Only one global stock pick won last year – and it’s not even listed overseas anymore – Hans Lee


Much like the end of a calendar year, July is a time of reflection for investors. I saw that Fiscal 21/22 had previously been described as an ‘all pain and no gain’ year – a clickbait headline no doubt intended to reflect the ASX’s 10% decline over the past 12 month. This is only the third time the ASX has suffered a financial loss in the past decade.

The S&P 500 posted its worst half since 1970, while the NASDAQ is down almost 30% since the start of the year. Bitcoin may be down 60% year-to-date, but the 60/40 portfolio has had its worst year since before the global financial crisis.

In April, I assessed the progress of your most important global stocks. Since then, we have had a unification, a stock split and many steep falls.

In fact, the data crunched by our own William Heine revealed the drops were so steep that only one of the Top 10 Global Readers’ Choices recorded a positive year.

Stock price: US$63.90/share

Market capitalization: US$37.09 billion (-47.77% YTD)

Tech stocks have been crushed over the past six months as investors reassessed the landscape around inflation and rate hikes. While not Zip or Sezzle, Block (and its recently acquired Afterpay) didn’t fare much better.

While some analysts would characterize Block as a “dropping knife” (given its stock price trajectory), ARK’s Cathie Wood has actually been a notable buyer of late. Wood bought US$5 million several months ago (while offloading Twitter and PayPal in the process).

But the Schroders Australia team definitely don’t think it’s time to buy the dip. They wrote a recent article worth reading about why they would support Uber over the buy-it-now-pay-later darling.

9. Tesla (NAS: TSLA)

Stock price: US$681.79

Market capitalization: US$706.6 billion (-43.17% since the start of the year)

There’s not much to say about the electric vehicle investment poster (as my learned colleague Angus Kennedy once wrote), but his challenges in China have been a huge thorn in the side of the company for some time. After Elon Musk called the German and Texas operations “money furnaces,” his China operations became a much larger component of the company’s operations. The only problem? Shanghai and Beijing have been in and out of lockdowns.

Nevertheless, Mary Manning of Alphinity Investment Management still has faith. Here she wrote recently why this is the case.

8. Walt Disney (XNYS:DIS)

Stock price: $96.14/share

Market capitalization: US$175.1 billion (-38.67% YTD)

Disney announced results below expectations for the last quarter. The biggest problem for its track record was consumers turning away from streaming media (not to mention increased competition). The company’s theme parks have also been hit by lockdowns in China – where its Shanghai theme park has been closed for more than three months.

But it’s not as if management were concerned! CEO Bob Chapek has just had his contract renewed for three years. Unfortunately for shareholders, the price is back to its March 2020 low. Let’s see where things go from here.

7.Nio (XNYS:NIO)

Stock price: US$21.36

Market capitalization: US$35.68 billion (-36.18% YTD)

China’s answer to Tesla hasn’t had the most fun ride of the past year. Shares also saw a significant drop recently after the company hit back at a short-selling report claiming Nio was exaggerating revenue and profit margins. Naturally, the company denied the allegations.

6. Amazon (SIN: AMZN)

Stock price: $109.56/share

Market capitalization: US$1.11 trillion (-35.7% YTD)

Amazon shareholders have just completed their worst first half since 2002. The company’s first-quarter earnings fell short of analysts’ estimates in April as revenue growth slowed. At the beginning of June, the CEO of Amazon Consumer resigned. Then, to cap off a crazy quarter, the company launched a 20-for-1 stock split.

Nonetheless, it was mined by Lachlan Hughes of Swell Asset Management as a stock presenting a “once in a generation” buying opportunity. The secret? A billion dollar component in the wheelhouse of Amazon. To find out what it is, click here:


Global stocks presenting a once-in-a-generation buying opportunity

5. Alphabet (NAS:GOOGL)

Stock price: $2,174.75

Market capitalization: US$1.44 trillion (-25% YTD)

Speaking of stock splits, Alphabet is about to undergo a 20-to-1 stock split itself. Of course, you can’t deny the power of its flagship product – Google. The entity owns more than 90% of the global search engine market and, in turn, controls the pricing of advertising revenue.

