This is an audio transcript of the Unhedged podcast episode: ‘Our 2024 stock picks’
Katie Martin
One thing that happens a lot if you write about financial markets for a living is that people ask, what stocks should I buy? Have you got any tips? And when people ask me that, I always say no, which my husband says is very boring of me. Now, there’s a couple of reasons I say no.
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One is that if a tip comes from non-public information then it’s unethical and, you know, probably like, illegal. So it sounds bad. I don’t intend to test that theory.
Robert Armstrong
I’ll visit you in jail, Katie. You don’t have to worry about that.
Katie Martin
(Laughter) The other reason, well, listen on. As a teaser, I will tell you, you seriously do not want to listen to most stockpicking ideas. This is Unhedged, the markets and finance podcast from the Financial Times and Pushkin. And while everyone else is talking Trump, Trump, Trump, we have a little palate-cleanser for you. We’re gonna pass all this Trump stuff at a later date very shortly. I’m Katie Martin, a markets columnist and huge idiot here at the FT in London. And I’m joined by my usual co-pilot, His Excellency Mr Robert Armstrong, from the Unhedged newsletter in New York. Rob, say hello.
Robert Armstrong
Katie, I would have described you as like a medium-sized idiot. I think you’re selling yourself short.
Katie Martin
(Laughter) But also, Rob and I are joined by an Unhedged podcast newbie, our very own UK news editor Kadhim Shubber, who usually concerns himself with the ins and outs of UK politics and policy. But today, he joins us as a super-genius markets guru. Kadhim, welcome to the show. We are truly not worthy.
Kadhim Shubber
I am very excited to be here. I have my victory lap.
Katie Martin
(Laughter) Right. Then if you’re listening, you’re probably wondering what on earth we’re all talking about. So every year the FT’s Money section, which is all about how to manage your money, unsurprisingly, runs a stockpicking competition. It’s just a bit of fun. It’s fun. It’s not serious. You should definitely not take it seriously if someone does really, really, really, really, really badly in it. So you pick five stocks and you bet on them or against them. Your bets stay the same all year and at the end, you see who’s done the best. And it started off as a bit of a kind of little jokey thing between people at the FT. And then it became like a big thing that readers can play. And this weekend, the results for 2024 will be out. And so listeners, you’re getting a sneaky early steer on the results. Kadhim over here.
Kadhim Shubber
Winner, two years running.
Robert Armstrong
Did you win out of all entries or just the FT?
Kadhim Shubber
No. Just at the FT.
Robert Armstrong
He’s the FT winner two years in a row.
Kadhim Shubber
I’m the best FT journalist.
Katie Martin
All right, Kadhim. Reel it in. So first of all, the best FT journalist two years in a row. Although there was someone from Commercial FT apparently who beat you this year, so ninky ninky na na.
Kadhim Shubber
Oh really?
Katie Martin
But twice in a row out of FT Editorial’s not to be sniffed at.
Robert Armstrong
I cannot wait to hear what Kadhim’s theory is. How it works, what his process is.
Katie Martin
So he was 12th in the competition, overall, out of something like 1,364 people.
Kadhim Shubber
Dang. Really good.
Robert Armstrong
Warren Buffett.
Katie Martin
Kadhim, the floor is yours. Please tell us how you managed to be so clever.
Kadhim Shubber
So have you heard of a little thing called crypto? Turns out, you know, it’s a great, great buy. And last year I went long crypto. And when I came first among FT journalists, they asked me, what are you gonna do next year? And I said, I’m going long crypto again.
Robert Armstrong
So, but, you know, you can’t just buy bitcoin. What particular vehicles did you use?
Kadhim Shubber
Ah, well. So last year, I went mining stocks. And when I was asked, are you gonna do this again, I said yes. And it was written up very snarkily, as he claims he will do the same strategy for the second year in a row. But I did. So this year I went two bitcoin mining stocks, Marathon and Riot. Admittedly, they did not do that well. But then I went Coinbase. Boom. That did great. I went MicroStrategy, which went all the way to the moon. And then I had a little AI amuse-bouche with Nvidia.
