In this Australian Investors Podcast episode, your hosts Owen Rask and Drew Meredith are back for 2 Sense, discussing:
- Buying falling stocks vs chasing winners
- Designing the perfect ASX ETF
- Xero Ltd’s (ASX: XRO) AI deal with Anthropic and what it means
- CSL, inflation risks, and market concentration concerns
If you love learning about long-term investing, ETFs, and portfolio strategy, subscribe to the Australian Investors Podcast on Apple, Spotify, or YouTube.
Topics Covered
💡 Falling knives vs momentum winners
- Would you invest $100k into a stock down 40%… or up 40%?
- Drew leans toward “falling knife” investing, betting on mean reversion
- Owen highlights opportunities in high-quality growth at discounts
- Key takeaway: valuation + time horizon matter more than recent performance
🧠 Designing the perfect ETF
- What would you do with $50M to launch an ETF?
- Drew’s idea: a “falling knife ETF” buying beaten-down stocks
- Owen’s idea: a high-growth, founder-led strategy inspired by venture investing
- The big insight: Blending styles (value + growth) may outperform either alone
🤖 Xero + Anthropic: AI meets accounting
- Xero partners with Anthropic
- AI (Claude) will integrate directly into Xero’s platform
- Potential impact:
- Real-time financial insights
- Automated invoicing and bookkeeping
- “CFO-like” functionality for small businesses
- Big question: Does AI enhance Xero… or eventually replace it?
📉 CSL: from premium darling to “cheap”?
- CSL now trading ~15.5x forward earnings
- Facing:
- US competition pressures
- China regulatory changes
- Strategic pivots and cost cuts
- Key debate: Is this a rare opportunity to buy a world-class business at a discount?
🌍 Markets, inflation & concentration risk
- Inflation concerns rising again (Middle East conflict impact)
- Fuel excise cuts may actually increase inflation
- Top 10 ASX stocks now ~49% of the index (huge concentration)
- Key idea: “Safe” isn’t always safe — concentration risk is growing
🧠 Is investing just storytelling?
- Markets often move on narratives, not fundamentals
- Example: coal stocks rallying on energy disruption stories
- Insight: Investors must separate signal vs narrative hype
Listener Questions Answered
🧾 Investment bonds for kids (The Frugal Farmer)
- Tax-paid structure with 10-year rule
- Useful for: High-income earners, Intergenerational wealth
- Not always the best option — depends on tax situation
🏠 SMSF + property advice (Deer in the Headlights)
- Using advisors within property/SMSF firms = potential bias
- Key takeaway: Seek independent financial advice for major decisions
💰 LICs vs ETFs (AFICionado)
- Australian Foundation Investment Company DSSP can defer tax
- But ETFs still often more tax-efficient than people think
- Drew’s view: Prefer flexibility over automatic reinvestment
📊 Too defensive for growth? (Goosebump)
- Portfolio includes cash, credit, and gold ETFs
- Likely too defensive for someone in late 30s seeking growth
- Key idea: Defensive assets = optionality, but may limit long-term returns
Final Thoughts
This episode is a masterclass in how to think, not what to think:
- Markets are noisy — stay focused on fundamentals
- Blending strategies beats extremes
- AI is reshaping entire industries (fast)
- And your biggest advantage? A long-term mindset and disciplined process
