James Abela: The high-stakes search for Quality

Investors are currently navigating a world defined by five formidable factors: high inflation, the AI revolution, consumer fragility, heavy regulation, and geopolitical uncertainty. While the market's gaze is fixed on the horizon, the ground beneath quality stocks has shifted, delivering the toughest period of performance since the lead-up to the GFC. But as the saying goes, “it’s always darkest before dawn.” In this episode of The Rules of Investing, James Abela explains why it is critical to have a process for navigating challenging markets, and highlights the bright spots, both globally and on the ASX, that are presenting a breadth of opportunities in small and mid-cap companies. Time Codes 0:00 - Introduction 3:05 - Themes across global and local markets 6:15 - The inflation and confidence headwind 8:50 - Defining a Quality stock 10:30 - Why Quality stocks have been struggling 15:35 - Tips for investing through difficult times 19:22 - A 30% exposure to picks & shovels AI exposure 22:48 - A recent portfolio addition: Lumuentum (NASDAQ:LITE) 26:40 - Bright spots on the ASX 32:05 - Top ideas in mid-cap miners on the ASX 32:53 - Why James remains cautious on growth stocks on the ASX 35:28 - Lessons from missing the Afterpay growth story 42:35 - What investors are missing in markets right now 45:00 - A business well positioned to endure the next 5 years