Murray’s on fire…! (Plus, an ASX income idea) | Term Deposits

Today’s Fat Tail Daily begins with a hat tip to my colleague Murray Dawes. You see his charts in these notes on daily basis.

Somehow…call it black magic or some such if you’ll…Murray known as the underside in lithium lately…and so it’s proving (up to now!).

The hottest stock on the market proper now’s abruptly Pilbara Minerals ($PLS).

Here’s the chart of PLS…

Murray bought his subscribers on to PLS back in July. They’re up practically 40%…in a month.

That’s a cracking return for such an established stock.

I need to say, too, that Murray is on a bit of a scorching streak.

He put his subscribers into Lynas Rare Earths ($LYC) back in April too and that took off like a firecracker lately as nicely.

Yes…a rising market helps…however there’s a lot more to it than that.

Take, for instance, the latest outcomes from JB HiFi ($JBH). As a business, JBH goes simply effective and dandy.

But the stock offered off yesterday, practically 9%. A latest entry into JBH wouldn’t have gotten you very far, as its present outlook is totally priced.

Trading and investing demand some aspect of shock that the market hasn’t factored in. That’s your potential upside.

In the case of lithium, there’s been some restoration within the price…and now a sudden shutdown of a Chinese mine.

That’s giving the sector a kick…and any short sellers are scrambling to get out of the best way.

Yes…upside is what we would like!

This is one motive why I used to be so pumped for the market back in 2023. Buying in or after a bear market provides you a lot potential upside!

We’re in 2025 now…and the final market is trying richly valued.

Take this from The Australian …

“Morgan Stanley continues to warn that the market’s price-to-earnings ratio remains elevated at 19.4 times forward earnings, sitting 2 standard deviations above its long-term average of 14.8 times.

“At 19.8 times, the ASX 300 PE is only 2 per cent below the peak from the post-Covid boom in 2021.”

This is why Murray’s advice will be so helpful. The market, basically, might not have 30-40% upside in FY26…however lots of particular person stocks do.

You don’t must go loopy taking dangers both. Murray’s service is known as Retirement Trader.

He is aware of completely nicely his shopper base is on the lookout for ‘alpha’ with out desirous to wager their life financial savings on some biotech with no income.

You is likely to be stunned how usually very stable firms unload…and provide you with a have a look at a cracking price.

Sticking with Murray, case in pointwas sleep apnoea firm ResMed ($RMD) back in 2023.

It did a swan dive when the market panicked over new weight loss medicine affecting its addressable market.

Here we’re 2 years later…and RMD is up practically 80% and in any respect time highs.

Of course, we are able to’t use hindsight bias right here, both. RMD may have saved dropping, or gone nowhere.

This is the place Murray’s years of expertise counts for a lot too, plus his risk management system.

Where is likely to be an alternative now?

One concept is GQG Partners ($GQG). Be conscious that that is me sharing this concept – and never Murray.

I definitely recommend you put this on your watchlist. It’s a US based mostly fund supervisor. It had a massive breakout from 2023 into 2024. It’s now down about 40% since peaking round $3 per share.

It’s funds underneath management growth has stalled, and even went backward final month…and traders dumped the stock as a outcome.

However, it stays a massive fund supervisor, and really profitable.

Right now, my colleague Greg Canavan says its trading on a P/E of 7. That appears very low cost certainly.

I definitely recommend you’re taking an curiosity should you’re occupied with dividends and income. GQG pays out most of its earnings.

I keep in mind the final time the stock offered off that the management thought-about a stock buyback.

They held back as a result of of some quirk of their capital construction, from reminiscence. However, I wouldn’t be stunned in the event that they did one thing related again.

You don’t need to hurry on this one. Look it over. Consider the thought. Watch how it trades. most significantly, monitor is month-to-month updates on its fund flows.

The market shall be delicate to this as a result of of the latest ‘mini crash’. Ideally, we wish to see that stabilise and begin growing again.

There’s an concept so that you can observe. Let’s examine back in on it, later within the yr.

***

Source: Tradingview

[Click to open in a new window]

Since the lows hit in 2020 during the COVID panic, main stock markets across the world have been in a stable bull market.

US, German, and Japanese stocks are up between 124-150%. It is constructive that each one three markets are rising in unison.

The poor outdated S&P/ASX 200 [ASX:XJO] runs a distant fourth with a 74% bounce. Clearly remaining uncovered to simply the ASX results in poorer efficiency within the long run.

But whereas the opposite three stock markets are working the ASX will float larger as nicely.

There is now nothing however blue sky above and stable momentum beneath every market. That means stocks will proceed doing what they’re doing till acted on by an equal and reverse pressure.

There’s no doubt there are trapdoors under that may set off a chain response of promoting if the market falls by way of them.

But I need to see the market falling by way of the trapdoor earlier than I might react.

Second guessing the market and attempting to select a high is a idiot’s errand. Instead I’m cheering the market on to maneuver into a melt-up section the place making money is like capturing fish in a barrel.

I’ve outlined the strains within the sand under the market the place I’ll develop into involved however will stay bullish till these ranges are hit.