The job of multi-asset investors is to build portfolios where a concentrated, catalyst-driven strategy has the space and the time horizon, five to seven years, to do what it does, without being rolled out at the worst possible moment.
 
This week, JR spoke to James Hawkins of L1 Capital about what it takes to run ten stocks through stretches where high-conviction, value-driven investing was decidedly out of favour.

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Rising GDP does not reliably translate into returns in emerging markets. The index is dominated by state-owned enterprises, political conglomerates and whichever theme is in vogue. Today that’s semiconductors, at more than 40% of the index. 

We speak to Rahul Desai of Aikya, who focuses on cash-generative domestic franchises across India, Brazil and South Africa that have compounded at 10–15% in US-dollar terms for two decades. Their core principle is that you lose money two ways, by buying poor quality or by overpaying.

Australian employment and US earnings led the news last week. The story is a familiar one wearing new clothes: an energy shock testing disinflation progress just as markets question the AI capex boom's cash generation. 

Get access to the graphs: www.investsense.com.au/industry-articles/who-funds-the-ai-boom-when-borrowing-costs-are-rising 

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Andrew Hunt often says Markets = Faith x Liquidity. While faith may have peaked, liquidity clearly hasn't yet. His message is to stay invested for now, while avoiding the frothiest and most volatile areas of the market which will move quickest and most if the dynamics of that equation deteriorate further. Is Korea over the last 6 weeks or so the canary in the coal mine? He will also be watching for the point where quantitative tightening actually starts to shrink liquidity rather than just reshuffle it, at which point we will have another, possibly hasty conversation.

As the US reporting season gets underway, volatility has been creeping back into markets, and in a distinctly uneven way.In summary, the Australian economy is looking a little resilient, and a flat year behind us means a more stable valuation starting point, not such a bad thing. The volatility in hotter corners of markets is worth discussing alongside how portfolios are positioned around it. While we see no reason to run for the hills, the next year may not look like the last one. What we are seeing in Korea might be an early signal, or big tech earnings may continue to impress and settle things again. 

Get access to the graphs: www.investsense.com.au/industry-articles/volatility-returns-but-not-everywhere 

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Most markets finished the week lower, though the Australian market held its ground. The pattern is telling: a dip through the middle of the week and a partial recovery into Friday.  The oil price traced almost the exact mirror image, spiking to around US$80 a barrel before easing back to US$76. 

Get access to the graphs: www.investsense.com.au/industry-articles/looking-through-the-noise-with-markets-priced-for-much-good-news

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Markets moved through a defining week as three storylines, a fragile Middle East de-escalation, a softer US labour market and a renewed wobble in the AI trade, reset expectations for the second half of 2026. It also closes a financial year that, in hindsight, was almost entirely about momentum and about being on the right side of the AI trade.

Get access to the graphs: www.investsense.com.au/industry-articles/ai-oil-and-a-flat-local-market-fy25-26-in-review  

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We discuss the RBA’s reaction function and a potential Fed regime change under new Chair Kevin Warsh with Christian Baylis at Fortlake Asset Management. We like talking to Christian every few months as he manages a go anywhere absolute return strategy and so is relatively unbiased but also a subject matter expert in rate markets. The quick take: the regime change at the Federal Reserve is bond-friendly at the long end and bond-unfriendly at the short, while the RBA's hard-won credibility leaves Australian rates biased higher for longer because the RBA is not quite incentivised enough to go too hard win inflation. 

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Markets spent the week leaning into the better news from the Gulf, however Iran–Israel ceasefire is not straightforward.

Get access to the graphs: www.investsense.com.au/industry-articles/oil-peace-and-the-price-of-patience 

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A week that began with hope ended with a reminder that geopolitics rarely moves in a straight line. The US and Iran signed a memorandum of understanding in Switzerland on Friday, formally opening a 60-day ceasefire and lifting the naval blockade on the Strait of Hormuz. Brent crude slumped almost 7% over the week to just above US$80 a barrel, the lowest in three months, while the Dow closed at an all-time high midweek. By Sunday, however, fresh Israeli strikes on Hezbollah, Iranian threats to re-close the Strait, and pointed comments from President Trump had markets reaching for the seatbelts again.

Get access to the graphs: www.investsense.com.au/industry-articles/markets-exhale-then-catch-their-breath 

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