The Rules of Investing

3 Aussie stocks for today’s market

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.

Why Platinum is short US tech stocks and long China

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.

What war in Ukraine means for investors

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.

The real reason Aussie housing is expensive

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. 

One sector with 50 years of growth ahead

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. 

Quality and growth: How Ben Clark consistently finds winners

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. 

The biggest opportunity since the internet

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. 

Uranium Special - The fundies‘ view (part 3)

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.