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At last week’s Annual General Meeting, Seven Group Holdings Limited (ASX: SVW), the Kerry Stokes-controlled diversified operating and investment company, revealed there was more pain to come from their WesTrac Australia business.

WesTrac operates as the sole Caterpillar dealership in WA, NSW and the ACT. It supplies and services new and used Caterpillar machinery for the mining, construction and forestry markets. Continue reading


Europe and the Asia-Pacific regions account for the majority of Prada’s revenue, so it was no great surprise when Prada’s same store sales for the July 2014 half-year actually declined by 3 per cent on the previous year.

It is important to note that Chinese consumption accounts for nearly 30 per cent of global luxury goods, and around one-quarter of those purchases are made domestically and three-quarters are made when wealthy Chinese are abroad. The Chinese government’s anti-corruption and austerity measures will see pressure on the luxury goods market for the foreseeable future.

There will likely be a drag on Prada’s earnings from the planned store expansion (around 10 per cent or 60 stores) in the current financial year (to January 2015), the declining store productivity as well as the inventory build.

Another sector vulnerable to the aforementioned Chinese anti-corruption and austerity measures is gaming in Macau, and the October 2014 decline of 23 percent was the biggest year-on-year drop since the Macau government started issuing gaming revenue data in its current form in 2005.



About a year ago GMO’s Jeremy Grantham was very bullish. The S&P500 was around 1,800 points and Grantham made a prediction that in the year or two the market would rally 20 per cent to 30 per cent.

With the S&P now at 2052 and up 14 per cent since his previous bullish call, we thought it would be prudent to read his letter entitled Bubble Watch Update included in the latest quarterly report to GMO investors. Continue reading


We have made much of the turnaround in markets that began with President of the European Central Bank, Mario Draghi’s ‘what ever it takes’ speech. Those famous words have been cited by many – including us – as marking the bottom for financial markets and the beginning of a recovery for Europe.

But former US Treasury Secretary Tim Geithner made some surprising revelations about Draghi, as well as the stupidity of Europe’s elected leaders as they faced their financial crisis, in his memoirs Stress Test: Reflections on Financial Crises. Continue reading


Asset prices are well-up on just a few years ago. No matter which way you cut the data, both the property and share markets have performed strongly.  And so the economic theory goes: that if you feel wealthy, you’ll act wealthy and go out and spend. Exactly what a low interest rate envrionment – the one we are in now – is supposed to encourage.

But unlike past economic cycles, where the wealth effect has translated into the withdrawal of equity to be used on consumption of new furniture or a stereo for example, our listed retailers tell a different picture about the health of the Australian economy.

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