Katie Martin
So looking at the spreadsheet, I’ve got a little clip of the spreadsheet in front of me. So there’s a little thing where you can kind of say why you bought or sold what you bought or sold. So MicroStrategy, his rationale for going long was moon. (Kadhim laughs) Nvidia, his rationale for going long was AI moon. Coinbase, his rationale for going long was moon. Marathon Mining, you’ll be surprised to hear his rationale was moon, and Riot Platforms, moon.
Robert Armstrong
I love this.
Kadhim Shubber |
I forgot that I had put those down as my reasons. (Laughter) But you know, I’ve covered crypto in the past and the fact is that you meet people with this energy and there’s, you know, not a number of mainstream journalists that’s not zero that sniffs at this kind of thing.
Robert Armstrong
It’s two on this podcast, right?
Kadhim Shubber
Two on this podcast. And yet the people with that kind of energy, at least some years, they make some money and, you know, other years maybe less.
Robert Armstrong
Maybe they won’t.
Kadhim Shubber
This year they made a lot of money.
Robert Armstrong
I’m not gonna let you off the hook with these kind of journalistic anecdotes. Do you believe in crypto as an asset class, Kadhim? Yes or no.
Katie Martin
Good question, Rob.
Kadhim Shubber
Well, I can’t honestly say yes, but that’s not quite the same as saying no, especially when my strategy this year is probably gonna be going long crypto again.
Robert Armstrong
That was a small masterpiece of equivocation, Kadhim. I congratulate you.
Kadhim Shubber
I have a theory about this game which has not really nothing to do with crypto. You know, there’s no money at risk here. It doesn’t matter if you do badly.
Katie Martin
Did you hear that, listeners? It does not matter if you do badly.
Kadhim Shubber
All that matters is you do well in the funniest way possible. And so you’ve got to pick the highest volatility, biggest-hit stocks that you can find. And if it falls flat, you know, well, you haven’t really lost anything. But if you win, you win going long crypto two years in a row and hopefully three years in a row.
Katie Martin
The bragging rights are all yours.
Robert Armstrong
In last year’s contest, the 2023 contest, the Unhedged entry was basically the opposite. Like we basically positioned ourselves to be short all the crazy, weird stuff. And I think we lost to the index by 1mn per cent, roughly speaking. I think we may have come in dead last of all entries. Somebody else did worse, I think. But we were like, because we like, basically took your philosophy, Kadhim, which is be right or wrong in an interesting way, and we turned out to be wrong. (Laughter)
Katie Martin
Like, I think a lot a lot of people will know, you know, so Marathon Mining and Riot Platforms, these are companies involved in like, bitcoin mining stuff. Coinbase is a crypto trading platform, exchange, it might call itself. Nvidia is in AI so it’s slightly separate. But MicroStrategy is a very interesting, very weird company, right? Like nominally it’s a software company, but really what it does is it buys shedloads of bitcoin, so it’s effectively like a listed company way before crypto ETFs became a thing. It was already effectively a crypto ETF. It was a company whose share price just tracked bitcoin.
Robert Armstrong
Is it a leveraged bitcoin play? Like, did they borrow money to buy this stuff?
Katie Martin
Yeah. They borrow plenty of money.
Kadhim Shubber
Yeah, that’s right. And actually, a big MicroStrategy story is, you know, people looking at if the bitcoin price gets low enough when it’s a sort of crypto winter situation, what happens in MicroStrategy? Does it hit the points at which it’s lending so its borrowing starts to go haywire?
Katie Martin
You can’t argue with how the shares did last year.
Robert Armstrong
You sure can’t.
Katie Martin
They’re up 400 per cent last year. At one point last year, the shares were up 600 per cent. Kadhim, you were one of the 29 people who went long in the competition.
Kadhim Shubber
Is it only 29? I mean, this is the thing, You know, MicroStrategy is the closest . . . In this competition, you can’t do ETFs and stuff. Is that right?
Katie Martin
Yeah.
Robert Armstrong
No mutual funds, no ETFs, no commodities, nothing like that. Stocks.
