Buy Hold Sell, by Livewire Markets

10 "sleep at night" stocks to help your portfolio weather any storm in 2025

Legendary investor Warren Buffett once quipped:

“Diversification is protection against ignorance. It makes little sense if you know what you are doing.”

By the Oracle of Omaha’s standards, most of us are a bit ignorant, and gladly so, relishing the “free lunch” that diversification provides.

But what if you didn’t have that option? What if you were limited to holding just one stock for an entire year? That’s the challenge we put to 10 leading fund managers as part of our 2025 Outlook Series.

Livewire has handpicked a selection of investment experts for their outlook for the year ahead.

 

Their answers reveal some fascinating insights into the companies and themes they believe tick the “sleep at night” box - stocks that stand out for their resilience, ability to handle uncertainty, or simply having a lot going for them.

These include businesses riding key megatrends, supplying critical medicines, or executing strategies that position them to dominate key market segments.

To find out what the stocks are, watch the video, listen to the podcast, or read our edited transcript at this website. 

 

Caution! 11 stocks on the ‘avoid’ list for 2025

Everyone is hunting for the next big winner in the stock market, but sometimes it pays to go back to basics. Where is a better place to start than by drawing on the wisdom of the Oracle of Omaha, Warren Buffett?

Buffett is famously quoted as saying his first rule of investing is "never lose money". After all, compounding your capital is much easier when starting from a higher base. It is equally simple for those interested in his second rule - "never forget rule number one".

There are always plenty of investors willing to give their views on which investments look good, but hearing about stocks to sell or at least avoid is less common.

Looking through the nominations in the wire below, a few things stand out. Many of the stocks named have had incredible runs in 2024 and have benefitted from hot themes, changes in regulation and the prospect of big wins with binary outcomes. Some of the success will no doubt have been the result of good management. It almost always is when share prices are heading north!

It's also evident that many of these stocks have loyal supporters who believe in the vision of an enigmatic founder. Whilst Tesla isn't on this list, it is probably one of the most outstanding examples of a widowmaker trade for short sellers, and Elon Musk has consistently defied the doubters.

The final point is that while our guests do note the quality of a number of the businesses, valuation often becomes the barrier. Buffett, the world's greatest investor, attained this status by being ruthlessly disciplined about the price he was willing to pay for a stock and equally disciplined when it came to selling. Buffett has been aggressively offloading his Apple shares despite its ubiquitous presence in our daily lives.

Having already named their growth picks, we've asked our guests to nominate the stocks they're avoiding in 2025.

Don't count 'em out: 12 contrarian calls that may just surge in 2025

Sometimes, the best investment ideas are the ones that either no one thinks of or the herd has left for dead. Two years ago, Australian property trusts finished the year down 20% as the fastest interest rate hiking cycle in 40 years left a scarring impact on valuations. But if you were, to paraphrase Warren Buffett, being greedy and buying up REITs in 2023 when others were fearful, you would have finished up with the second best-performing asset class in the following year. 

Or, consider Chinese equities, cellar-dwellers in 2021, 2022, and 2023. But as of the end of Q3 2024, they actually top the BlackRock asset class quilt. In other words, being courageous (given the right research, attractive fundamentals, and some luck) can sometimes net you the biggest returns.

 

And of course, who could forget some of the bravest calls in all of investment folklore. Once upon a time, short US housing was a massive bet. But Michael Burry and Steve Eisman are now famous for it. Or buying British Pounds and converting them to German Deutsche Marks was a very brave way to short the British economy. But thanks to his research and his guts, George Soros made a $2 billion profit and earned the moniker "the man who broke the Bank of England."

With this spirit in mind, we've asked 10 young-gun stock pickers to tell us about a contrarian investment they are backing in 2025. The stocks they mention span the full length of the consumer - from long-forgotten retailers to luxury brands known the world over. 

Other honourable mentions include growth stocks which may have been forgotten about in this AI-induced rally and four names linked to the commodities trade, which must say something about where fundies are finding the most value right now.

To find out what the stocks are, watch the video, listen to the podcast, or read our edited transcript at this website.

10 industries and 17 stocks poised to break out in 2025

Move over big tech, there are more opportunities in town. 

