bubbles globally.

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When Walter Schloss founded the funds management firm that bore his name in 1955, markets were a very different place. Schloss harnessed the power of Ben Graham's "net-nets" strategy and managed to outperform the market by more than 5% p.a. over the next 45 years. But could such a simple strategy work in today's deeply researched markets? Steve Johnson, Chief Investment Officer of Forager Funds thinks so. But why isn’t every fund manager pursuing this strategy?

“I still know people who are making exceptional returns doing that… Does it still work? Yes, it absolutely still works if you’ve got $500,000 or $1 million dollars.”

In this week’s episode of The Rules of Investing podcast, we discuss the biases that fund managers and private investors are most susceptible to, how to separate luck from skill, and his approach to properly valuing a business.

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Charlie Aitken has a simple investment philosophy: Build a concentrated portfolio of the world's best companies in structural growth sectors. And for this week’s Rules of Investing podcast, I had the rare opportunity to sit down with Charlie for 46 minutes to hear how this translates into practice.

While the market grows anxious about the rapidly metastasising trade war, Charlie explained in our discussion how he sees it as a ‘tremendous opportunity’ to grow exposure to world-leading companies, and went on to nominate four such stocks right in the firing line right now.

I really enjoyed recording this podcast in which we covered a great deal of other ground, including his transition into funds management, advice to his younger self, and why it’s ‘Australia for income - and global for growth’.

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Guest: Ben Griffiths, Principal and Portfolio Manager of Eley Griffiths Group.

When Isaac Newton first posited that an object in motion would stay in motion unless acted upon, he probably wasn't thinking of stock markets. But hundreds of years later, the same principle has been adapted for investors; or "the trend is your friend" as it's more commonly stated. While this rule of thumb can be pretty handy, there are rare moments in financial markets where everything can turn on a dime, and suddenly that trend doesn't look so friendly. George Soros called these times 'inflection points', and according to Ben Griffiths, Principal and Portfolio Manager at Eley Griffiths Group, we stand at one of these crossroads today.

“It is classic exhaustion price action. Bulls aren’t sure if they’re convinced anymore, and bears are in the process of giving up after that strong run-up from December. It’s what markets do best at turning point; they confound the bulls, they trip up the bears, and they generally exhaust investors.”

In this week’s episode of The Rules of Investing podcast, Ben explains why the Australian economy could be doing better than it seems, how he knew it was time to start buying shares near the bottom of the GFC, and three simple investing rules that’ve served him well.

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Guest: Campbell Neal, co-founder, Managing Director, and Senior Portfolio Manager at K2 Asset Management.

Finding cheap stocks this late in the cycle is getting harder and harder. Index funds have bid up the prices of large cap stocks to levels not seen since the tech bubble, while mid-cap growth stocks like Afterpay and Wisetech have been bid to dizzying heights. But attractive opportunities are still out there, if you look hard enough.

This week's guest on The Rules of Investing is Campbell Neal, co-founder, Managing Director, and Senior Portfolio Manager at K2 Asset Management. In this episode, Campbell identifies one ASX small cap that's on a PE ratio of 10, yields 8%, and has all the hallmarks of a mini-Macquarie.

"I believe it's like a small Macquarie Bank. It's listed here in Australia.... The stock's done extremely well over the few years it's been listed. I think it's going to continue to grow."

Tune in to hear which stocks he plans to short (when the time is right), and why he believes large cap stocks are the most overvalued they've been for many years.

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Guest: Dr Philipp Hofflin, Lazard Asset Management.

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It’s a rare opportunity to get to sit down with an economist of the calibre of Tim Toohey from Ellerston Capital. He was formerly the Managing Director, Chief Economist, and Head of Macro Strategy for Australia and New Zealand at Goldman Sachs, where he earned a reputation as one of Australia’s best macro forecasters. In 2017, he joined Tudor Investments’ star portfolio manager, Brett Gillespie, in setting up the Global Macro Fund at Ellerston Capital. So, when offered the opportunity to talk to Tim for the best part of an hour, I made sure to cover off all the big topics concerning investors today; Australian rates and consumers, Fed policy, the turnaround in China, and of course, the possibility of a housing-driven recession in Australia. Tune in to the latest episode of The Rules of Investing podcast below to hear his take on the world today.

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Guest: Robert Millner, Chairman, Washington H Soul Pattinson.

