As banks pull back from business lending, private debt has emerged as a compelling alternative for investors. Offering tailored loans, strong security, and attractive returns, could private debt be the missing piece in your portfolio? Here’s what you need to know.
Disclaimer: All investing entails risk – please read disclaimer on our website for more details.
Are we nearing the peak of the rate cycle, and will 2025 bring much-needed relief? Explore the dynamics of our housing market, wage growth, and global trends in rate cuts and what it all means for you.
Disclaimer: All investing entails risk – please read disclaimer on our website for more details – www.tamim.com.au.
A new year brings new questions, new challenges, and new insights. This week’s TAMIM Reading List kicks off 2025 with a deep dive into AI’s misunderstood market impact and the hidden dangers of “fast-food gambling” preying on young men. Revisit 151 years of S&P 500 returns to uncover historical patterns and explore Oliver Burkeman’s reflections on the imperfect life. We also examine whether private equity-driven fire truck roll-ups worsened L.A.’s wildfires and pull back the curtain on a spymaster sheikh controlling a staggering $1.5 trillion fortune. As we step into 2025, let’s embrace curiosity, critical thinking, and fresh perspectives.
📚 The Real DeepSeek Revelation
📚 How the Quick High of ‘Fast-Food Gambling’ Ensnared Young Men
📚 151 Years of S&P 500 Returns
📚 The Imperfect Life: Oliver Burkeman, author of “4000 Weeks,”
📚 Did a Private Equity Fire Truck Roll-Up Worsen the L.A. Fires?
📚 A Spymaster Sheikh Controls a $1.5 Trillion Fortune
As we enter 2025, the global economy continues to evolve, presenting a mix of challenges and opportunities for investors. While inflationary pressures, geopolitical shifts, and technological advancements shape the financial landscape, they also create avenues for growth across key sectors. Infrastructure, advanced materials, and technology remain at the forefront of economic transformation, offering resilience and potential. Against this backdrop, we highlight three standout companies – CK Hutchison Holdings, Corning Incorporated, and Japan Aviation Electronics that exemplify innovation, diversification, and long-term value. Each presents an attractive opportunity for sophisticated investors looking to enhance their portfolios with a mix of stability and growth.
CK Hutchison Holdings is a Hong Kong-based multinational conglomerate with operations spanning Ports and Related Services, Retail, Infrastructure, and Telecommunications. This strategic diversification provides stable cash flows and exposure to global trade and urban modernisation trends.
The company operates 293 berths across 53 ports in 24 countries, making it a critical player in global trade logistics. Its retail segment includes well-known brands like Watsons and PARKnSHOP, while its infrastructure investments span energy, water, and transportation. Trading at a low price-to-earnings (P/E) ratio of 6.33 and offering a dividend yield of 6.14%, CK Hutchison is undervalued compared to its industrial conglomerate peers. The company’s defensive business segments generate strong cash flows, enabling reinvestment in high-return projects. A prudent debt-to-EBITDA ratio of 5.26 underscores its financial stability.
Recent geopolitical developments suggest a more measured approach to U.S.-China trade relations, reducing the likelihood of extreme tariffs. CK Hutchison’s strategically located port assets stand to benefit from this shift. With its diversified operations, strong fundamentals, and attractive valuation, CK Hutchison offers a compelling investment case for those looking to gain exposure to global trade and infrastructure growth.
Corning is more than just a materials company, it is a technology leader specialising in advanced glass and optical solutions. Its business spans five key segments: Display Technologies, Optical Communications, Specialty Materials, Environmental Technologies, and Life Sciences.
Corning’s products are integral to enabling next-generation technologies, including fiber optics for AI infrastructure and specialty glass for automotive applications. Its Optical Communications segment is particularly strong, fueled by increasing demand for high-speed fiber networks to support AI data centers and 5G rollouts. The Specialty Materials division supplies cutting-edge glass solutions for mobile devices and automotive technologies.
