Buy Hold Sell: After a "crazy" 2025, what's in store for 2026?

“Crazy.” That is how Jun Bei Liu of Ten Cap summed up 2025, a year defined by sharp rotations as leadership swung from small caps to value, resources and AI-driven thematics.

Atlas’ Hugh Dive offered his own descriptor, “overreaction,” reflecting how markets lurched on headlines like Trump’s tariff scare before snapping back just as fast. It was a year that rewarded flexibility, punished hesitation and exposed how impatient investors have become, with blue chips sold off at the first hint of earnings weakness.

So, what now? As 2026 approaches, our guests sit down with Livewire's Vishal Teckchandani to unpack the key lessons, the surprises and a couple of stocks they believe are well positioned for the year ahead.

Note: This episode was recorded on Wednesday 3 December 2025.

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Edited Transcript

Vishal Teckchandani: Hello and welcome to Livewire’s Buy, Hold, Sell. My name is Vishal Teckchandani, and today we are recapping the year that was 2025. What did the fundies think were the big themes, the duds, and the stocks that got away? And, importantly, how are we set up for 2026 and what are some stocks in good shape for next year? To discuss this with me, I'm joined by Hugh Dive from Atlas Funds Management and Jun Bei Liu from Ten Cap. Welcome to both of you.

All right. Jun Bei, I'll kick off with you. In one word, how would you describe 2025?

The year in one word

Jun Bei Liu: Look, I just think 2025 was crazy, but it was amazing rotation. I guess that's the key word, the rotation we're talking about. 2025 was the year where you saw a lot of names, the performance going to the small caps. That's done well. And then you've seen the value names that's done well. You've seen the resources name that's done well. That's after many years of waiting for it to take place. And then you've seen some of the interesting space which is more thematic, the AI and others in newer sectors that's taking hold.

Vishal Teckchandani: Okay. Crazy rotations, great point. Banks, commodities, gold, you name it, everything except healthcare seemingly. Hugh, how would you describe the year in one word?

Hugh Dive: Overreaction. I mean, a great example of that was in June where Trump announced he was going to increase steel tariffs from Australian Steel. As a former steel analyst, I was a bit scratching my head. I can't imagine we sold any steel to the U.S. It turned out we sold $250 million bucks worth of steel. So the equivalent amount that Nicole Kidman generates a year from her movies and TV shows and Keith Urban together with a lot less things. So there was a lot and the market fell on that, and without thinking that there was not much there. It was a bit of cold rolled steel sent from BlueScope from Kembla to the Pacific Coast. But this dominated conversations, dominated the markets. The politicians and the press were ringing their hands, but, ultimately, it was nothing.

What surprised you about 2025?

Vishal Teckchandani: Okay. And what surprised you about markets this year?

Hugh Dive: The ability to look through things. So we had an enormous panic through the Trump tariffs. That was supposed to dominate discussions. It really started to come out early April. The market was down 7.5%, but finished up the month of April about 4.5%. A lot of the big Australian companies weren't that really impacted, but it was supposed to be looking through a lot of those issues. It moved very fast. Went from doom and gloom to big recoveries. Ultimately, a lot of the banks and the miners weren't impacted and they're able to look through that. And that provided probably similar to Jun Bei's comment about crazy. It gave you some opportunities.

Vishal Teckchandani: It's quite the V-shaped year indeed in stocks. Jun Bei Liu, what surprised you the most?

Jun Bei Liu: I was surprised most actually opposite to what Hugh's saying the ability to look through things. I think on the stock level, a company's level, it's actually inability to look through things, particularly in our large, some of the blue chip Australian companies. You take, for example, the CSLs, the James Hardies, just you name it, there's plenty of names. Stock market at this stage, well, at least in 2025, could not look past beyond the next earning season. I think the market has become very shortsighted and very impatient.

Look, I have a very short attention span and the market does too, which is great. It works perfect for the share market, but they're all focusing on the next earnings. So if the earning doesn't look good, it's gone. So it really surprised me how short-term the market is with the companies and how impatient they are with the companies. Because we know the company sets their strategy for three to five years, but share market these days focus on three months.

The one that got away?

Vishal Teckchandani: Okay. Now, Jun Bei, they say you shouldn't be emotional about investing, but for this question, we're going to be a bit romantic. What's the one company that got away from you this year?

Jun Bei Liu: Oh, look, there's plenty of company that got away from me. Well, there's a company. Actually, we do have some, but I wish I didn't keep trimming it and keep taking profits because we do limit to our risk to a certain perspective. It's this one little gold company called Catalyst (ASX: CYL). It's not even in the index. It wasn't on anybody's radar. The first time we brought it up early this year, we spoke to our client. They said, "Never heard of it. We know every gold company. We never heard of this one. It's not in the index yet." But the company raised the equity early in the year to expand their production. And I thought the company actually has shown a really good track record. And then we took position.

And then so far this year, they've gone up by a 150%. Incredible. But we just keep trimming it back. I wish I held all the positions. But that's one company I think will continue to track higher.

