FT Stock Picking: 2025 Winners, Losers, and Investment Lessons
Review of the FT's annual stock-picking competition reveals key market trends, top-performing sectors, and crucial investment lessons for 2025.
Key Insights
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Insight
Precious metal mining stocks, especially silver, offered exceptional returns in 2025, often outperforming directly related but 'higher quality' assets.
Impact
Investors should consider high-beta plays within strong commodity trends for amplified gains, acknowledging increased volatility.
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Insight
Shorting leading tech companies like NVIDIA and Alphabet proved disastrous, while betting against crypto-proxies (MicroStrategy) or speculative ventures (Trump Media) yielded positive results.
Impact
This highlights the significant risk of shorting strong growth narratives and the potential for success in shorting overvalued or fundamentally weak speculative stocks.
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Insight
The computer memory industry (e.g., Micron, Seagate) experienced significant growth (200%+), driven by structural deficits and AI demand.
Impact
Identifying fundamental supply/demand imbalances and new technology drivers can lead to outsized returns in specific sectors.
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Insight
European defense companies had a "storming year" in 2025, a trend investors expect to continue into 2026 alongside European green energy and banks.
Impact
Geopolitical events and policy shifts can create sustained tailwinds for entire sectors, warranting strategic allocation.
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Insight
A 'boring wins' investment strategy, focusing on essential services and stable industries (e.g., drug distribution, waste management), delivered solid returns.
Impact
Investors seeking steady growth and lower risk should consider robust, non-cyclical businesses with predictable cash flows as a core portfolio component.
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Insight
Shorting stocks is inherently difficult due to unlimited downside risk and the market's long-term tendency to rise.
Impact
Prudent investors should approach short selling with extreme caution, strong conviction, and robust risk management strategies.
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Insight
The principle of 'letting your winners run' often proves effective, as strong performance can indicate continued momentum.
Impact
Avoid prematurely selling out of winning positions, as sustained outperformance can often be a reliable indicator of ongoing success.
Key Quotes
"The best way to invest in stocks, honestly, is to buy a big index with a cheap tracker thing and forget all about it for as long as possible."
"if Thing X has a great year, Thing Y, which is a lot like X but is slightly crappier, will have an even better year."
"Just because something's doing well doesn't mean it's going to stop doing well. On the contrary, it increases the chance that it will continue doing well."
Summary
Navigating 2025's Volatile Markets: Key Lessons from the FT Stock Picking Competition
The Financial Times' annual stock picking competition, while a fun exercise, offers a fascinating glimpse into market dynamics and investment psychology. The 2025 results provide valuable insights into which sectors soared, which stumbled, and the underlying themes that drove portfolio performance. For investors looking ahead to 2026, these takeaways are more pertinent than ever.
The Rise of the "Crappier Cousin" and Precious Metals
Perhaps the most striking success story of 2025 was the exceptional performance of precious metal mining stocks, particularly those focused on silver. The competition's top performer achieved over 200% returns by identifying silver as a "high beta play" on gold. This highlighted a curious market phenomenon: "if Thing X has a great year, Thing Y, which is a lot like X but is slightly crappier, will have an even better year." This 'crappier cousin' effect suggests that often, more volatile or less-favored assets within a strong trend can amplify returns.
Tech's Continued Dominance and Memory's Surge
Despite some attempting to bet against them, major tech players like NVIDIA and Alphabet continued their robust performance, punishing those who shorted them. More surprisingly, computer memory companies such as Micron, Seagate, and Western Digital experienced a "bananas year," seeing 200%+ gains. This surge was attributed to a structural deficit in the market coupled with the burgeoning demands of AI, underscoring the importance of identifying fundamental supply-demand imbalances.
Geopolitical Tailwinds: European Defense Takes Flight
A significant win for one participant came from a focused bet on European defense companies like Rheinmetall. Driven by ongoing geopolitical tensions and increased defense spending, these stocks enjoyed a "storming year." This trend is expected to continue into 2026, with investors also showing strong interest in European green energy and banks. This demonstrates how macro-level events can create sustained tailwinds for specific sectors.
