It has been a big week for market moving headlines. Following the long weekend, we arrived back at our screens on Tuesday to a DeepSeek-driven tech rout in the US and a plunge in Nvidia shares. Depending on which article you read, it was either the end of the tech rally in the US, or a minor bump in the road. As is often the case, the reality (so far at least), is somewhere in the middle.
In other news, we saw the Fed keep interest rates on hold and speculation mount that they may keep them there for the rest of the year – a big call given January is only just in the books. Locally, Aussie inflation came in cooler than expected, all but guaranteeing a rate cut next month. US earnings season rolled on with companies largely beating expectations so far, with overall earnings expected to have grown around 11% in Q4 2024 according to BlackRock.
Meanwhile, local reporting season has kicked off – albeit modestly – and will ramp up through February. Expectations for earnings aren’t as high as in the US, but it is always interesting to cut through the noise and get an up-to-date assessment of the health of corporate Australia. Livewire will be across all the action, with our usual stock coverage and fund manager analysis, C-suite interviews, and educational material. If you thought this week was a big one in markets, buckle up - February could be even bigger.
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Stock markets are off to a flying start for 2025. The S&P ASX 200 is up nearly 5%, with gold, banks and technology companies leading the charge. The consensus view is that banks and tech are expensive, but the market doesn’t seem to care. Momentum investing works for legends like Paul Tudor Jones, but as Seneca’s Luke Laretive explains, most investors aren’t Paul Tudor Jones. In this episode of the Rules of Investing, Laretive shares some tips for keeping a cool head when markets are on fire and discusses three stocks he thinks can deliver strong results in the upcoming reporting season.
3 ASX stocks that highlight how active investing delivers outperformance
We are advocates for active investing, but that's likely because our index-unaware strategy has outperformed over 12 years. But mostly, we believe active investing works because we believe that fundamental indicators like earnings growth, free cash flow, balance sheet strength, and ROIC remain key to long-term investing success. Managing concentration risk, financial gearing, and FUM size are also crucial. Active managers don’t need to be perfect—disciplined risk and portfolio management drive outperformance. In this wire, we highlight past stock-picking successes, explaining our investment rationale and outcomes. We also share a current opportunity we believe holds similar potential.
You get $320,000! And you get $320,000! Everyone gets $320,000!
Source: Norges Bank Investment Management, Reuters
Before you ask, no I am not Oprah and I don’t actually have $320,000 to give every reader of this newsletter. But you know who might have that kind of money? The Norwegian Sovereign Wealth Fund.
This week, it was revealed that the value of Norway’s wealth fund (their equivalent of our Future Fund) increased by - get this - $355 billion in one year. If you took the market value of the fund, as it currently stands, and divided it equally among the population of Norway (around 5.5 million people), you’d get a per capita wealth boost of around NOK3.6 million (or around US$320,000.)
In case you’re interested in how they did it, here’s the breakdown of the fund’s holdings, as of the end of 2024:
71.4% of the fund's assets were allocated to equities, bonds make up 26.6% of the portfolio, unlisted real estate is 1.8% and renewable infrastructure represented 0.1% of investments.
While I’m on this subject, I’d highly recommend listening to the podcast hosted by Norges Bank Investment Management CEO Nicolai Tangen - “In Good Company”. The show features Tangen doing one-on-one interviews with the leaders of the companies that the Fund is invested in. It’s a really, really good listen and for those who don’t have time for the 1 hour versions, there are 10 minute snippets you can enjoy as well.
It was a big week for market-moving headlines. Did any of the following cause you to make any portfolio changes?
a) DeepSeek's rise/Nvidia's selloff-then-rebound b) The Fed holding interest rates c) Australian inflation coming in cooler than expected d) US earnings season results e) None of the above
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