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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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Bruce Greenwald is the Robert Heilbrunn Professor of Finance and Asset Management at Columbia University, a dyed-in-the-wool Graham acolyte and the author of a multitude of books and papers on Value Investing including Value Investing From Graham to Buffett and Beyond.

At the 12th annual Post Keynesian Conference held on September 25th this year at the University of Missouri in Kansas City, Greenwald presented ‘Value Investing and the Mis-measures of Modern Portfolio Theory‘ as the plenary talk.

Instead of spending thousands of dollars learning how to become a “Property Millionaire” overnight, spend an hour or so with Bruce for free. The risk reward payoff is much more attractive.


Domino’s Pizza (ASX:DMP) has been one of the standout success stories on the ASX in recent years. The business has achieved excellent financial metrics with good earnings growth, and shareholders have enjoyed exceptional returns over many years, with a +60 per cent share price gain in the past 12 months alone.

However, while we applaud the management of the business for excellent financial performance over this period, we wonder whether the share market might have pushed Dominos beyond a sensible valuation range. Continue reading