Michael Wayne on volatility, uncertainty, and the stock he’s backing

Markets didn’t fall apart this week, but they didn’t make life easy either. Volatility returned, leadership stayed tight, and parts of the market continued to slide quietly out of favour. It was a week that rewarded attention, not bravado.

That’s the context for this Q&A. It touches on conviction buys, selective risk, portfolio discipline, and the challenge of staying constructive on quality when prices keep doing the opposite.

Guiding the discussion is Michael Wayne, Managing Director of Medallion Financial Group, with experience spanning Australian and global equities, ETFs, managed funds and corporate deal flow. He’s also a regular voice across Australia’s financial media, sharing market insights with a focus on discipline and risk management.

What follows is a no-frills look at how he’s positioning right now, with an emphasis on process over prediction.

What’s your most recent investment and why?

The most recent buy in the fund was topping up on an existing position in Mayfield Group Holdings Ltd (ASX: MYG).

MYG offers investors exposure to long-term structural themes, including renewable energy generation, the rapid expansion of data centres, and increasing investment in Defence and East Coast infrastructure.

We believe MYG is undervalued, particularly when considering the potential earnings accretion that could be delivered from near-term acquisitions.

Which investment did you add to your watchlist this week?

Hillgrove Resources (ASX: HGO) - A bit of a spicier one for us, however, Hillgrove is seeking to evolve from a short-life restart operation (2.8 years) into a scalable underground copper producer.

While the current reserve life appears short, it excludes the impact of extensive near-mine drilling. With the processing plant underutilised, if the company successfully brings Nugent into production — a recently funded development now advancing toward production — it has the potential to deliver both a meaningful extension of mine life and immediate margin expansion.

What is the most recent investment you have trimmed or sold and what drove this decision?

We sold out of our position in Qoria (ASX: QOR). The quarterly update disappointed us after the company again delivered negative free cash flow numbers.

What’s your favourite chart or data point from this week?

US large-cap equities continued to dominate in 2025, with the S&P 500 outperforming the Russell 2000 by roughly 5%, marking a fifth consecutive year of large-cap leadership.

This matches the 1994–1998 period as the longest streak of large-cap outperformance on record.

Notably, that earlier episode was followed by six straight years of small-cap outperformance (1999–2004).

What was your weekly low – a market disappointment or challenge?

Being a growth-focused manager, we have a tendency towards quality structural growth stocks. This part of the market has been experiencing its own mini-bear market over the past three months, leaving many high-quality names down 30-40%.

The challenge for us is to determine whether now represents an opportunity to initiate positions in, or increase exposure to, some of these names.

What first drew you to markets and what continues to keep you inspired today?

Not sure if it’s still around, but I took part in the ASX share-market game in Year 10 at school.

What’s one piece of advice you’d give to new investors?

Don’t have hubris and believe your own BS! Often, the success of an investment arises from factors you didn’t even consider.

How do you unwind when you’re not thinking about the market?

Having a beautiful 2-year-old daughter helps with that… Otherwise, snow skiing. It strikes the right balance for me. Being outdoors, being active, and ultimately earning the après that follows.

Rapid fire!

Favourite investing book?

Rather than a book per se, a memo by Howard Marks titled "The Illusion of Knowledge" comes to mind.

Favourite investing or finance/markets-related podcast?

I'm not much of a podcast guy.

The first thing you read each morning?

A nice leisurely scroll through The Daily Shot.

Favourite restaurant?

Porcine in Paddington. BYO restaurant serving interesting French food that goes beyond the well-worn classics. Perfect for a meal before wandering down the road to a footy game or concert at the SFS.

Something people are surprised to learn about you?

I suppose that is for others to say... put it this way, I don’t have any hidden talents or athletic accomplishments to declare.