In the last 117 years, Australia has seen two World Wars, the great depression, introduction of the motor car, 30 Prime Ministers, and every year, Washington H Soul Pattinson (SOL) has paid a dividend. In this week's episode of The Rules of Investing, I sit down with Robert Millner, the longstanding Chairman of SOL. While SOL started life as a pharmaceuticals business, today it's a cornerstone shareholder in TPG Telecom, Brickworks, New Hope Corporation, and dozens of smaller companies.

Over the last 40 years, total shareholder returns have compounded at a rate of 17.3%. This is a record that rivals that of some of the most well-known investors globally.

Tune in below to hear his view on the future of coal and agriculture in Australia, why he's not interested in buying banks at current levels, and what he thinks has been the key to Soul Patts' success.

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In late December of 2018, I received an email that caught me by surprise. It came from someone I’d never met with an unexpected proposition. The concept was to kick off 2019 with a constructive discussion between the Chief Investment Officers of Platinum Asset Management and Magellan Financial Group.

I say ‘unexpected’ because the two firms are often viewed as rivals in the Australian funds management industry. In reality, many investors consider the strategies as complementary, and as we learn in the first instalment of a two-part discussion, they even share some common ground on where they are investing.

Tune in as we take you inside the minds of Andrew Clifford and Hamish Douglass to explore their investment philosophies and discuss the challenges and opportunities that lie ahead.

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Guests: Tom King, OAM; Simon Holmes à Court.

When Al Gore’s “An Inconvenient Truth” was released 13 years ago, it brought the issue of climate change to the fore of people’s minds around the world. It might surprise you then, that the effects of greenhouse gasses have been known since 1896. However, despite the huge progress made over the last decade or more, the IPCC Fifth Assessment Report released in 2018 showed that at the current rate, warming will reach 1.5 degrees by 2052. Avoiding this will require the largest globally-synchronised effort the world has ever seen.

This week’s guests on The Rules of Investing are Tom King OAM, and Simon Holmes á Court. Tom is the co-founder of Nanuk Asset Management, which is focused on investing in industries that contribute to improving global sustainability and efficiency. Simon is an energy transition specialist who founded Australia’s first community owned wind farm and is a senior adviser to the Climate and Energy College at the University of Melbourne.

In the latest podcast, we debunk some common myths about the role of solar and wind in the energy grid, discuss the investment case for sustainability, and why some people still deny the science of climate change.

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This week’s guest on the podcast is Jeff Cole, Founder and Director of The Center for the Digital Future, and a member of the investment committee for the E&P Global Disruption Fund. While Jeff’s is far from a household name, his work has been at the core of the media industry over the past three decades. He founded the World Internet Project 19 years ago and has presented his insights to the White House, the FCC, and the Department of Defense. He's testified before congress, he's held a joint press conference with President Bill Clinton, he even produced two films with Vice President Al Gore. This week on The Rules of Investing, we'll discuss the current media landscape in Australia and how it's changing, the bleak future for employment, and what went wrong for MoviePass, which caused its parent company to fall more than 99.999%.

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Guest: Marcus Padley, Director, Marcus Today. Popular wisdom from the likes of Warren Buffett, Jack Bogle, and Burton Malkiel (author of A Random Walk Down Wall Street) states that it's near-impossible to consistently time the market, so why even try? Just buy and hold for the long term, and collect your dividend cheque every six months. Marcus Padley, Director of MarcusToday, disagrees. "You can't just sit in the market long-term, which is what everybody wants you to do. You have to time it." Marcus points out, that the average annual capital return over the last 75 years, after inflation, taxes, and costs is close to zero. In this week’s episode of The Rules of Investing, he explains his process for getting the timing right, why he thinks the housing market is close to the bottom, and his top candidates to surprise to the upside this reporting season.

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Guest: Jeremy Cooper, Chairman of Retirement Income, Challenger Ltd.

10 years ago, Jeremy Cooper, now Chairman of Retirement Income at Challenger, Chaired the Federal Government’s Super System Review, commonly known as the Cooper Review. With the final report from the Banking Royal Commission due to be released in a couple of days, we took the opportunity to talk to Jeremy about the current state retirement in Australia. “Retirees are well aware of increasing life expectancies, and we’re in an environment where self-provision is the order of the day. There are not a lot of people who aspire to living solely on the aged pension. So, they’re underspending – they’re being too frugal. They’re doing this because in our system, we’re effectively asking them to self-insure.” In this episode of The Rules of Investing, we discuss what worked and what didn’t from the Cooper Review, his take on the Banking Royal Commission, and the investment risks that matter to retirees.

