Buy Hold Sell, by Livewire Markets

Buy Hold Sell: 3 defensive darlings for the next market pullback (and 2 to buy when it does)

Traditional long-only investors, who don't tinker with their cash levels much, typically participate in all of the market's upside when it is flying and all of its downside when it's not. Markets typically increase over time, so this is a perfectly acceptable way to invest. 

Long/short investors, however, can also profit when markets fall—but that's too simplistic an explanation. It suggests that long/short managers make money equally when markets go up and down, which is rarely the case. 

Because long/short managers are also active beta managers (i.e. they pick stocks to outperform a benchmark or achieve a specific objective), they typically capture most of a market's upside while significantly limiting losses on the downside. 

That means that much of their alpha (overall outperformance) is often generated by providing much better protection when things are bad versus smashing the market when it is flying. 

With all that in mind, what better time to ask two long/short managers for their top defensive picks than right now - when equity markets are at all-time highs and valuations are on the ritzy side? 

On this episode, Livewire's James Marlay is joined by Jun Bei Liu from Tribeca and David Moberley from ClearLIfe Capital for their analysis of five stocks that could weather a coming downturn - whenever that may be.

Note: This episode was recorded on Wednesday 6 November 2024.

Buy Hold Sell: The best and worst investment ideas from 5 ASX sectors

One key function of long/short fund managers is to compare similar companies and trade them against each other.

These companies are often found within sectors but can also be found across sectors, as companies with similar characteristics.

Once identified, a long/short manager will buy the stronger-performing company in the pair and sell the weaker-performing company. This is known as a 'pairs' trade. This strategy also has the benefit of being market-neutral (given one long and one short trade in the pair).

The ASX is littered with potential pairs trading opportunities. Some examples include Coles and Woolworths, Fortescue and Rio Tinto, and Santos and Woodside.

Given the focus on comparing companies and actively trading them against each other, who better to ask for their best and worst picks in a sector than a couple of long/short fund managers?

For those who love stock picks on both sides of the ball, this episode is for you.

Livewire's James Marlay was joined by Tribeca Investment Partners' Jun Bei Liu and ClearLife Capital's David Moberley to discuss their best and worst picks in five different sectors.

Note: This episode was recorded on Wednesday 6 November 2024.

Buy Hold Sell: Hunting for value among 5 of the ASX's most shorted stocks

Lithium darling Pilbara Minerals has overtaken Flight Centre as the most-shorted stock on the ASX. After what seems like years at the top of the list, the travel company has dropped down to the 30th most-shorted stock on the ASX - with a short interest of 5.75%. 

Today, only two of the 10 most-shorted stocks are not miners - while out of the top 20, only seven stocks are not within the minerals and resources sectors. It's fair to say then that the market remains bearish on the outlook for many of these stocks - with lithium and uranium miners heavily featured in the list. 

So, is there any value among the most shorted stocks on the ASX? Or should investors be steering clear of these stocks? 

To find out, Livewire's James Marlay was joined by Tribeca Investment Partners' Jun Bei Liu and ClearLife Capital's David Moberley. 

They analyse three of the most heavily shorted stocks on the ASX - including Boss Energy, IDP Education and Seek - and each name a stock that they believe could see a short squeeze. 

Note: This episode was recorded on Wednesday 6 November 2024. You can read an edited transcript below.

https://www.livewiremarkets.com/wires/buy-hold-sell-hunting-for-value-among-5-of-the-asx-s-most-shorted-stocks/  

Buy Hold Sell: 5 stocks with controversial leaders

Locally, founder-led businesses have been making headlines for all the wrong reasons. Take the downfall of Australian tech billionaire Richard White of WiseTech Global, for example, or the tax scandal claims circling Mineral Resources' Chris Ellison. 

On the global stage, founders can be far more divisive. Elon Musk is now being sued by Philadelphia's district attorney over his US$1 million daily election giveaways in a bid to boost Donald Trump's election campaign. In response, he posted a photo of a daily winner with a cheque on his social media platform X. Meanwhile, scandals seem to continuously orbit Facebook/Meta founder Mark Zuckerberg - who has been accused of (among other things) being a robot. 

