What is Livewire readers’ ‘Secret Weapon’?
Most investors have a "secret weapon." That one pet stock that’s helped take their portfolio returns from average to great. Warren Buffett has his famous investment in See’s Candies, Soros and Druckenmiller have their short on the British Pound, and Australia’s John Hempton has his bet on Herbalife, taking the opposite side of the trade to Bill Ackman.
But what are the secret weapons in Livewire readers’ portfolios? In our recent survey, we asked you exactly that. And with more than 1,700 responses, you supplied a treasure trove of information. In this article, I try to distil some of the stocks, funds, and themes that appeared repeatedly (and some that were surprisingly absent).
Banks and resources still Aussie favourites
It should come as a surprise to nobody to see Afterpay among the top mentions on the list. What was surprising (to me at least) was the strength in support for commodities producers. Commodities have clearly seen a resurgence lately, but to see iron ore producers take out spots number one, two, and five in the last is truly a sign of the times. Niche commodities and smaller companies score well, with Chalice Mining, a developer yet to hit production, outscoring Commonwealth Bank (ASX: CBA) and local biotech giant CSL Limited (ASX: CSL). Rare earth producer Lynas Corporation (ASX: LYC) and Paladin (ASX: PDN), which owns a large uranium project in Namibia, both scored well too – probably as a direct result of being among the best performers on the ASX in the last 12 months.
Notably absent were Australian energy producers. Santos (ASX: STO) scored just three mentions, while Woodside was completely absent. Australia’s largest gold producer, Newcrest Mining, also failed to make the list, despite the popularity of gold juniors.
Global shares fail to catch the love of readers
While we’re on the topic of stocks, international shares failed to score much of a mention. Despite the Australians increasing their exposure to global stocks in recent years, individual names still failed to catch readers’ attention. Perhaps because Australian investors are getting their global exposure through fund managers and ETFs?
More banks, more resources
When we look at the mentioned for various sectors and themes, we largely see a repeat of the Aussie shares above, but with one key difference. With "Banks" having a single clear keyword, it was bound to rise to the top. But once you start adding up the mentions of terms such as Resources, Gold and Uranium, it’s clear that resources are the flavour of the moment. If you’d told me 12 months ago that Uranium would score more mentions than Iron ore or Bitcoin, I’d have said you were crazy!
Property received a decent showing, but many of the mentions were in regards to industrial property, property trusts, and listed property, with residential property barely rating a mention.
Bitcoin and Biotech were included due to the surprisingly low number of mentions – though if you add Crypto and Bitcoin together it makes a bit more sense.
"ESG" was another term that scored surprisingly low, given the amount of press the topic has received in the last 12 months.
ETFs, LICs, or managed funds? Livewire readers like all three!
Even on a website where active investment is the primary topic of discussion, ETFs still lead the pack, proving just how popular the vehicles are these days. The ETF Securities Australia Battery Tech & Lithium ETF (ASX: ACDC), which invests in companies exposed to battery technology and supply chains, was the most mentioned among them. Wilson Asset Management managed three times as many mentions as the next most popular mention.
One interesting tidbit that stood out to me was Bennelong’s ex-20 Australian Equities Fund, which despite scoring just three mentions, received all of those mentions from Financial Advisors and High Net Worth investors.
A sign of the times
It’s not hard to see the recency bias at play here, with many recent high performers getting plenty of mentions in the list. In my mind, the bigger surprises came from what didn’t get mentioned much, as opposed to what did. Though the resurgence of small resources is no doubt stronger than many would’ve predicted.
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Disclosure: The author owns shares in some of the companies mentioned.
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Patrick was one of Livewire’s first employees, joining in 2015 after nearly a decade working in insurance, superannuation, and retail banking. He is passionate about investing, with a particular interest in Australian small-caps.
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