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Guest: Andrew Clifford, Chief Investment Officer, Platinum Asset Management. Host: James Marlay, co-founder, Livewire Markets. If you’d invested $20k with Platinum Asset Management when the firm opened in 1995 you’d be sitting on around $320k today, a return of ~12.6% per annum*. However, the journey to these returns may have tested your nerves. The active style at Platinum means that periods of exceptional performance are, at times, accompanied by periods underperformance versus the market. Right now, is one of those periods for Andrew Clifford and the team at Platinum. In this exclusive interview, Clifford takes you inside the investment process at Platinum and applies it to the challenges of today’s volatile environment.

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Guest: Chris Stott, former CIO of Wilson Asset Management. Host: James Marlay, Executive Director & Co-founder of Livewire Markets.

At age 37 Chris Stott has called time on his investment career at Wilson Asset Management. Given the current state of markets I took the opportunity to have one final chat to hear his views on the year ahead. He presents a bearish outlook for the Australian economy fuelled by falling house prices and weak consumer sentiment.

But that doesn’t mean you can’t find good companies to invest in and make a return...

Tune in to hear about the attributes that Stott seeks out in difficult markets, lessons from his best and worst trades and one last call on a stock that can deliver regardless of the economic backdrop.

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This week on The Rules of Investing podcast, we've got a special episode featuring three guests from Future Generation (ASX:FGX & ASX:FGG). The Future Generation companies are set up to provide charities with an annual stream of donations, with providing shareholders with exposure to the best fund managers without fees. The first guest is Louise Walsh, CEO of both Future Generation companies, she'll talk about some of the company's achievements, both on the charitable and investment fronts. Then Jun Bei Liu from Tribeca Investment Partners and Tony Waters from QVG join us for a special panel discussion discussing some of the key issues facing Australian investors today.

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Guest: Tim Hillier, Allan Gray

Contrarians can be a lot like teenagers: they think they’re all different but end up looking the same. This however, is not true of this week’s guest, Tim Hillier from Allan Gray. Case in point: when asked what stock he’d own if the market were to close for five years, Tim spent longer explaining the issues with his stock of choice than the positives. At Allan Gray, their contrarian streak even extends beyond their investment decisions to their hiring policies; as a rule, most of their hires come from outside the funds management industry.

In this week’s episode of The Rules of Investing podcast, he tells us how financial statements tell a story, he explains the dynamics of a changing Australian media landscape, and he shares his thesis on two truly contrarian stock ideas among Australian large caps.

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Regular readers of Livewire will know Matthew Kidman from his role as ‘anchorman’ for the popular Buy Hold Sell video series. He has also played a critical role in expertly moderating panel sessions at the annual Livewire Live investor event.

Matthew is a highly accomplished investor with an impressive track record. Following 13 years at Wilson Asset Management where Kidman established his own firm Centennial Asset Management.

A common request we receive at Livewire is to hear Matthew’s views on investing and markets. Today, we’re delighted to bring you an in-depth discussion covering Matthew’s investment philosophy, his current views on equity markets, two small cap ideas that meet his criteria, one investment lesson that keeps coming back to bite him and plenty more...

Guest host: James Marlay, co-founder and Executive Director at Livewire Markets.

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Two small cap ideas with years of growth ahead by Livewire Markets

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Guest: Tim Slattery, CEO, APN Property Group

With all the focus on residential property, investors could be forgiven for forgetting that other property classes exist. But between office, industrial, retail, and healthcare, there's a whole world of property out there that remains unexplored for many investors. With this in mind, this week's guest on The Rules of Investing is Tim Slattery, CEO of APN Property Group, who's led over $8 billion worth of property deals in Australia and Europe. Tim's experience covers everything from retail and office, through to healthcare and industrial. This in-depth interview covers some of the risks and opportunities in Australian property today, how the GFC changed the face (and balance sheet) of the AREIT industry, and how ecommerce is transforming industrial property today.

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This week’s guest on The Rules of Investing (ROI) is Ben McGarry, founder and Portfolio Manager at Totus Capital, and an expert in short selling. Ben started his career at an accountant at PWC, allowing him to gain skills that would be invaluable later as he searched for frauds, fads, and failures on the short-side of his fund’s portfolio.

