In this Stockhead series, investment manager James Whelan from VFS Group offers his insights on the key investment themes and trends in domestic and global markets. From macro musings to the metaverse and everything in between, Whelan offers his distilled thoughts on the hot topic of the day, week, month or year, from the point of view of a professional money manager.
Well… how about that?
New day, new week, new PM. I’m not the biggest fan of the ALP being in charge but this election will be remembered as being the lesser of two evils and how strong the independent and climate vote now is. The people of Australia painted a rainbow and it’s green, red, blue and teal.
People have mentioned: “I can’t believe the people voted for the guy who couldn’t remember the unemployment rate”.
To that I respond: “I can’t believe the Liberals couldn’t put up a decent fight to the guy who couldn’t remember the unemployment rate.”
Snap.
Last thing. The guy who I went up against on the dumbass idea of taking money out of your super to buy a house at ludicrously inflated prices now has to hope his super has enough in it for his own retirement. Spoiler alert: it almost certainly does.
Never forget this nonsense he posted for “Flag Day” and if you can zoom in on the faces you’ll know how the people of his electorate felt about him then and how they voted along those lines a while later.
But climate is absolutely a policy issue that has to be front and centre for every major party. For some it already is. And we know that strong climate policy means the following:
…Renewables
…COMMODITIES!!!
You can’t build all that stuff without needing a whole heap of other stuff (sorry for getting too technical).
Bloke on Twitter did the hard work for us and simply noted the parts in the ALP policy that we need to pay attention to:
Then mix it in with this cracker over the wires:
And you’ve got a recipe for us needing to use lots of our own stuff.
So all the usual large and small cap resource names are required. Lithium names. There is no local lithium ETF so I just threw the question out to the team and CXO is a name they like.
Thanks team. Do your own research on that one. I’m not that guy.
Meanwhile the Bank of America Fund Manager Survey came out last week for May and it showed us all the expected:
- Very bearish report
- Cash balances above 6% (highest since 9/11)
- Tech is the biggest short since August 2006
- Biggest equity underweight since May 2020
- All signs are pointing to a contrarian Buy being enacted with just one thing missing: the has been no capitulation yet.
Morgan Stanley are calling this selloff “orderly chaos” and they’re right. This isn’t a crash.
Even more troubling is when this happens. Fundies are overweight staples vs tech:
Then you see a bunch of US staples report abysmally. Some of the biggest names in America getting their worst days since the ’87 crash handed to them.
This is the iShares Global Staples ETF KXI and it was a beacon of light unto us all… then… you know:
Snap. Again. Nothing’s easy under Albanese, it would seem.
We cover capitulation on the podcast (check it out here) with Heath Moss (HLM Investments) and Kyle Rodda (Ausbiz).
I also have a chat about how China may now be un-uninvestable. But that’s for a later date…
Stay safe and all the best,
James.
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