Kadhim Shubber
Right. So if you want to be long bitcoin in the purest way, MicroStrategy is the stock that you have to peg.
Robert Armstrong
It’s leveraged long. It’s not just long. It’s leveraged long bitcoin, right?
Kadhim Shubber
And so if you’re playing this game, you know, it’s a pretty binary bet. You know, is bitcoin gonna go up or down this year? Dunno. But if you get it right, you knock it out of the park. So the idea that only 29 people have noticed that you should probably go long the extremely volatile commodity, or whatever it’s called, that could send you to the top of the rankings. I mean, I think that people are missing a trick here.
Katie Martin
It’s obvious when you’re a stockpicking genius, Kadhim. I take my hat off to you. What are you gonna call your hedge fund?
Kadhim Shubber
Moon, obviously.
Robert Armstrong
Moon.
Katie Martin
Moon. Moon Capital.
Kadhim Shubber
No, no. That’s too many words. Just Moon.
Katie Martin
Well, unfortunately, we’ve been talking for far too long so we better wrap up this . . .
Robert Armstrong
No, I don’t think so. I don’t think it’s time to wrap up. I think it’s time to talk about Katie’s stock picking results. (Katie laughs) The moment we’ve all been waiting for. (Laughter)
Katie Martin
So as I mentioned, there were 1,364 entrants to this year’s competition. Would you like to guess where I came?
Kadhim Shubber
Is it dead last?
Robert Armstrong
Does it have four digits?
Katie Martin
I was number 1,360.
Robert Armstrong
(Laughter) I was . . . I take it back. You’re not a medium-sized idiot. You are a full-sized idiot.
Katie Martin
I bombed so badly.
Robert Armstrong
I feel for you, Katie. I did the same thing last year.
Katie Martin
You can’t have been that bad. I mean, being the worst in the FT as the FT’s markets columnist is bad enough. But I was like, almost the worst in the entire competition. Let me tell you.
Robert Armstrong
It’s so bad. So did you give the form to your dog? How did you manage this? (Kadhim laughs)
Katie Martin
Well, first of all, I was doing OK at a certain point of the year. I was long ASML, Dutch manufacturer, and at a certain point until July, I was up 58 per cent on this stock.
Robert Armstrong
ASML, as some listeners will know, is kind of the company that makes equipment that you need to have to manufacture high-end microchips. Like you literally, if you’re gonna make fancy silicon, you literally have to buy stuff from ASML. It’s, you know, possibly has the deepest defensive mode.
Katie Martin
How did I lose on this stock though?
Robert Armstrong
And, you know, it’s interesting that even though, you know, you picked what looks like this incredibly solid company, but you’re still exposed to the global chip cycle. Like even that company is kind of cyclical. Intel and Samsung’s businesses kind of fell out of bed. Chip businesses fell out of bed. ASML sinks too. I mean, if you’d looked at that portfolio, if you said what is the least risky stock in here, I would have said ASML.
Katie Martin
I was long Persimmon, a UK housebuilder and I was doing great. I was up about 25 per cent. And then the Budget came along, UK housebuilders did really badly. That all went very pear-shaped.
Robert Armstrong
That sounds like quite a sensible portfolio so far. This is surprising. Yeah.
Katie Martin
Right? Thank you, Rob. Also, look, every year in this stupid competition I short Tesla. It never works. And I thought, sod it, I’m gonna do it again. My rationale that I put in the form was this is just my usual hunch that it has to be the year it comes unstuck. Wrong. Short Tesla didn’t work at all.
Robert Armstrong
How did Tesla do in ’24?
Katie Martin
Well, originally, I was doing well. Again, it was down 40 per cent to April. Then it all went wrong. So I lost my shirt on Tesla. But where I really went wrong is that just as Kadhim had gone long MicroStrategy, I went short MicroStrategy.
Kadhim Shubber
Oh no. What are you doing?
Robert Armstrong
And this is the thing they always say about shorts.
Katie Martin
Never ever go short.