Tune in below to hear about the accounting tricks companies use to mask their true performance, his public short on a household name, and why it took a public short-report from Glaucus to bring attention to the issues at Quintis and Blue Sky.

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Guest: Michael Thawley, AO,Vice Chairman of Capital Group International.

Whether you're investing in equities, debt, or alternatives, uncertainty is an inescapable part of the game. But Michael Thawley, AO, Vice Chairman of Capital Group International, says this current period of political uncertainty is unique; "I've never been more unsure about what the future holds than I am now." And he should know, having spent 46 years in foreign affairs, diplomacy, and politics. His appointments have been wide ranging, including International Advisor to John Howard, Australian Ambassador to the USA, and Secretary of the Department of Prime Minister. Now, having left political life, he advises Capital Group, the world’s largest active fund manager, on important geopolitical issues. In this week’s episode of The Rules of Investing, we discuss the US-China trade war, Australia's relationship with China, and we'll hear about the time he was personally invited to the Whitehouse by President George W Bush.

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When a young Charlie Jamieson arrived at work in London on September 11th, 2001, little did he know how much that day would affect his views on markets. At the time, he was trading US Dollar bonds from Merrill Lynch’s London office, having just left the New York office three weeks earlier. It was a harrowing time, but it wouldn’t be the last time that he faced a major catastrophe as an investor. Years later, he found himself managing Euro portfolios throughout the GFC and the Euro Crisis. While many investors would remember the equity sell-offs that follow, these crises were often centred around debt markets. But it’s not just times of crisis that rates matter, in the full podcast, Charlie explains why interest rates are the virus that affects all assets.

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Guest: Nick Griffin, Chief Investment Officer at Munro Partners.

For decades, traditional wisdom has held that value investing is the only way to outperform, and with good reason. Until the GFC, value had outperformed growth in all but a few brief periods, and those periods immediately preceded a major bear market. But for nearly a decade now, growth has produced superior returns.

While some may argue that zero interest rates and quantitative easing are to blame/thank (depending on your positions), a look at the top 10 companies in the world tells a different story. As the world exited the worst of the GFC, the top 10 companies in the world were all traditional businesses – oil, supermarkets, banks, and telcos. 10 years later, the list is dominated by digital businesses.

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Paul Moore, founder & CIO of PM Capital, discusses his big picture views, characteristics of investments to own and avoid, examples of current pricing anomalies and one major risk being caused by investor crowding.

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This week's guest is Simon Mawhinney, Chief Investment Officer of Allan Gray. We learn about the ‘feast and famine' nature of contrarian investing, why a long-term approach is essential to success, and then finish with Simon’s contrarian case for Telstra.

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In the ‘go-go 80s’, a young Alex Waislitz worked for the legendary Australian entrepreneur, Robert Holmes á Court. Holmes á Court was Australia’s first billionaire, though he lost much of his fortune in the ’87 crash – a valuable lesson for the young Waislitz. Some 30 years later, Waislitz has built a fortune of his own, primarily through investing well. In an exclusive interview with Livewire, Waislitz explains one of the key lessons he learned working for Holmes á Court: "I learned from him to look for hidden value that others may have overlooked… He was a master at identifying value that others seemed to disregard. I'm always looking for the jewels - what is there in the company that hasn't been noticed?" In our latest podcast, we take a dive into the process that’s allowed him to achieve outstanding returns, including his top reasons to walk away from a potential investment.

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Today's guest is Kurt Winrich, Co-CEO and Portfolio Manager at WCM Investment Management, and he’s got a very different take on what a great long-term investment looks like. When Warren Buffett first started buying businesses with ‘moats’ in the 80s, such as Coca Cola, his disciples thought he was crazy. More than 30 years later, buying businesses with a moat is accepted wisdom. Morningstar even offers a 'moat rating' on thousands of stocks from around the world. WCM is a staff-owned firm in Laguna Beach in California that manages over AU$36B for clients globally. They act as the investment advisor for Contango's Global Growth LIC, and will shortly be launching an Exchange Traded Managed Fund on the ASX. In today’s podcast, we discuss the importance of culture, why the size of your moat doesn’t matter, and where the world’s biggest opportunities will come from in the coming years.