Despite some challenges in its Display Technologies segment, Corning’s FY2024 revenue is expected to exceed $15 billion, supported by growth in optical connectivity and strategic pricing adjustments. The company has also secured funding under the CHIPS Act, reinforcing its role in advanced manufacturing. Trading at a P/E ratio of 22.35 and offering a 2.25% dividend yield, Corning combines income and growth potential. The company’s consistent share buybacks further enhance shareholder value. As markets recognise its critical role in AI, 5G, and next-gen automotive advancements, Corning presents a strong long-term investment opportunity.
Japan Aviation Electronics (JAE) is a leader in high-performance electronic connectors and interface solutions, serving industries such as aerospace, automotive, telecommunications, and factory automation.
JAE’s advanced connector technologies are crucial for industries like EV manufacturing and smart factories. The company’s innovations, including ultra-compact connectors for smartphones and automotive applications, cater to the global trend toward miniaturisation and efficiency. JAE is also active in the aerospace sector, where its motion sensors and fiber optics play a vital role in advanced navigation and stabilisation systems.
Financially, JAE has demonstrated resilience, reporting a return on assets of 4.63% and a return on equity of 7.86% for FY2024. With a manageable debt-to-EBITDA ratio of 1.19, the company is well-positioned for future growth. Trading at a forward P/E ratio of 13.8 and a price-to-book ratio of 1.46, JAE offers an attractive entry point for investors. Its 2.16% dividend yield adds to its appeal, offering both income and growth potential. As industries increasingly adopt advanced electronics, JAE’s expertise positions it as a key enabler of innovation, making it a compelling long-term investment.
The three companies highlighted CK Hutchison Holdings, Corning Incorporated, and Japan Aviation Electronics demonstrate the value of investing in businesses with strong fundamentals, innovative capabilities, and exposure to key global trends. Each operates in sectors poised for sustained growth, making them attractive options for sophisticated investors seeking to diversify their portfolios.
CK Hutchison offers stability and income through its diversified global operations and undervaluation. Corning provides a unique blend of technological leadership and long-term growth in AI and next-gen automotive technologies. JAE delivers cutting-edge solutions for high-growth industries, reinforcing its role as a leader in advanced electronic components.
In an evolving market environment, these companies exemplify how a strategic global investment approach can uncover hidden value and long-term potential. For investors managing their SMSFs or seeking high-conviction investment ideas, these businesses offer a balanced combination of growth, income, and resilience key attributes for success in 2025 and beyond.
At a time when global equity markets have been dominated by one theme, AI, and portfolio risks highly concentrated in Nvidia and its ecosystem, to a dangerous degree, there are many attractive cheaper and technologically advanced companies which are under acknowledged by the stock market. Thai presents a remarkable opportunity for investors who wish to access a diversified portfolio with a resulting lower level of return volatility.
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Disclaimer: CK Hutchison Holdings Limited (SEHK: 1), Corning Incorporated (NYSE: GLW) and Japan Aviation Electronics Industry Ltd. (TSE: 6807) are held in TAMIM Portfolios as at date of article publication. Holdings can change substantially at any given time.
As we close the books on another calendar year, we are pleased to report yet another exceptional year of performance for the TAMIM Australia All Cap portfolio. In CY2024, the portfolio delivered a +28.93% return net of fees, following an impressive +31.25% return in CY2023. Over the past two years, the portfolio has significantly outperformed key benchmarks, with the ASX300 gaining +11.37% and the Small Ords +8.37% in 2024. Meanwhile, in the U.S., the S&P500 gained +23.0%, and the Nasdaq +24.9%, continuing the momentum from the previous year.
Since assuming portfolio management of this strategy on 1 January 2019, the portfolio has annualised +17.73% per annum net of fees, positioning it among the top-performing mid/small-cap funds in Australia over this period*.
