Insights | What We’re Watching: Review of 2024

What We’re Watching: Review of 2024

December 2024

Tis the season of outlooks and reviews. As we did last year, this month we’ll share some books, podcast and other things that have influenced our team’s thinking during 2024.

Favourite book:

  • Pete Robinson, Head of Investment Strategy: as someone who is fascinated by the emergence of cryptocurrencies and in particular the role of stablecoins, I found Zeke Faux’s “Number Go Up” to be a thoroughly enjoyable and informative read. Since it was published bitcoin is up over 300% and the market capitalisation of tether, the world’s most widely used stablecoin, has a market capitalisation of US$134 billion.
  • Jonathan Kearns, Chief Economist and Head of Regulatory Affairs: As an easy summer read, Andrew Leigh’s latest book “The Shortest History of Economics” is pitched to non-economists. Andrew is a prolific writer who looks at the world with an analytical eye. He’s certainly prolific, this is his tenth book since he’s been the Federal member for the Canberra seat of Fenner. 
  • Linda Mead, Senior Institutional BDM: As is my tradition now, here’s another fun summer read which will transport you to the time of the ancient Greeks and the Trojan War in Madeline Miller’s beautifully written recount of this classic event in “The Song of Achilles”.  And if you’re looking for a stocking stuffer, I would highly recommend Tim Minchin’s “You don’t have to have a dream – advice for the incrementally ambitious”. It’s a great one to keep on your desk to open for a quick cynical fix of gratitude and inspiration about the reality of work and life!
  • Cherie Juwono, Acquistion Finance: I stayed up late into the night reading John Carreyrou’s Bad Blood, which is no small sacrifice with two young kids. It’s an intriguing book about Elizabeth Holmes and the Theranos scandal. A couple of things I learned: (1) question everything, even smart people can get it wrong sometimes, and (2) if it seems too good to be true, it probably is!
  • Kyle Gross, Acquisition Finance: An excellent read was “The World for Sale” by Javier Blas, which provides a front row seat into the world of commodity traders who control the supply of vital resources. The book provides excellent insights into the role these traders play, from shaping economies to operating in warzones and everything in between! Something to think about the next time you fill up your car or turn on your electricity!
  • Dean Fraser, GM, Institutional Customer Servicing:  I suspect I was a bit late to the party on this, but I started the year reading Satyajit Das’ “Traders, Guns & Money”, a book about derivatives which is surprisingly amusing and also somewhat disconcerting.  I’m not normally a fan of biographies but Vince Rugari’s “Angeball” is a must read for any sports fans and for lovers of literature Trent Dalton’s “Lola in the Mirror” is definitely worth your attention whilst lying on a beach or by the pool.  Was it as good as the wonderful “Boy Swallows Universe”?  I’m going to say not quite but that is a book club question for the ages.  I reckon do yourself a favour, read both, and decide for yourself.

Favourite podcast/stream:

  • Michael Bors, Investment Grade Corporate Credit: After overdosing on podcasts related to the US election it was refreshing to get a bigger picture perspective from Stan Druckenmiller being interviewed by Nicolai Tangen (https://podcasts.apple.com/au/podcast/stan-druckenmiller-inside-the-mind-of-a-legendary-investor/id1614211565?i=1000675883446). His macro perspectives have a shelf life well beyond the shorter-term focus of most pundits.  
  • Michael Lee, Acquisition Finance: I’m a big fan of the “My First Million” podcast which tracks new business ideas, start-ups and trends coming out of the US (including some real quirky ones like explaining how a vending machine operation makes money)
  • Pete Robinson, Head of Investment Strategy: my podcast tastes centre around sports, finance and history so it was a pleasant surprise to discover the Goalhanger podcasts this year. I enjoyed the banter on The Rest is Football but found the real highlight to be The Rest of History podcast. Two delightfully British co-hosts imparting their passion for history to listeners. The episodes on the French Revolution were a reminder of the inherent instability of our political systems and that the collective can commit acts which to an individual would be unthinkable.
  • Jonathan Kearns, Chief Economist and Head of Regulatory Affairs: Lives Well Lived is a podcast hosted by Peter Singer & Kasia de Lazari Radek. Peter Singer is an Australian who taught at Princeton for 25 years and has just ‘retired’ to Melbourne. He is often referred to as the “world’s most influential living philosopher” and has driven ‘effective altruism’ and was earlier associated with the birth of the animal rights movement. Each episode is an interview of a significant person on their achievements, what makes them happy and whether they feel they have ‘lived well’. A notable episode was the interview of Nobel Prize winner Danny Kahneman which was recorded just weeks before he died.
  • Dean Fraser, GM, Institutional Customer Servicing:  Like the breakout S-Town podcast of 2017, Ghost Story begins by taking you down one route before branching off in myriad other directions.  Is it a ghost story?  Kind of, but it’s so much more – murder mystery, family drama and ultimately a critique of male privilege, and it all came about due to the most remarkable coincidence involving the narrator.  I also found The Rest is Politics – US compulsory listening in the lead-up to the US election and it remains so as we prepare for The Apprentice in the White House:  Season 2.  Anthony “the Mooch” Scaramucci, who almost boastfully reminds listeners that he lasted as White House Communications Director for eleven days in 2017 before Donald Trump said, “you’re fired”, and accomplished British-American journalist Katty Kay consistently provide revealing and often surprising insights into what goes on on Capitol Hill, often through a Wall Street lens.  And finally, British Scandal is the perfect podcast for a road trip (but maybe make sure the kids have their headphones on).  It’s always entertaining, from Guy Fawkes to the Rolling Stones to the septuagenarian gang who stole 14 million pounds (being English they couldn’t enjoy the benefits of Australia’s superannuation system, so one can hardly blame them).

