Rudi’s View: Qantas, AMP, Infomedia And Lovisa

Always an independent thinker, Rudi has not shied away from making big out-of-consensus predictions that proved accurate later on. When Rio Tinto shares surged above $120 he wrote investors should sell. In mid-2008 he warned investors not to hold on to equities in oil producers. In August 2008 he predicted the largest sell-off in commodities stocks was about to follow. In 2009 he suggested Australian banks were an excellent buy. Between 2011 and 2015 Rudi consistently maintained investors were better off avoiding exposure to commodities and to commodities stocks. Post GFC, he dedicated his research to finding All-Weather Performers. See also "All-Weather Performers" on this website, as well as the Special Reports section.

Rudi's View | Mar 12 2021

Favourite theme-exposures and sector top picks from stockbrokers post the February reporting season.

By Rudi Filapek-Vandyck, Editor FNArena

Portfolio recalibration. We don't often hear about it, but we can be 100% certain that's what is happening, a lot, behind the curtains of the 2021 share market volatility.

Assuming the bond market is not yet ready to lay low, but the economic recovery goes on uninterrupted, this year's momentum trade should continue to favour:

-Cyclicals over Defensives
-Cheap & Value over Quality and Growth
-Small Caps over Large Caps

Of course, the above switch in market momentum has already been in place since late last year. The public debate will therefore concentrate on how long this aberration from the past five years or so will/can/should last? The answer probably lays with how quickly portfolio re-adjustments can be executed, and how much damage this will/can inflict on last year's winners.

The dilemma for investors thus becomes: do I hold on to last year's winners, in the knowledge there is not necessarily anything wrong with the underlying companies I hold, and as certain as day follows night, portfolio switching will eventually have run its course? Or do we abandon losers and join the bandwagon of this year's new momentum trade?

The answer, I believe, probably lays somewhere in the middle. In particular given many a quality stock is already down -25% or more over the past few weeks. Conviction and an iron stomach may be needed for longer, though.


Those investors looking to re-calibrate their own portfolio, partially or otherwise, might take some inspiration from UBS's recent strategy update. In it, UBS strategists revisited the investment themes they believe are most dominant in this year's landscape, with favourites and best-to-avoid suggestions included.

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