Picking stocks for 2025

Rob Armstrong (0:06)

Pushkin. Let's play a game. The game is called the 2025 Financial Times Stock Picking Contest. Here are the rules. You pick five stocks, long or short, by this Friday at midnight. No mutual funds, no ETFs, individual names only. No trading your portfolio until the end of the year. If you finish first, your reward is perpetual glory.

This is Unhedge, the Markets and Finance Podcast from the Financial Times and Pushkin. I am Rob Armstrong here at Unhedge World Headquarters in beautiful New York City. And today, we're going to pick some stocks. I am joined by two brilliant colleagues, my trusty Lieutenant Aiden Reiter.

Aiden Reiter (1:03)

Good morning.

Rob Armstrong (1:04)

And Alan Livsey, down the telephone from London. Good morning, Alan.

Alan Livsey (1:09)

How are you?

Rob Armstrong (1:10)

We are well. Alan, we have a question here in New York. What is your job exactly?

Alan Livsey (1:16)

I'm a lone wolf. I'm wandering the floor looking for asset management and investment ideas.

Aiden Reiter (1:24)

A lone wolf stalking Bracken House.

Alan Livsey (1:26)

Wait for the full moon and then I appear.

Rob Armstrong (1:30)

Okay. So I want to talk about what we think are the right stocks to own, but I have a few things to say and to ask first. The thing I have to say to our listeners, and I want you to listen very closely, this is not investing advice. My results in the last two years of the stock picking contest are proof that it is not investing advice. The second thing I want to ask of Aiden and Alan is what kind of year are we expecting? When you were picking stocks, what kind of year were you thinking about? Alan, what's 2025 going to be like for financial markets?

Alan Livsey (2:07)

Donald Trump has already begun to throw wrenches into the greater machinery of the world's markets and economies, and I'm counting on him keeping that up. But where he's going to throw the most wrenches I suspect, and he's already started, is at the Federal Reserve. I think he is going to keep coming if Mr. Powell doesn't deliver lots of rate cuts.

Rob Armstrong (2:33)

He put out a really nasty tweet, or what do we call the things one does on Truth Social?

Alan Livsey (2:39)

Truths?

Aiden Reiter (2:40)

Truths, I think.

Rob Armstrong (2:40)

Okay, Aiden, what was that? So we wrote a little bit about the truth. You wrote a little bit about the truth yesterday.

Aiden Reiter (2:45)

When he was at Davos, he said to the various globalists there that he wants all interest rates in the world to drop. Yesterday, after the Fed did not drop the rate, he said he's going to do it himself, gosh darn it, whether that be through his various MAGA policies or something else, he will make the US economy stronger.

Rob Armstrong (3:04)

So he's a drone pal hater. What does that imply, Alan?

Alan Livsey (3:08)

I think he's going to attack the Federal Reserve on a regular basis and make markets, investors question the dollar and that will draw people to alternatives, but particularly gold. Back when we worked together on Lex, Rob, we wrote horrible things about the gold market and the gold investor, but no longer.

Rob Armstrong (3:32)

They're laughing at us recently. They made a lot of money.

Alan Livsey (3:34)

They're not laughing at me because on Lex in my final years, I became more of a, not a Lex gold bug, but just let's say much more favorable.

Rob Armstrong (3:42)

Okay, so he's one of your picks of gold stock. Now we're getting to picks. Two.

Alan Livsey (3:46)

Two of my picks. I wanted to do junior gold miners. It's kind of hard.

Rob Armstrong (3:51)

What does that mean, junior gold miner?

Alan Livsey (3:53)

A junior miner tends to have no cash flow. They'll have an asset. They may well just have begun production, but they'll be very small as the name implies. But they'll be higher beta.

Rob Armstrong (4:05)

Yeah.

Alan Livsey (4:05)

Higher beta kind of play.

Rob Armstrong (4:06)

They're more leverage to the price of the metal.

Alan Livsey (4:09)

I would expect that. So I went down the smaller end of the scale and I went through the recommendations I could find. And a couple stood out and I suspect I'll get some hate mail on this. Maybe not, maybe yes. But I picked Dundee Precious Metals and another one called Oceana Gold. The Oceana Gold actually has an asset in the United States. I believe it's in Nevada.

Rob Armstrong (4:33)

I think that's an interesting play because there is going to be more mining in the United States.