Buy Australian for the next recovery phase

The Rules of Investing

Livewire Markets

After a tumultuous 2020, the world is (slowly) beginning to recover. With two successful vaccines announced, and the virus largely quashed in Asia and the Pacific, the time for "lockdown stocks" is behind us, and the "recovery play" has begun. But the pace of recovery varies in different markets. While early progress from Europe’s lockdowns appears positive, the region has a long way to go. And the US has barely begun. But Australia is perfectly placed, with the virus under control both locally and for our biggest trading partner, China.

Jun Bei Liu, lead portfolio manager of the Tribeca Alpha Plus Fund, reckons that Australian equities “are in a pretty sweet spot, compared to global.” With consumer and business confidence rising, the de-leveraging of household and corporate balance sheets, and historically low rates, all the ingredients are there for a strong performance from Australian equities.

In this episode of The Rules of Investing podcast, we discuss the re-opening trade and how to get exposure to it, how the ‘barbell’ approach helps to maximise returns while managing risk, and Jun Bei shares a high quality company she's recently added to the portfolio at a very attractive price.

Time stamps

  • 3:30 – How Jun Bei’s investing interest came about
  • 7:55 – Valuing high growth stocks
  • 11:46 – The relationship between momentum and performance
  • 14:38 – The most important trends for investors
  • 19:32 – Australian or overseas stocks for a recovery?
  • 21:55 – Can the recovery be faster than anticipated?
  • 23:48 – Adopting a barbell strategy for the portfolio
  • 27:58 - A quality company recently added to the portfolio
  • 32:03 – Jun Bei answers our 3 favourite questions

Reading recommendation

  • Dan Ariely - Predictably Irrational: The Hidden Forces That Shape Our Decisions. Available on Amazon, Booktopia, or your local bookshop.

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The Rules of Investing is one of Australia's top investing podcasts. We interview the leading investment minds from Australia and overseas to better understand their processes and philosophy. After launching in October 2017, there have been over...

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