The Perils and Potential of Short Selling
The competition also starkly illustrated the risks of short selling. While betting against specific struggling companies like the luxury group Kering or the asset manager GAM proved successful for some, shorting carries unlimited downside risk, as one participant painfully learned by betting against MicroStrategy in a previous year. The fundamental market tendency for "most things [to] go up most of the time" makes short positions inherently challenging.
The "Boring Wins" Strategy
Counter-intuitively, a "boring wins" strategy also yielded positive returns. By selecting stable, essential service providers such as drug distributor McKesson, waste management companies, and aggregate producers like Vulcan Materials, one participant achieved a respectable 23% portfolio gain. This highlights the enduring value of investing in robust, non-cyclical businesses with predictable cash flows.
Conclusion: Discipline and Market Awareness are Key
The 2025 FT Stock Picking Competition reinforced several enduring investment principles: understanding market dynamics (like the high beta play), identifying structural tailwinds (AI, defense), recognizing the inherent risks of shorting, and not underestimating the power of steady, "boring" businesses. While pure luck always plays a role, disciplined research and an acute awareness of broader market and geopolitical trends remain paramount for long-term investment success.
Action Items
Evaluate "high-beta" assets within strong performing sectors to potentially amplify returns, understanding associated risks.
Impact: This strategy could lead to higher portfolio gains by leveraging market momentum, but also exposes the investor to greater volatility.
Research and identify sectors with structural deficits or significant demand driven by emerging technologies like AI.
Impact: Investing in such areas can uncover underappreciated opportunities and capitalize on foundational shifts in the economy, yielding substantial returns.
Monitor geopolitical developments and policy changes, particularly in regions like Europe, for long-term sector-specific investment opportunities in defense, green energy, and banking.
Impact: Aligning investments with macro trends driven by global events can provide sustained tailwinds and enhance portfolio performance.
Consider allocating a portion of the portfolio to 'boring' yet essential industries known for stable earnings and predictable cash flows.
Impact: This can provide a defensive buffer, reduce overall portfolio volatility, and deliver consistent returns even during uncertain market periods.
Exercise extreme caution and thorough due diligence before initiating short positions, acknowledging the unlimited downside and inherent market bias towards growth.
Impact: Mitigating the high risks associated with shorting prevents significant capital losses and protects the overall investment strategy.
Mentioned Companies
Top performer, up 300%+, identified as a 50/50 gold/silver company that benefited from silver's surge.
NVIDIA
4Shorting the stock was a
Alphabet
4Described as a
Micron
4Had a "bananas year" and was "up like 200%+" due to structural deficit in computer memory.
Seagate
4Had a "bananas year" and was "up like 200%+" due to structural deficit in computer memory.
Had a "bananas year" and was "up like 200%+" due to structural deficit in computer memory.
Successful long pick, described as a junior gold company with operating profits that provided good leverage.
Successful long pick alongside Oceana Gold, also a gold stock with profits.
European defense company that had an "absolute crackerjack few years" and "storming year".
McKesson
4A "boring pick" in drug distribution that "did very well" by meeting demand for steady healthcare stocks.
Relatively popular pick in quantum computing that performed well, though not a top-tier winner.
Described as a "totally speculative stock" (SpaceX wannabe) that "worked" despite the picker getting the reasons wrong.
Included in a successful "boring" portfolio, reflecting steady performance in essential services.
An aggregates company included in a successful "boring" portfolio, indicating stable returns.
JPMorgan
3Included in a successful "boring" portfolio, performing "not bad".
Previously a massive winner, but in 2025 "got pretty hosed" and was
Trump Media
-4Mentioned as being
Kering
-4Successfully shorted due to perceived management mistakes and poor performance of its Gucci brand, amid a tough year for luxury.
GAM
-4Successfully shorted, based on its damaged reputation from previous scandals and struggles.