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.
Note: This episode was recorded on Wednesday, May 24, 2023
Timestamps0:00 - 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)
How to buy growth companies before they get expensive
Aboud: What I'd buy in a market crash
Finding income in a low-rate world
The theme to dominate this decade in markets
How an everyday investor competes with the pros
Two consumer stocks making it big overseas
50th episode special with Hamish Douglass
Nailing your asset allocation
How to pick stocks like a pro
Investing: A how to guide (Part 1)
Tagliaferro: How the '87 crash shaped my philosophy
Catherine Allfrey: Look over the horizon
The developed world is on the brink of crisis
The importance of saying "no"
Value, growth. Why don't we have both?
How to pick growth stocks that will keep on winning
Montgomery: The economics of enough
The five pillars of a quality stock
The hunt for predictable cash flows
Abnormal returns
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