Vishal Teckchandani: That's the way it goes sometimes investing. Hugh, what about you, mate?

Hugh Dive: Similar to Jun Bei, but off the bigger end. So we did a lot of work on Northern Star (ASX: NST). There were a couple of production issues late last year and that just scared us off. Wish I'd bitten the bullet. Thought there could be some more production issues. Often with gold miners, probably not Catalyst, but with some of the miners that they have production issues. And I thought we've got to be cute with that and it just kept on running away from us. They didn't have any production issues in 2025. And that was a key mistake we made. We just didn't look through those issues late last year. And probably if we'd owned this, the performance would be a bit better.

What do investors need to get right in 2026?

Vishal Teckchandani: Well, hopefully, both of you learn how to be better gold diggers next year. Mate, what is the one thing investors need to get right in 2026?

Hugh Dive: The key thing with investors getting it right is the banks versus miners rotation. Every year, as a large cap Aussie fund manager, that's the key thing, getting that right or wrong. And if you've got that absolutely wrong and see some other rival fund managers go to new to the banks or new to resources, and if you get that pick wrong, you make for a pretty tough year. Currently, the banks will keep shooting the lights out earlier on this year up until CBA's demise with a bubble. At one stage, CBA was up 25%, 28%. Then, famously, an American investor came in, was it early June? Fisher Investments bought a whole lot of CBA for $1 billion dollars saying that valuations don't matter. The stock price went to $180 and now it's back to $150. So the stock price does matter. So getting that right.

Vishal Teckchandani: Jun Bei, same question to you. What do investors need to get right in 2026?

Jun Bei Liu: For us, we just want to buy companies that will go up. And then because we're a long/short manager, so we can short the company, share price goes down. So, for us, it's really about earnings. I think 2026 will be more or less like 2025. Underlying economic activity is okay. Share market looks okay. Maybe there's no rate cut here in Australia, but U.S., there's a few more. So fundamentally supportive. You look at the earnings growth between 8% to 10%. So it looked all pretty good for the share market. So then it really comes down to the earnings. Do you get the earnings right rather than the sector? Look at the performance, the disparity in performance like the Kohl's versus Woolworth this year.

Next year, if you don't get the earnings right, doesn't matter what sector it is. You're going to miss it. Remember, investors have very short attention spans and are very short term. So it's about the next earnings. So we stay very connected to all the companies about how their trading conditions are because economic activity is a little bit patchy, and that's where we'll drive the return.

Vishal Teckchandani: Okay. So building on that, Jun Bei, what is the one hot stock shaping up for a good 2026?

One stock shaping up for 2026

James Hardie Industries (ASX: JHX)

Jun Bei Liu: I'm not sure if it's a hot stock. For 2026, I think some of the dogs of ‘25 will do quite well, just simply because they got sold off with some of the cyclical issues and others. Now, this one, I'm going to name it, it is a dog. It is still a dog, but I do think 2026 will shape out to be an easier year for them, which is James Hardie Industries. Anything that can go wrong has gone wrong. A management team also has issues and not talking to Aussie investors certainly doesn't help. But more recently, they really seem to have turned the corner a little bit. Look, partly because expectations so low, you can't get any worse.

And then the U.S., people are still expecting one more rate cut this month, 50 basis points, another 50 basis points next year. That will surely set the whole sector on fire, the U.S. housing activity. Now, it's been very, very low. Things are pretty tough. We all know things are pretty tough, but based on what it is, the company has already started upgrading even on the low activity. I do think 2026 will be a bit easier for them. It's not expensive for the growth that potentially they can deliver.

Vishal Teckchandani: Okay. As always, a very brave call. Hugh, what about you?

CSL Limited (ASX: CSL)

Hugh Dive: Similarly, going to go over the dog that's very much in the toilet, CSL. Similar to James Hardie, a lot of things have gone wrong. Bit of a range of self-inflicted wounds. Global healthcare stocks were under a fair bit of pressure with the Trump tariffs. And then CSL surprised the market with their announcement that they're going to spin off Seqirus. They're going to cut 15% of the workforce, which is interpreted that they let costs get out of control, and then we see vaccine hesitancy in the U.S. Ultimately, what they sell, they're not lifestyle drugs. It's not Viagra, Rogaine, or Ozempic. The bulk of the drugs they sell are drugs you need to live.

There's ample opportunities to see them recover in 2026. They sell non-discretionary items and they're trading on 16 times, four or five PE points discount to the market. Probably need about 7% growth. I think they're setting themselves up for a much better 2026. But as with James Hardie, the expectations are very low for this company.

Vishal Teckchandani: Okay. Well, there you have it. Some good lessons from 2025 that are shaping some great ideas for 2026. High, Jun Bei, thank you so much for your time. I hope you enjoyed this episode. Please don't forget to like this video and subscribe to our channel. My name is Vishal Teckchandani. Have a good day and good luck in 2026.