What Are The Best Stocks To Invest In – We asked fund managers across Australia to provide us with the stocks they think are the best on the market. In an effort to simplify, we’ve narrowed the number down to a lucky 7 – 3 global and 4 local names – that these managers would be happy to keep for life.

They say seven is a magic number. To begin with, there are seven days. There are seven deadly sins. And it may surprise some to know that seven is the limit of items or information that a normal person can instantly process and remember, as discovered by psychologists in the late 1950s. And then who can forget the seven dwarves (here’s to you, doctor ).

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We’ve brought together fund managers from far and wide (Australia) to share the number one stocks they’d like to hold for life. These stocks are the best in the business. The bee’s knees, so to speak.

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There are a few global winners that made it through the selection process, including Siemens, Zscaler and IQVIA. But for those who like local favorites, there are four actions that will certainly please your imagination too.

Padley calls Macquarie a “FUFU stock,” meaning a stock that his team would buy and hold “Forever Unless F…s Up.”

“We have a FUFU portfolio that we publish in the Marcus Today newsletter. We just started building it. And the first stock we picked was Macquarie,” he says.

“Macquarie is the first Australian stock that I would say I would be happy to hold for life, although if you know us we would never pretend something is for life in the stock market.”

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So why Macquarie? Padley reveals he actually went for an interview as an institutional equities salesman at Macquarie in the 1990s.

“They didn’t give me the job. I failed the personality test. Not enough of a team player, they said; very aggressive, they said. Thank God, it’s the employees Macquarie rejects that make Macquarie the best. They rejected me. Good decision!” Padley says.

He notes that Macquarie employs more than 16,000 of Australia’s best financial brains with one goal in mind: making money. “Who wouldn’t invest in this?” Padley says.

Furthermore, Macquarie operates within a rather unique banking system. Only four to six commercial banks dominate the country without competition from foreign players.

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“Commercial banks have been left alone by international banks to operate a quasi-cartel that politely divides the essential Australian banking pie, and is so profitable that they haven’t really had to work for their money, innovate or be clever. Just explore,” explains Padley.

“So any intelligent Australian who wants to work in finance has only one option. Work for Macquarie. With obvious results relative to the performance of other banks.”

This lack of competition on both the domestic and international front allows Macquarie to “command a seat” in almost every Australian corporate deal – be it mergers and acquisitions, capital raisings or IPOs.

“In the US, competition among investment banks is fierce. You have a choice. But not in Australia,” says Padley.

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“Outside of investment banking, they are only now discovering that there is an incredible opportunity in traditional banking. Its recent foray into the national mortgage market, the citadel of the big high street banks, has captured market share and undercut its unimaginative competitors.

“I have a Macquarie mortgage. It’s much better to deal with them. They have something unique in my personal banking experience. Something called customer service. There’s nothing they can’t do. Only UBS comes close to challenging them. And they are not Australian.”

Like all stocks (and investments), Macquarie is not a risk-free ride. Padley explains that like other FUFU stocks, you could hold Macquarie forever, but he won’t.

“Macquarie is a high beta stock and the risks are obvious. When financial markets are expanding, they grow, when financial markets are correcting, they correct.”

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Padley isn’t the only investor who has a soft spot for the Australian investment bank’s golden child. Bruce Williams, from Elston, also named Macquarie as his choice for life.

“We find it surprising that over the last 50 years it has grown from a small commercial bank to a large international investment bank, whilst retaining high-quality people, increasing profitability, maintaining a strong balance sheet and still being able to to adapt and grow in new markets ahead of its peers,” he says.

Despite being a market-driven business – meaning it will suffer from volatility in both revenue and profitability – Macquarie has been able to balance this risk through the growth and scale of its annuity-style business, says Williams.

“This diversification allows them to continue to operate well in almost all financial conditions. The proof is that they have been profitable in all years”, he states.

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The foundation of Macquarie’s success has been a series of stellar leaders. Think Allan Moss, Nicholas Moore and now Shemara Wikramanayake. But it is also making progress in developing new market opportunities to maintain its competitive advantage, says Williams.

“Some examples include the focus on leading digitalization in the Australian banking sector, infrastructure development and investment and, more recently, investing for a sustainable future through the development of social infrastructure and renewable energy,” he says.

“Key to this is Macquarie’s ‘loose and tight’ methodology, which empowers your team to seek opportunities, develop expertise, be held accountable for results and reward everyone within a rigorous risk governance framework.”

“Along with a long growth path for Macquarie in the areas listed previously, their business model gives them the flexibility to position the business in new markets as opportunities arise,” he says.

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“Given their solid and proven decision-making and risk management framework, we are confident they have the capabilities to execute this in the near future.”

While Clark notes that a lifetime investment is not the typical time frame an investor would take – even for those who say to always think long term – he says the ability to withstand disruption was key to his selection.

“The main thing I would focus on is what could go wrong for a company and at the top of my list of concerns would be disruption,” he says.

“So many ASX companies, especially in what is traditionally considered the safe or blue-chip area of ​​the market, will have difficult decisions to make over the next decade to ensure the long-term viability of their businesses.”

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“Because of the unique structure of the industry and the scale required, I find it difficult to imagine there being a room in my life,” he says.

“Never say never, but it’s hard to see how this could be stopped by advances in technology. Blood plasma and its various components are the building blocks of life and the key components of many treatments.”

In Clark’s opinion, CSL is the clear market leader in its field. Thanks to the company’s “aggressively reinvesting to continue to build scale and efficiency” mentality, Clark believes this is likely to continue for years to come.

“CSL has been aggressively investing in R&D for many years and has a formidable pipeline of products in various stages of development,” he says.

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“Some will not make it to market, but a future blockbuster drug could definitely be there and new sources of revenue will undoubtedly flow.”

When considering the long term I have set for our resources, Clark adds that company culture is also important to the long-term success of a business.

“I think you need to look at the company culture. Companies that can adapt, identify opportunities and transform to continue growing are the ones you want to support and CSL is a company that has always seemed to me to have a best-in-class culture,” he says.

Liu chose Cochlear, a darling of the Australian market, as his “forever” choice. For those who don’t know, the company manufactures implants to correct profound hearing losses.

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“There are literally millions of people in developed countries alone who could benefit from an implant and this number increases every year as the population ages,” says Liu.

“However, with fewer than 60,000 patients implanted per year, the market is significantly underpenetrated, supporting strong growth for Cochlear for at least the next decade.”

Currently, Cochlear has a market share of more than 60%, says Liu. This is largely due to the fact that their implants are superior to their competitors, both in terms of features and reliability.

“While technological change is a risk, we are not aware of any superior treatments in development, other than some early work that is far from human testing,” she says.

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“Additionally, Cochlear is the most advanced with a fully implantable device, which will likely be the next big development in space.”

As an added bonus, Liu says Cochlear’s management team is world-class and has demonstrated a clear focus on its patients and long-term business growth.

“As a high quality business with structural growth defensive characteristics, the shares are trading at a significant premium to the rest of the ASX companies. However, from a long-term perspective, Cochlear is absolutely a company at the bottom.

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