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Geoff Wilson, Founder and Chairman of Wilson Asset Management, discusses how he identifies outstanding fund managers, buying a dollar for eighty cents, and how he and Matthew Kidman worked together to identify when it was time to sell ABC Learning... before it all blew up.

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This week's guest is Jim Mellon, billionaire investor, speaker, and co-author of Juvenescence: Investing in the Age of Longevity.

We discuss: * His 2005 book that predicted the oncoming storm of the GFC * The coming bear market in tech stocks and why he’s short Facebook * The new developments in the treatment of cancer, heart disease, lung disease, and diabetes that could significantly improve survivability * The changes in lifestyle that are already extending our lifespans Medications that could dramatically extend lifespans and healthspans * The winners, losers, and economic effects of longer lives

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Peter Cooper is the founder and Chief Investment Officer of Cooper Investors, one of Australia’s leading boutique investment firms. His success is probably best conveyed by the incredible performance of the CI Brunswick fund, which he manages personally. This fund has outperformed the ASX200 Accumulation Index by a cumulative 537%, or 8.3% p.a. since inception in 2004.

In this week’s podcast, we discuss: •Two exciting ‘clusters’ of investment opportunities that have him excited today, including his ‘big idea’ for the next 30 years •The two different types of value (value creators and reversionary value) and why you need to think about them differently •Two ASX small caps floats that he’s participated in over the last year, and why he likes the companies so much •A personal story of some of the philanthropic work that CI have undertaken •Which ASX stock he’d want to own if the market were to close for five years.

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This week's guest is Giselle Roux, Chief Investment Officer at Escala Partners. We discuss where we are in the interest rate cycle, how to invest as rates rise, and whether the Fed can manage a rate-hike cycle without causing a recession.

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Dr Don Hamson from Plato Investment Management discusses some common mistakes that investors make, how to avoid a dividend trap, and heard his views on the suggested changes to dividends.

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Disruption is everywhere these days. Whether it’s Amazon and Kogan disrupting traditional retail, Facebook and Google disrupting print and television advertising, or Netflix disrupting pay TV, it’s impossible to avoid. Incumbents face the dilemma of disruption: adapt to new ways and risk hurting their existing business, or stick to their existing model and risk becoming redundant in an ever-changing world. At the forefront of digital disruption are the global tech giants; Amazon, Baidu, Tencent, Alibaba, Google, and Facebook, to name a few. This week’s guest on Livewire’s Rules of Investing is Alex Pollak, CEO of Loftus Peak, which specialises in investing in these global disruptive businesses. In this episode, we discuss which firm has the best CEO, whether the Chinese firms can challenge the Americans on their own turf, and whether technology stocks are in a bubble.

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In the first podcast for 2018, Livewire Editor, Patrick Poke, sits down with Dr Shane Oliver, Head of Investment Strategy and Chief Economist at AMP Capital. The topic at hand is Australia: the share market, the economy, wages, and of course, house prices. They discuss UBS's report late last year that "Australia's 55-year housing boom has come to an end." Is this hyperbole, or is there a nugget of truth? Oliver says that while a crash is oversold, he expects to see a fall of 5-10% in capital city house prices. So, tune in here for the first episode of Livewire’s Rules of Investing for 2018.

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In Livewire's final podcast for 2017, Livewire's Co-Founder and Managing Director, Tom McKay, sits down with Niki Scevak, Partner and Co-founder of Blackbird Ventures, one of Australia's most successful VC firms. With a keen interest in public markets and the teachings of Munger and Buffett, Niki provides a unique perspective on VC investing. He was also a university classmate of Australian billionaire and Atlassian Co-Founder, Mike Cannon-Brookes. In this fascinating podcast, they discuss what makes a great management team, some 'red flags' to look out for, and what's he's most excited about right now. Make sure you stick around to the end to hear which of the big tech companies has the best chance of being a world-leader ten years from now.

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A 1640% gain in a calendar year is not something you see very often, but that’s what Bitcoin holders have experienced so far in 2017. Jordan Eliseo, Chief Economist at ABC Bullion, called it “the best bull market in finance” when we sat down recently to record the latest episode of Livewire’s Rules of Investing. But is Bitcoin really the future of money, as the bulls would have you believe? To achieve these lofty goals, it will need to displace the USD, Euro, Renminbi, and gold. So, can Bitcoin overcome the naysayers and become the ‘Amazon of money’, or is this giant bubble waiting to pop? Find out in the latest podcast below.

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