Trending On Livewire: Weekend Edition - Saturday 3rd May
Markets swing fast. Two weeks ago: panic. Now: optimism. AI, semis, and EMs shine—but CBA pricier than Microsoft? Buckle up.
It’s never as bad (or as good) as you think. Two weeks ago, capitalism was under threat, world order was breaking down, and Trump – depending on what you read – was the harbinger of doom times.
Late this week I was seeing headlines like “FTSE’s win streak on par with best ever run” and “Stock market’s rapid rebound from tariff-inspired rout stuns Wall Street. But there were signs this would happen”. Everyone’s an expert with hindsight. That’s why you shouldn’t get to low, or high, and why the benefits of experience and perspective are profound.
During the week there were several industry events including the Lonsec Symposium and the J.P. Morgan Markets Media Briefing. We were fortunate to attend the overarching messages were positive;
No signs of a slowdown in AI revolution and Mag 7 can continue to grow profit margins
Global semiconductors are a great bet right now as they're on the cheaper side of their valuation cycle
Excitement about Europe now because of the double whammy of a weak a US dollar and weak equity market returns
Emerging markets are offering lots of opportunities
A week is long time in markets and whilst it’s impossible to say we’re out of the woods yet, it’s looking increasingly likely that the bottom is in and the party is resuming – even if the dancefloor isn’t packed just yet.
Have a great weekend.
Chris Conway, Managing Editor, Livewire Markets
Andrew Mitchell unpacks Ophir's huge returns, says market can rebound from tariff war
Top-performing Australian fund manager Andrew Mitchell loves picking winning stocks so much he didn’t even own a couch, let alone a house, until a few years ago. He preferred to invest his entire wealth into Ophir Funds Management’s equities funds after he co-founded the asset manager in 2011. Since then Ophir’s global and Australian funds have gone on to consistently beat the market’s returns and in this wire Mitchell unpacks his investing philosophy, how he sees markets today, and offers few tips on finding winning stocks. Check it out here.
Coming up: the real world ramifications
The so-called 'Trump Slump' increasingly looks like a typical post-rally pullback, with the ASX200 down less than 2% year-to-date. While Europe and Emerging Markets have gained, US losses - particularly the Nasdaq, down nearly 10% - reflect a broader correction from years of outperformance. Though markets have stabilised post tariff shock, some analysts warn the real economic impact may still be coming, with consensus earnings forecasts trending lower. In this wire, I unpack those ramifications and share why diversification, quality, caution, and being nimble seem the most appropriate terms to abide by.
Is the ASX 200 better or worse under Labor or the Coalition? The answer will surprise you!
If the deluge of political advertisements we’ve been subjected to in the lead up to this election are anything to go by, both major parties believe they have the best credentials for managing the Australian economy – and logically by extension – the stock market.
But does history favour one political party over the other? Does one have a better track record when it comes to managing the economy or for delivering superior stock market performance? Carl Capolingua has done the research and thinks he has the answers – Labor or the Coalition, which is the best bet for Aussie investors? Read on to find out!
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Chart of the Week: Is it a bird? Is it a plane? No, it’s CBA!
On Friday, CBA’s share price flirted with $170 and its two-year forward P/E hit 26.1 - higher than NVIDIA (24.1), Google (17.5), and neck-and-neck with Microsoft. That’s right, our humble local bank is now even more expensive than the Silicon Valley superstars! Is this the definition of insanity? Maybe. Plato’s Dr. David Allen has a theory: Investors are sitting on such huge capital gains they just can’t let go. In this wire, he argues that to find CBA-level quality - without the sky-high price tag - you’ll need to look offshore.
Vishal Teckchandani, Senior Editor, Livewire Markets
Weekly Poll
If you're holding CBA, what's keeping you in?
a) Franked dividends, baby
b) Massive capital gains
c) Blind loyalty
d) I’m not - already sold
LAST WEEKS POLL RESULTS
We asked "In a recent article, we said owning property isn’t easy. But which do you believe is more difficult to manage?"
The poll shows 59% of respondents pointed to investment properties, 22% said neither is easy, 18% nominated share portfolios, and 1% said they don’t own either.
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Equities
This recently triggered market signal has never failed to predict gains
Ophir Asset Management
Equities
I sold my CBA to buy these two financials
Seneca Financial Solutions