One of the dominant themes of 2024 was the continued strength of U.S. equity markets, largely led by the Magnificent 7 tech stocks. The AI revolution is accelerating at a pace comparable to or even exceeding that of the dot-com era. Unlike the late 1990s, where much of the value creation was speculative, AI is delivering tangible benefits in business productivity, automation, and technological advancements. We believe we are transitioning from the AI infrastructure phase to the application layer, where businesses will develop commercial models leveraging AI to enhance operations and drive profitability.
Additionally, we are now two years into the current bull market, which began in early 2023. Historical data suggests that bull markets reaching their second year tend to persist, with an average duration of 5.5 years. Notably, tech-driven and industrial revolutions have sustained bull markets for up to 12 years. We believe AI will be the driving force behind a long-term bull market in the coming years.
As we go to print, Donald Trump has been inaugurated as the 47th president of the United States. His administration is expected to implement pro-business policies that could lead to strong GDP growth and potentially reduce U.S. government debt. Combined with anticipated interest rate cuts, we see a positive backdrop for markets in 2025. Historically, the first year of a new U.S. presidency starts with uncertainty, but market performance tends to accelerate in the second half of the year.
Investors should remain aware that market pullbacks of 5-15% are common even in strong bull markets, presenting attractive buying opportunities.
As we enter 2025, we are highly optimistic about our portfolio holdings and see substantial upside ahead. That said, we remain committed to continuous learning and improvement. One of the key lessons from 2024 was position sizing and knowing when to reduce exposure to stocks that remain undervalued for extended periods. While valuation remains a crucial factor, it is equally important to respect market momentum and avoid swimming against the tide for too long.
Looking ahead, we anticipate a catalyst-rich reporting season in February, followed by an expected increase in M&A activity post-results. Several holdings remain ripe for acquisition, reinforcing our conviction in the current portfolio structure.
Bravura upgraded its FY25 guidance following a successful business transformation and return to profitability. Cash EBITDA is now expected to be in the range of $33m – $36m (previously $28m – $32m), while reported EBITDA has been upgraded to $41m – $44m (previously $36m – $40m). Revenue is anticipated to be between $240m – $245m (previously $235m – $240m). Additionally, BVS intends to resume dividend payments in February 2025, supported by its improved financial performance. Since our initial investment in March 2023, BVS has delivered over 7x returns, and we believe consensus estimates remain conservative. Further upside could come from securing a large registry client for Sonata or a major digital advice contract for Midwinter.
EML Payments unexpectedly announced the termination of its CEO, with Chairman Anthony Hynes stepping in as Executive Chair. While abrupt CEO transitions are typically concerning, Hynes’ strong entrepreneurial background (having sold his company for AU$900m in 2021) makes this a positive development for shareholders. With no debt and a clear path to $95m EBITDA over the next three years, EML is a prime takeover candidate in 2025.
Superloop announced the acquisition of Uecomm Pty Ltd from Optus for $17.5 million, adding 2,000km of high-capacity fibre assets across major Australian cities. This deal strengthens SLC’s network footprint and Smart Communities ambitions, providing long-term cost and revenue synergies. Given the significant asset value compared to the acquisition cost, we see this as a highly opportunistic transaction for Superloop.
The strong outperformance of the fund in 2024, combined with a favourable macroeconomic backdrop, reinforces our conviction that markets remain in a long-term bull cycle. AI continues to reshape industries, and we are entering a crucial phase where commercial applications will drive the next leg of growth.
As we enter 2025, we remain cautiously optimistic, keeping an eye on interest rate cuts, M&A activity, and corporate earnings. Market pullbacks will be inevitable, but they should be viewed as buying opportunities rather than signs of distress.
*According to Morningstar website as of 31 December 2024, Category: Equity Australia Mid/Small Blend.
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Disclaimer: Bravura Solutions (ASX: BVS), EML Payments (ASX: EML), and Superloop (ASX: SLC) are held in TAMIM Portfolios as at date of article publication. Holdings can change substantially at any given time.
