Top stocks for today's markets (and why Jun Bei Liu believes the ASX will head higher in 2023)

Earlier this month, the Reserve Bank of Australia was forced to cough up internal documents under Freedom of Information laws. This included an internal modelling exercise from September 2022, which revealed the risk of an Australian recession could be as high as 80% by September 2024.

Meanwhile, a recent Bloomberg survey of 14 economists saw the probability of a recession in Australia climb from 35% to 38% in April. 

Investors themselves, through their positioning, seem to be suggesting the same. Shares in classic defensive names such as Transurban (up 14%), Woolworths (up 15%), Wesfarmers (up 9%), Coles (up 15%), Telstra (up 10%), Origin Energy (up 9%) and AGL (up 11%) have continued to tick higher since the beginning of the year. 

And yet, Tribeca Investment Partners' Jun Bei Liu is unflinchingly bullish. She doesn't believe the Australian economy will nosedive into a hard landing in the next few months or years. Instead, she argues the noise in markets has created extraordinary investment opportunities today. 

"People keep waiting for the market to crash. I know a lot of investors are waiting for the market to fall. In the current market, if you look at the [stocks that have] performed over the last six months, it's all defensives," she says. 

"Why, because there's really a lack of alternatives and people are worried about what might happen or what might come. I think they're getting it very wrong." 

• Three rules for investors to live by. 
• Her macro outlook for the years ahead. 
• Why there is still fuel left in the tank when it comes to the China reopening. 
• Her top long and short positions right now. 

Note: This episode was recorded on Wednesday, May 24, 2023

Timestamps 

• 0:00 - Intro 
• 1:25 - Three rules investors should live by
• 4:58 - Jun Bei's North Star for volatile markets 
• 7:35 - Jun Bei's base case: Why she doesn't believe Australia will experience a recession 
• 12:38 - The China re-opening theme isn't over yet (and the stocks' Jun Bei is backing)
• 19:53 - Jun Bei's earnings outlook for the ASX 
• 21:55 - Companies facing margin pressure over the months ahead 
• 23:11 - Why Jun Bei is shorting Super Retail Group (ASX: SUL)
• 26:19 - And why she's backing A2 Milk (ASX: A2M), NEXTDC (ASX: NXT), Macquarie Group (ASX: MQG), REA Group (ASX: REA), Xero (ASX: XRO), TechnologyOne (ASX: TNE), Pilbara Minerals (ASX: PLS) and Treasury Wine Estates (ASX: TWE)
• 28:55 - The unloved stocks Jun Bei is loving right now
• 32:15 - The importance of emotional intelligence when it comes to investing 
• 36:00 - The best CEO and management teams in Australia 
• 38:40 - The Rules of Investing's three favourite questions (what investors are getting wrong, a big win and loss, and a stock Jun Bei would back for the next 5 years)