After starting 2024 with earnings downgrades for a range of sectors and a slowdown in consumer spending, it was a bumper year for a number of sectors. Consumer discretionary was one surprise winner, with well-positioned brands like JB Hi-Fi and Nick Scali taking charge. Australian banks facing into a tougher environment continued to outperform, as did the financial sector on the whole, with insurers taking advantage of higher premiums. Biotech also started to surge, as falling rates outside of Australia and a number of successful clinical trials bolstered the sector.

Of course, the big tech companies continued to dominate and push markets to record highs - it's hard to ignore the extraordinary growth in the likes of Nvidia for example, but it's worth noting the pace of the growth seems to be moderating somewhat. With valuations at a premium in the tech sector, there are a range of other areas where fund managers are hunting for big growth. Now could be a great time to be looking at these industries and economies.

2025 has started on a promising footing. Inflation seems to be moderating, global rates are finally falling, and there are signs of strength and improvement in a range of economies. The scene has been set for a big year in markets. Is it any wonder the experts seem decidedly bullish?

2025 could be the year for healthcare companies to continue to really fly, the energy transition to push certain commodities to new heights and the return of manufacturing.

As part of Livewire’s annual Outlook Series, we recently asked 10 of Australia’s top fund managers to answer which industries, sectors or areas of the market they see the biggest growth potential in for 2025. We also asked them to name at least one stock they are using for exposure. 

Our featured fund managers include (in order of appearance):

• Sam Ruiz, T.Rowe Price
• Jessica Farr-Jones, Regal Funds Management
• Nick Guidera, Eley Griffiths Group
• Elise Kennedy, Schroders
• Lucas Goode, IML
• Zoe Middleton, Platinum Asset Management
• Todd Warren, Tribeca Investment Partners 
• Rachel Folder, Pendal Group
• Brittany Isakka, Spheria Asset Management
• James Barker, Ellerston Capital

Note: The information provided is not intended to be a recommendation and is offered in the spirit of the Outlook Series. None of the fund managers invest in a single industry or theme; they incorporate these within a broader diversified portfolio where they adjust exposures over time based on their analysis of activity and stocks. Please do your own research and seek advice from a professional before making any investment decisions. Past performance is not a reliable indicator of future returns.

You can watch the video by clicking the player, listen to the podcast, or read an edited transcript at the following website. These interviews were filmed on Tuesday, 10 December 2024.

The #1 growth stocks set to explode in 2025

The name Thomas Rowe Price Junior should have been consigned to the investing scrap heap.

Born in 1898, Price’s career was just hitting its stride as the Great Depression hit and hit hard. At the time, he was the head of investment for the broking firm MacKubin, Legg and Co., but instead of developing great hate for markets, he fell even more in love with them.

That inspired him to start T. Rowe Price and Associates in 1937, with a then-revolutionary focus on growth investing.

His guiding philosophy was that by investing in well-managed companies operating in deep pools of opportunity, he could generate returns ahead of inflation and the overall economy.

It’s a philosophy that would earn Price the moniker the “Father of growth investing”. T. Rowe Price still operates to this day and manages around US$1.6 trillion globally.

So, how would Price’s philosophy stack up today? Probably pretty well. From 1990-2020, growth stocks delivered an average annual return of about 12%, compared to around 9% for value stocks.

Over the journey, growth investing has shown resilience during economic downturns, as companies with strong fundamentals and innovative products tend to recover faster and maintain their competitive edge.

With all this in mind, we asked ten of Australia’s brightest investment minds, covering both ASX and global stocks, for their top growth pick in 2025.

Buy Hold Sell: 3 nice stocks and 2 on the naughty list for 2025

Anyone with children or grandchildren will no doubt have said at some point, "You'd better be good so that you end up on Santa's 'nice' list." Of course, the inference is that nice children get more presents. 

So, in the spirit of Christmas, this latest episode of Buy Hold Sell saw Henry Jennings from Marcus Today and Hugh Dive from Atlas Funds Management run the ruler over a handful of stocks and decide whether they've been naughty or nice. 

For good measure, they each also nominate a stock they see as being on the naughty list in 2025. It could be a name that has done well this year but won’t be able to maintain its good behaviour, or it could be a naughty stock that hasn’t learned its lesson.