In China, Alibaba's founder and leather jacket enthusiast Jack Ma literally disappeared after criticising the Chinese government. Many thought he was dead. 

So, is it worth investing in companies with controversial CEOs, founders and leaders? Or should investors be focusing on companies with leaders who have their heads down and are focusing on business growth instead?

To find out, Livewire's Ally Selby was joined by Antipodes' Jacob Mitchell and Magellan's Arvid Streimann. 

Note: This episode was recorded on Wednesday 23 October 2024. You can read an edited transcript below. 

https://www.livewiremarkets.com/wires/buy-hold-sell-5-stocks-with-controversial-leaders 

Trump v Kamala: What a win for either party will mean for markets

We are only a week away from the US election - and it's arguably still anyone's guess who could win. 

Currently, betting markets have former US President Donald Trump at a 59% chance of winning a second term next week. That's despite Democrat nominee Kamala Harris leading in some of these same betting polls just one month ago. 

So, what would a Trump second term mean for markets? Or if Kamala pulls off the win, how should investors position their portfolios? 

In this episode, Livewire's Ally Selby was joined by Magellan's Arvid Streimann and Antipodes' Jacob Mitchell for a deep dive into the US election and its impact on investors. 

They discuss the macro forces that could shift as a result of a new administration or the status quo, the sectors and stocks that could benefit and suffer as a result of a Democrat and a Republican administration, and cast their prediction of who will become the next president of the United States. 

Note: This episode was recorded on Wednesday 23 October 2024. You can read an edited transcript below.

https://www.livewiremarkets.com/wires/trump-v-kamala-what-a-win-for-either-party-will-mean-for-markets  

Buy Hold Sell: 5 interest rate sensitive stocks for a new world of lower rates

With the US Federal Reserve cutting its cash rate by 50 basis points in September, Fitch Ratings predicts that the upper US federal funds target will fall to 4.5% by the end of the year, 3.5% by the end of 2025, and 3.0% by June 2026.  

Meanwhile, JP Morgan expects the Fed will cut by another 50 basis points in November. Looking out over the next few years, JP Morgan notes the Fed’s “dot plot” has four more 25 bp cuts (totalling 100 bp) in 2025. It also notes that the Fed has increased projections for its neutral funds rate by another eighth of a percentage point to 2.875% — which it expects to reach in 2026.

No one has a working crystal ball, but if expectations are anything to go by, interest rates (in the US at least) are on their way south. And while we may never see 0% cash rates again, lower cash rates are still positive for equities. 

So, in this episode, Livewire's Ally Selby was joined by Magellan's Arvid Streimann and Antipodes' Jacob Mitchell for their analysis of three interest-rate sensitive stocks that could benefit from this lower rate environment. 

Plus, they name two big buys that they are betting on today with this in mind. 

Note: This episode was recorded on Wednesday 23 October 2024. You can read an edited transcript below. 

https://www.livewiremarkets.com/wires/buy-hold-sell-5-interest-rate-sensitive-stocks-for-a-new-world-of-lower-rates/ 

Buy Hold Sell: 5 founder-led companies on the rise

Founder-led companies typically outperform their peers over the long term. Driven by a strong alignment of interest, a founder's long-term focus, and emotional dedication to a business's success, companies with founders at the helm are seen to be a safer bet than those with hired suits. 

Take Milford Asset Management, for example, which found the three-year performance of the founder-led stocks within their portfolio (23 companies) returned 24.9% per annum against the Small Ordinaries 2.7% to April 2024. 

Likewise, Solaris Investment Management found that over the last five years (from 2019 to 2024), the 12 largest founder-led companies on the ASX returned 420% while the benchmark accumulation index only returned 65%.

So, in this episode, Livewire's Ally Selby was joined by two Hall of Fame fund managers in Ellerston's Chris Kourtis and Airlie's Matt Williams for their analysis of five founder-led companies. 

Are these bottom-drawer stocks, or should these founders get the boot? You'll find out in this episode of Buy Hold Sell. 

