The Rules of Investing

Tough medicine: Trump 2.0 is a structural break for economies and markets

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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Thanks to our Sponsor AlphaSenseThis latest episode is brought to you by AlphaSense.See what AlphaSense can do for your investment research—visit alpha-sense.com/livewire to get started.

“We’re buying”: Emma Fisher spots a rare chance to upgrade the portfolio

“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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Thanks to our Sponsor AlphaSenseThis latest episode is brought to you by AlphaSense.See what AlphaSense can do for your investment research—visit alpha-sense.com/livewire to get started.

The world is complex. Beyond the headlines is where the real opportunities lie

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.
Thanks to our Sponsor AlphaSenseThis latest episode is brought to you by AlphaSense.See what AlphaSense can do for your investment research—visit alpha-sense.com/livewire to get started.

Jun Bei Liu: 2 stocks for the bottom drawer and how to play the only realistic scenarios left for 2025

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 AlphaSenseThis latest episode is brought to you by AlphaSense.See what AlphaSense can do for your investment research—visit alpha-sense.com/livewire to get started.

Steve Johnson: Two small caps on a run and the uncovered gems that could be next

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!

Cuts are coming, equities are full, and Trump is being underestimated by everyone

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. 

Fight the FOMO with 4 stocks the herd is overlooking

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 articleSeneca's M&A list

How to invest $1 million in 2025

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
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