Favourite X/Twitter/LinkedIn follow:

  • Pete Robinson, Head of Investment Strategy: Rod Dubitsky on LinkedIn. In the lead up to the GFC Rod was head of ABS research at Credit Suisse before moving to PIMCO in 2009. He was one of the voices warning about risks in the subprime mortgage market well before the financial crisis and in recent years has commented extensively on risks within commercial mortgage backed markets (both CMBS and CRE CLOs). With Trepp data showing delinquencies in CMBS structures continuing to increase (in November it increased to over 6%, up almost 2% over the year), his insights are especially relevant.
  • Michael Bors, Investment Grade Corporate Credit: ‘Macro Musing’ by our very our very own Jonathan Kearns of course!

Favourite research:

  • Michael Bors, Investment Grade Corporate Credit: There is a lot of thought-provoking research available to the buyside, but one note that really stood out was Goldman Sachs’ ‘’Global Strategy Paper #71’’ 18 October 2024 by David Kostin and his team. The paper lays out a methodology for forecasting long-term returns from US equities using five variables: valuations, economic fundamentals, interest rates, market concentration and profitability (RoE). A baseline forecast of 3% annualised nominal returns (1% real) for the S&P500 over the next decade is sobering relative to the last decade at 13% and the longer-term average of 11%.
  • Pete Robinson, Head of Investment Strategy: even a couple of years ago, getting quality research on private credit markets was significant hurdle for investors looking at the asset class. Fast forward to today and the depth and quality of data for US private credit is impressive. Fitch Ratings provides excellent work on the US BDC (business development company) sector and I find myself referring to their work quite frequently when looking at how financial metrics such as leverage, interest coverage and profit margins have evolved.
  • Jonathan Kearns, Chief Economist and Head of Regulatory Affairs: Taking the concept of research broadly I’d pitch forProject Syndicate which has opinion articles authored by many leading academic and influential thinkers including multiple Nobel winners. Some articles get picked up by the AFR for their opinion pages, but there are many great reads that don’t.

On behalf of the team, thanks for reading.

Pete Robinson

Head of Investment Strategy – Fixed Income | +61 2 9994 7080 | probinson@challenger.com.au

For further information, please contact: 

Linda Mead

Senior Institutional Business Development Manager | T +612 9994 7867 | M +61 417 675 289 | lmead@challenger.com.au | www.challengerim.com.au

Disclaimer: The information contained in this publication has been prepared solely for solely for the addressee. The information has been prepared on the basis that the Client is a wholesale client within the meaning of the Corporations Act 2001 (Cth), is general in nature and is not intended to constitute advice or a securities recommendation. It should be regarded as general information only rather than advice. Because of that, the Client should, before acting on any such information, consider its appropriateness, having regard to the Client’s objectives, financial situation and needs. Any information provided or conclusions made in this report, whether express or implied, do not take into account the investment objectives, financial situation and particular needs of the Client. Past performance is not a guide to future performance. Neither Fidante Partners Limited ABN 94 002 895 592 AFSL 234 668 (Fidante Partners) nor any other person guarantees the repayment of capital or any particular rate of return of the Client portfolio. Except to the extent prohibited by statute, Fidante Partners or any director, officer, employee or agent of Fidante Partners, do not accept any liability (whether in negligence or otherwise) for any errors or omissions contained in this report.