Note: This episode was recorded on Wednesday 4 December 2024.

2024 has been a cracking year for ASX investors. What's in store for 2025?

Every year, there are a couple of critical investment decisions that investors need to get right in order to set themselves up for a good year.

These big decisions often trump stock picking or catching the latest fad at the right time. Rather, they are fundamental to giving yourself a fighting chance of outperforming.

This year, if you did nothing else, buying the banks and selling the miners proved fruitful. A close second would have been staying long and strong in tech names, despite some of the nosebleed valuations we’ve all witnessed.

So, what are the key themes investors need to have on their radar as we head into 2025? To answer that question, Livewire’s Hans Lee sat down with Henry Jennings from Marcus Today and Hugh Dive from Atlas Funds Management.

In this episode, they reflect on what worked and what didn’t in 2024. They also highlight the key themes investors should have on their radars in 2025.

For good measure, they each pick one stock that they would bet the house on – if they had to. - and one stock to avoid. 

Note: This episode was recorded on Wednesday 4 December 2024.

Buy Hold Sell: 5 dogs of 2024 tipped to rebound in 2025

The end of the year naturally brings a time of reflection. We collectively get a moment to breathe and reflect on our family, friends, and work.

For those who play Mr. Market's game, we also invariably run a critical eye over our portfolios and make some decisions on what to keep and what to turf like four-day-old Christmas leftovers.

Shedding the duds also means hunting for new opportunities and while piling into the top 10 best performers from this year is always tempting, there are probably some equal, if not better opportunities to be had in the downtrodden. 

With that in mind, this latest episode of Buy Hold Sell sees Henry Jennings from Marcus Today and Hugh Dive from Atlas Funds Management rummaging in the bargain bin like someone who camps out for the Boxing Day sales. Will they find any unloved gems?

As a bonus, Henry and Hugh each nominate a stock they think is set to get going in 2025. 

Note: This episode was recorded on Wednesday 4 December 2024

Buy Hold Sell: 3 ASX stocks the market loves (and 2 that are flashing red)

Every now and then, a company captures the attention of the entire market. Like lightning in a bottle, these companies are typically doing something innovative, disruptive and, more often than not, something that was previously considered impossible.

The narrative around the company fuels the share price, and vice versa, and provided earnings keep up, a market darling is born.

A previous example was Afterpay, which rocketed to notoriety, riding a wave of Buy-Now-Pay-Later fever. A current example is Life360 (ASX: 360) which has achieved market darling status and has been named by some as the most compelling growth stock on the ASX right now.

So what are the stocks that the market is loving today? And are there any that have run too hard, with their share prices and outlooks departing from reality?

To answer those questions, Livewire’s Ally Selby was joined by Andrew Peros from Ausbil and David Keelan from Ellerston. In this episode, they run the ruler over three market darlings, and each name a stock they think is flashing red. 

Note: This episode was recorded on Wednesday 20 November 2024. 

Could these 2 stocks become the ASX's next 10-baggers?

Ahh, the mystical 10-bagger. A stock that has delivered its investors a 10x return on their initial investment. Initially coined by legendary investor Peter Lynch, who was a fan of discovering undervalued stocks with sustainable and attractive earnings per share growth, a love of 10-baggers saw Lynch's Magellan Fund achieve a 29.2% average return over the 13 years he managed it. 

In his book, One Up on Wall Street, Lynch wrote, “In my business a four-bagger is nice, but a ten-bagger is the fiscal equivalent of two home runs and a double.”

While this anonymous writer may not know anything about sports, I do know a few talented local fund managers who can help investors identify the ASX's next great 10-baggers. 

So, in this episode, Livewire's Ally Selby was joined by Ausbil's Andrew Peros and Ellerston's David Keelan. They share their secrets to identifying long-term compounders, the importance of backing strong founders, the red flags investors should look out for, and whether profitless companies are a problem or worth the risk. 

Plus, they each name a company that they believe could become the ASX's next 10-bagger. 

Note: This episode of Buy Hold Sell was recorded on Wednesday 20 November 2024. You can read an edited transcript below. 

https://www.livewiremarkets.com/wires/could-these-2-stocks-become-the-asx-s-next-10-baggers/