In April, the company reported weaker-than-expected first-quarter earnings and revenue. And by weaker than expected, we mean that it continues to grow at a rate of 23% year-over-year. Which is never something to sneeze at.

Speaking of Google, Kingsley Jones wrote this terrific article on the big tech space writ large – and in particular, the allure of bypassing it! Worth reading:


How to Tame a Grizzly Bear (FANG’ed)

4. Apple (SIN: AAPL)

Stock price: US$138.93

Market capitalization: US$2.25 trillion (-23.67% YTD)

It doesn’t sound like a broken record, but Apple shares are, like most others on this list, in the red thanks to the bigger drop in tech stocks. But the one thing Apple has that many other companies don’t? Brand loyalty.

iPhone sales – Apple’s bread and butter – accounted for more than half of all revenue last quarter. Although this has been the case for years, this makes innovation all the more important for the hardware and software business.

Revenue from cloud subscriptions also continues to climb. But, much like Microsoft, a strong US dollar could be a major hurdle for its offshore customers.

For Apple’s bears, they point to one thing and one thing only: valuations. Chris Watling told me recently that he doesn’t think we’ll see a more normal world for earnings ratios until Apple hits a “10.” It is currently at 10:58 p.m.

Asset allocation

Chris Watling: Recession is not a ‘slam dunk’ but the bear market can last

3. Microsoft (NAS: MSFT)

Stock price: US$259.58

Market capitalization: US$1.94 trillion (-22.46% YTD)

Like the rest of the market, this veteran tech giant faces macro threats, but the underlying business remains strong. That said, Microsoft faces a different kind of headwind. While most U.S.-based companies wouldn’t mind a stronger U.S. dollar, Microsoft isn’t, because a pullback to the safe haven directly impacts its bottom line.

Still, its cloud and LinkedIn businesses could excel for the company, even at a time of changing consumer demand. Microsoft, along with another company, is still part of Lazard Asset Management‘s investable “universe.” To find out what the other is, click here:


Five global stocks that could outperform in the global rotation to value

2. Alibaba (SIN: BABA)

Stock price: $116/share

Market capitalization: US$629.6 billion (-1.22% YTD)

Investors have every reason to still be nervous about investing in Chinese tech stocks. Beijing has, at the time of writing, failed to make a concrete decision on whether to ultimately let ANT Group go public. But some sell-side analysts like Goldman Sachs said now is the time to buy Chinese stocks. Morgan Stanley said Chinese names are worth snacking on, but warned investors to watch developments in the country’s “COVID zero” policy.

Some analysts, like Andrew Macken in Montaka, go one step further – arguing last month on Livewire that we are in for a ripe buying opportunity for Chinese and US tech stocks. For his introduction, read here:


Bullwhip Effect: Why Big Tech Earnings (and Stock Prices) Will Rebound


Stock price: $39.71/share

Market capitalization: 201.48 billion dollars (+0.58% since the beginning of the year)

Although now only listed in Australia, it was a dual-listed company at the time of the survey, so it is mentioned in this list. For more on BHP’s year so far, you can read David Thornton’s article on the ASX’s most popular stocks, coming soon.


With further central bank interest rate hikes an absolute certainty, the question now is how fears of a recession will take hold over the next half year. Is everything included in the price? Not expensive enough?

If you believe John Higgins of Capital Economics, the answer might be the second.

We don’t expect US stocks and Treasuries to do well in the second half of this year…we think analysts’ optimistic earnings expectations are inconsistent with the broader economic growth environment weaker and stronger dollar that we expect, especially as margins are stretched. A disappointing earnings result could also drive up the equity risk premium.

On the other hand, the tech-heavy composition of this list suggests that you will all be watching the performance of the NASDAQ 100 closely over the next few months. Grab these comments from Fundstrat’s Tom Lee:

Investors Say Tech Is ‘Done’, But We Think Tech Demand Will Accelerate [over the] coming years.

Only time will tell which comment ages best.

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I will be responsible for asking the questions of Australia’s top macro strategists, economists and bond fund managers. If you have any personal questions or guests we should chat with, email us: [email protected]


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