Robert Armstrong
When you go long a stock, the worst you can do is losing 100 per cent. When you go short a stock, sky’s the limit. Or rather, I don’t know. What’s the opposite of sky’s the limit? Hell’s the limit? Whatever is down there.
Katie Martin
Hell is the limit.
Kadhim Shubber
Beginning of 2024, crypto prices had already been, you know, down, I think. At the end of 2023, it wasn’t a good place. Did you think it was gonna (inaudible) even more?
Katie Martin
So you were taking a pure bet on crypto? I guess I was taking . . . So my rationale on the little form here for going short MicroStrategy was crypto in it. And look.
Kadhim Shubber
That’s almost as insightful as moon.
Robert Armstrong
Moon.
Katie Martin
And I am happy to accept that I called this wrong.
Kadhim Shubber
I think the worst decision in that list is not shorting Tesla or MicroStrategy because, you know, maybe it’s the year that those bets come off and then you win big. The one that’s the oddest is Persimmon. I mean, how much is Persimmon gonna go up in a single year? It’s a British housebuilder. How much can that stock move in a single year?
Katie Martin
Kadhim, we’re not having you back on this podcast ever again.
Robert Armstrong
I take the other side of that. Housebuilders are incredibly cyclical.
Kadhim Shubber
But is it gonna be double in a year?
Robert Armstrong
So they’re incredibly . . . You get like a little faint pulse from the UK economy, that stock moves. So if you even have a . . . Even if you have a mildly bullish view on the UK economy, like it goes from being dead to being mostly dead, right, then that, you know, a housebuilder would be very sensitive to that. Those stocks you can win on. I know because I shorted one of those things a few years ago, so.
Katie Martin
I’m incredibly bad at this game. There was one year a few years ago when I was long a couple of UK stocks and I think they both went bankrupt or like one of them delisted or something.
Robert Armstrong
Yeah. When you go long a company that actually disappears, that is rough.
Katie Martin
(Laughter) That was so . . . I’m really questioning whether I should play it again this year.
Robert Armstrong
Can I talk about my dumbest? I had like four stock picks that basically did nothing. My incredibly bad stock pick was (inaudible). I was a long one of the stocks did the worst in all the S&P 500, which was Dollar Tree, which is a dollar store in the United States. And it was a kind of a turnaround play. They just fired a chief executive. There was an activist investor in it. It’s a stock that has made a lot of money in the past. The business model has made a lot of money in the past. And I figured, you know, this is a turnaround story. A lot of bad stuff has happened. They did a bad acquisition. Maybe I could . . . There’s some upside here.
What I completely failed to understand was how rough the combination of the K-shaped recovery in America, meaning everybody has done . . . The recovery has been great in America for everyone except the bottom decile of households. And that’s . . . The bottom decile of households is the core customer of Dollar Tree. And the stock was just taken out to the woodshed and beaten up. It was appalling.
Katie Martin
Chopped into tiny, tiny bits. (Robert laughs) The moral of this terrible story, everybody, is that picking stocks is really hard.
Robert Armstrong
It’s super hard.
Katie Martin
Also, the other moral of this story is this is just a game. This is definitely not investment advice. If you follow investment advice from any of us, you’re even more of an idiot than I am.
Robert Armstrong
I mean, there is a serious point that you just made, Katie, that is worth repeating. Like, if you wanna have any chance to, in a sustainable and responsible way, pick stocks, it is so much work, right? You have to really, really know what you’re buying and you’re reading and you’re calling people and you’re doing research and you are . . . Because otherwise, you know, it’s just too hard, right? (Laughter)
Katie Martin
You get carted out.
Robert Armstrong
You can’t casually be like, oh Dollar Store sound like an interesting play. No.
Kadhim Shubber
But even if you put in the work, you might still get carted out.
Katie Martin
You might still get (inaudible).
Robert Armstrong
100 per cent. But like, the work is like, even to play the game in a reasonably respectable way, work is table stakes. That’s your ante, right?
Katie Martin
Yeah. If you, listeners, want to play the game, then the full story on this whole sorry affair will be in the FT this weekend. You should check it out. There will be a link in there somewhere that you can put your bets in for this year. Kadhim, hats off to you. You’ve done pretty damn well.