Note: This episode was recorded on Tuesday 8 October 2024. You can read the edited transcript below.

https://www.livewiremarkets.com/wires/buy-hold-sell-5-founder-led-companies-on-the-rise 

Hall of Fame Special: How two of Australia's best invest

With decades of experience under their belts, it's fair to say that Ellerston's Chris Kourtis and Airlie's Matt Williams know a thing or two about investing. While their styles differ quite widely - Chris is a contrarian and Matt's all about quality and solid balance sheets - they both have their eyes keenly focused on their next opportunity. 

Interestingly, despite the different investment styles - valuation is one thing they can agree on - and make it clear that investors should take a fresh look at their portfolios and make sure they don't get caught out if we see a sell-off in the near future. 

Similarly, management is something that both our Hall of Fame fund managers are watching. However, while Matt is searching for businesses with teams that can execute well and help a stock soar, Chris is looking for missteps that could see the market punish a business far more than it should. 

So, in this episode, Livewire's Ally Selby sits down with Chris and Matt for their insights into how they are thinking about markets and the macro forces at play, as well as a deep dive into their strategies and what makes them tick. 

Plus, they also share one piece of advice so that investors can be successful over the next 12 months, and a stock that can help investors on their way. 

I should say this episode is quite long, so sit back, relax and get comfy. But then again, how often do you get to hear straight from two Hall of Fund managers in one episode? 

Note: This episode was recorded on Tuesday 8 October 2024. You can read the edited transcript below.

https://www.livewiremarkets.com/wires/hall-of-fame-special-how-two-of-australia-s-best-invest

Buy Hold Sell: 2 Hall of Fame investors analyse each other's best ideas

Each year, a fund manager is added to the Hall of Fame. It's an illustrious list, including only the best of the best Australian funds management talent - the likes of Olev Rahn, Kerr Neilson, Peter Morgan, Anton Tagliaferro, Catherine Allfrey and more. 

Given another name will be added to the list later this month, we've called on the big guns - Hall of Fame alumni Chris Kourtis from Ellerston Capital and Matt Williams from Airlie Funds Management, who were inducted into the Hall of Fame in 2018 and 2022 respectively. 

With a unique opportunity to have two Hall of Famers in one room, Livewire decided that the best use of their talent would be to pick apart each other's highest-conviction stock picks. 

So, in this episode, Matt and Chris share their best ideas today - and joyfully point out the holes in each other's theses. 

Note: This episode was recorded on Tuesday the 8th of October 2024. You can read the edited transcript below. 

https://www.livewiremarkets.com/wires/buy-hold-sell-2-hall-of-fame-investors-analyse-each-other-s-best-ideas 

Buy Hold Sell: Copper's time has finally come (and 2 big buys)

For years, experts have predicted a coming surge for copper. BHP, for instance, believes that copper demand will grow by around 70% to over 50 million tonnes (Mt) a year by 2050. For context, the total copper demand in 2023 was 31 million tonnes. 

But copper prices haven't really gone anywhere over the last three years - sitting at around the mid-US$4 level since November 2021. 

According to today's guests, slowing global economies has had a dampening effect on demand and kept copper prices suppressed at these levels. But looking out over the next five to 10 years, that demand will increase - meaning, it will be very hard for supply to keep up. The Fed's recent 50 bp rate cut is a catalyst - and supply shortages mean this theme won't last for 18 months or two years but for many years to come. 

So, in this episode, Money of Mine's Matt Michael was joined by Perennial's Sam Berridge and Argonaut's David Franklyn for their answers to the big copper conundrum. 

They analyse three copper stocks listed locally in Australia - including Sandfire Resources (ASX: SFR), Metals Acquisition (ASX: MAC) and Evolution Mining (ASX: EVN). 

Plus, they both name two big BUYS in the copper space that they are bullish on today. 

Note: This episode was recorded on Thursday 19 September 2024. You can read an edited transcript below.

https://www.livewiremarkets.com/wires/buy-hold-sell-copper-s-time-has-finally-come-and-2-big-buys