Top stocks and key lessons from The Rules of Investing 2024 season

Last year, more than 330,000 of you downloaded Livewire's flagship podcast, The Rules of Investing. A show that, in its own words, "gets inside the minds of leading investors, economists, and industry experts." And last year, we had the pleasure of hosting 26 of these leading investors for a long-form conversation about the ways they think about markets, how they're investing, and their best ideas. 

With the new season of The Rules of Investing set to kick off in a few weeks, we thought it would be a good idea to look back on some of the best insights that were revealed during the podcast's 2024 season. 

We'll start with a selection of the stocks that our guests brought along - the names that the professionals would buy if the market shut for five years. 

Note: Not every episode discusses the guest's stock they would buy and hold for five years. Similarly, not every episode that asked this question in 2024 is featured here. Always do your own research and seek credible financial advice before making any investment decision.

David Wilson's large cap pick: The great Australian dream

First Sentier's Deputy Head of Australian Equities (Growth) picked a stock that could be construed by some as being the highest-quality stock on the ASX and being "safe as houses" - literally. The stock? REA Group (ASX: REA)

"I think that their business is probably the best business listed on the ASX. Leave aside valuation, it's a very robust business, they have a lot of pricing power and it has dominant market share. They are in a very good place," Wilson said. 

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Arden Jennings and Chris Stott pick the same stock

We've written plenty in the past about the value of founder-led businesses. When one or two people set the benchmark for the company's vision, its culture, and its decision making, it can make a massive difference. Jennings' pick reflects these principles - David Teoh's Tuas Group (ASX: TUA).

"He's the founder of TPG Telecom but they're replicating the strategy in Singapore. They started from scratch in the mobile space but have quickly grown to 10% market share through a price leadership approach. It's exactly the same playbook as what they did in Australia," Jennings noted.

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Amazingly, Jennings was not the only person to call out Tuas as the stock he'd hold for the next five years. 1851 Capital's Chris Stott also nominated Tuas. Like Jennings, he called out David Teoh's successes in TPG Telecom. 

"You talk about Light & Wonder being Aristocrat Mark II, to us, this is TPG Mark II," Stott said. "They're essentially using that same playbook to execute in the Singaporean market. For us, it carries a lot of characteristics that we look out for in a new investment." 

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Armina Rosenberg's two picks for the next 5 years: An Italian "safe play" and a riskier Japanese stock call

For Minotaur Capital's Armina Rosenberg, she picked two international names - one she called a safe play which harnesses the "highways of energy" and the other being a Japanese pharmaceutical play which will be highly dependent on how the GLP-1 thematic plays out.

"I think Prysmian (BIT: PRY) is a good buy over the next five years. I just think that the need for the highways of energy are really, really important. They've had a proven business and management team with a 5% free cash flow yield for decades now," she said.

"If I wasn't so safe, I'd say Chugai Pharmaceuticals (TYO: 4519). That's actually a reasonably safe play still because they have an existing drug portfolio that is generating earnings and doing really well. But I think it will trade depending on how well those GLP-1s due."

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Janus Henderson's Josh Cummings' pick for the next 5 years reflects his team's unusual litmus test

For a question that is so inherently linked to the public stock markets, it's quite surprising to learn how Cummings arrived at his 5-year stock pick. 

"We like to ask the question - If there were no stock market and you were offered 100% of this company, would you own it or not? That should be the litmus test for buying the stock in the public markets," he argued.

With that thinking in mind, he offered Formula One Group (now called Liberty Media Group) (NASDAQ: FWONK). Yes, that Formula One.

"Your offering is 24 live events that are each larger than the Super Bowl. That's pretty special. We never want to say a business model is forever. But to me, Formula One is about as close to a forever business as we're able to find. Scarcity gets priced and we like owning scarce assets," Cummings said.

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The stock Dr Don Hamson would hold for five years - outside the Big Banks and Miners

We threw Australia's Dividend Doctor a curveball and asked him to nominate a stock outside the Big Seven of the ASX to hold for the next five years. His answer was equally surprising - Origin Energy (ASX: ORG).

"The reality is all we need power but we also all need gas. They've had their tough times but I think it's going to do pretty well over the next five years," Dr Hamson said. 

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Other insights: Comments on AI 

There's no question that artificial intelligence (AI) has set markets alight. So much so that it was the core subject of three episodes last year and was in the conversation of many other episodes as well. And while its sceptics may say it's all froth and little substance, BlackRock's Tamara Haban-Beer Stats argues that its potential is undeniable.

"Whether you work in finance or not, there is so much happening in that artificial intelligence space and digitalisation in general. I think it's changing the way we work, the way we communicate, and the investment opportunities. I think it's incredibly exciting and it's certainly the thing that we like at BlackRock," Haban-Beer Stats said. 

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FNArena's Rudi Filapek-Vandyck went one better, arguing AI is the thing that markets are getting wrong. But not because they're overestimating its potential to change investing but because they are underestimating its potential to do just that.

"In general terms, this [AI] should be on investors' radars because the growth that is coming toward those companies is absolutely mind blowing," Filapek-Vandyck argues. 

This flowed through to two of his stock picks that he would hold if the market closed for five years - the so-called picks and shovels plays of the AI trade on the ASX: Goodman Group (ASX: GMG) and NextDC (ASX: NXT).

"I'd be very happy to own both of these stocks because I am convinced that with the growth coming towards those companies, the share price will be a lot higher in five years' time. And in the meantime, I don't have to worry about what happens to the share price with all its fluctuations and volatility," he said. 

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You can also catch other insights on AI in the episodes featuring TMS Private Wealth's Ben Clark and T. Rowe Price's Dominic Rizzo:

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And... the one thing investors get wrong

While we ask this question to almost all of our guests, my personal favourite is the response of Langdon Equity Partners' Greg Dean. In a world where information could be gleaned from literally everything, everywhere and all at once, Dean says it's a prudent idea to stop reading newspapers. It may help you win the day but it may not help you win the war.

"My best example is the Magnificent Seven conversation. It's been fantastic for the average person to have seen the wealth creation from US large-cap tech over the last 10 years. We should applaud that and everyone should be thankful. But they should also immediately be sceptical that that can be what carries the day over the next 3, 5, or 10 years."

"They should be asking what under-loved, under-appreciated company exists today that in 10-15 years, people will love. Go find a collection of those and that will be something that makes you continuously happy in your investment journey," Dean said.

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