Robert Armstrong
Kadhim is banned from Unhedged forever. It’s been nice having you on the show once. (Laughter).
Katie Martin
Cancelled.
Kadhim Shubber
You’ve got to go for the, you know, the volatility, the big hits.
Robert Armstrong
Fair enough.
Katie Martin
You know, hedge funds, if you’re listening, Kadhim’s right here. He’s amenable to generous offers.
Robert Armstrong
Waiting for your call.
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Katie Martin
Waiting for your call. We’re gonna be back in a sec with, if you can believe it, Long/Short.
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Alrighty. Now it’s time for Long/Short, that part of the show where we go long a thing we love or short a thing we hate. Rob, do you have one ready?
Robert Armstrong
I do have a short and this is a preview of the show we’re gonna do shortly about the new presidential administration. I am short strategic ambiguity. I think that the new administration is gonna keep us guessing about a lot of stuff. And I think in a little while, markets are gonna get pretty tired of strategic ambiguity. They’re gonna wanna know what the actual . . .
Katie Martin
I’m tired already, Rob.
Robert Armstrong
Yeah, they’re gonna wanna know what the actual policies are. So I am thinking there is strategic ambiguity has its place in politics. It can be powerful, but it has a pretty short half-life in markets.
Katie Martin
I am long of ways to look incredibly stupid in a range of media formats. (Laughter) So there’s this podcast, there’s the article coming up this weekend in print and online. I’m thinking maybe we should do like a projection on to the side of the FT’s London headquarters or maybe fly a plane over London with one of those big banners on it saying Katie is a huge idiot.
Robert Armstrong
But it is better in our job, Katie, to be wrong in an interesting way than right in a boring way. I think that’s really true.
Katie Martin
Dammit that’d be uninteresting. If you have any other ideas for me, ways I can look stupid in a public format, please email unhedged@ft.com. Kadhim, hero of the hour, what are you long or short of?
Kadhim Shubber
This is gonna make people think that I’m so incredibly basic but I am long the Gail’s bakery chain. (Katie laughs) And for our non-British listeners, the Gail’s bakery chain is a very expensive kind of fancy bakery and you find it in all the nice areas. And it’s actually a sort of a badge of honour if you have a Gail’s in your area.
Katie Martin
I mean, not to boast, but we just got one in Walthamstow.
Kadhim Shubber
Oh, very good.
Robert Armstrong
Didn’t the last fancy British baking chain like, collapse in an accounting scandal?
Katie Martin
That was a whole other thing.
Kadhim Shubber
That was a whole other thing. This really does have customers (laughter) and it’s amusing how long the queues are and you think, goodness, you’re just buying croissants. Why is there a long queue? And yet you find yourself in that same queue and when you finally get in you think, ah, this is lovely.
Katie Martin
How much is a croissant? (Inaudible)
Kadhim Shubber
It’s so expensive. It’s the most . . . I’ll undoubtedly get it wrong. It’s probably £4 or something like that.
Katie Martin
You should save your money and put your money in your own sodding portfolio, which has done so well.
Robert Armstrong
Seriously. Imagine if you’d done that.
Katie Martin
You’d be a bazillionaire.
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Robert Armstrong
Imagine if you’d foregone Gail’s and bet on yourself instead.
Katie Martin
I’m gonna go and comfort eat some croissants. Let’s wrap it up here. Listeners, we will be back in your ears to talk Trump, Trump, Trump, Trump, Trump on Thursday.
Unhedged is produced by Jake Harper and edited by Bryant Urstadt. Our executive producer is Jacob Goldstein. We had additional help from Topher Forhecz. Cheryl Brumley is the FT’s global head of audio. Special thanks to Laura Clarke, Alastair Mackie, Gretta Cohn and Natalie Sadler.
FT premium subscribers can get the Unhedged newsletter for free. A 30-day free trial is available to everyone else. Just go to ft.com/unhedgedoffer.
I’m Katie Martin. Thanks for listening.
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