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I know everyone is focused on Iran and oil at the moment, but when the conflict eventually ends, investors will cheer…and return to the themes that previously dominated markets.

And that theme is artificial intelligence (AI).

At Montgomery, we have always preached that, in the long run, share prices follow a simple trajectory: the present value of future cash flows or the ‘intrinsic value’ of a stock. We have long advocated investors look for “great” businesses with high returns on incremental invested capital and durable competitive advantages.

From time to time, however, the market enters a period of “narrative-driven” exuberance where the arithmetic is ignored in favour of a grand story. A theme. Continue…

by Roger Montgomery Posted in Market commentary, Market Valuation, Technology & Telecommunications.

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While investors look to the next Nvidia earnings call or the latest OpenELM (Open-source Efficient Language Models) release to predict the future of artificial intelligence (AI), Michael Burry – made famous for making billions shorting markets ahead of 2008 subprime crisis – recently turned to an article entitled Thought without Language, The Narrative of a Deaf-Mute, His First Thoughts and Experiences, in the June 19, 1880, edition of the New York Times.

“The case study is of a teacher at the Columbia Institute for the Instruction of the Deaf and Dumb. This particular teacher, Melville Ballard, is also a deaf mute and a graduate of the National Deaf Mute College.” Continue…

by Roger Montgomery Posted in Market commentary, Technology & Telecommunications.

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Many believe the era of easy investing is over and after several strong years in equity markets, opportunities are harder to find and valuations are less forgiving. So, with traditional 60/40 portfolios under pressure, investors are looking for diversification, income and resilience.

In this exclusive Ausbiz event, I joined Nadine Blayney for an in-depth discussion on equity alternatives and the strategies designed to help protect and grow your wealth.

We explored

• The importance of rebalancing in the current market environment
• How to think about diversification, income and resilience
• How private credit works – and why investors can use it for a reliable income stream
• High-frequency trading and arbitrage funds: historically the domain of proprietary trading firms and institutions, now accessible to investors
• Key risks and what to look for when assessing these types of strategies

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by Roger Montgomery Posted in Aura Group, Digital Asset Funds Management, Investing Education, Market commentary, Popular, TV Appearances.

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I joined Sean Aylmer for Fear and Greed’s Summer Series to discuss whether the powerful rally driven by artificial intelligence (AI) may now be approaching it’s peak. Drawing on lessons from past technology booms, I explained that although investors can correctly predict that a technology (in this case, AI) will change the course of humanity – it doesn’t automatically translate to great investment returns. The issue becomes apparent when a theme is perceived as structural, when in fact it is cyclical. We can see this in AI stocks where valuations have been inflated to a point that cannot be sustained. 

While no one can call the exact timing of an unwind, signs suggest the best part of the run for many AI-linked stocks may be behind us. For investors, perhaps they should consider rebalancing their portfolios after strong equity gains and spread capital more evenly across opportunities beyond the AI theme.

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by Roger Montgomery Posted in Insightful Insights, Investing Education, Market commentary, Podcast Channel.

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In my latest article for Nabtrade, I explore why investors are rarely able to identify a bubble until after it has burst, and why the signals today suggest it may be prudent to prepare for a shift in 2026. Diversification and rebalancing is becoming increasingly important as market conditions become more turbulent. 

You can read the full article here: Bubbles create a shadow – time to move out from the shade. Continue…

by Roger Montgomery Posted in On the Internet.

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I joined Phil Clark on Nightlife to explain why the market’s sharp fall may reflect growing doubts about the artificial intelligence (AI) boom. I argued that while AI is a powerful General Purpose Technology (GPT) that may change the world (like cars or the internet), it might not be as lucrative as investors hope. Today we’re seeing super-charged share prices, huge data-centre spending, complex vendor-financing deals and big losses at firms like OpenAI. Whether this proves a correction or a bust is unknowable, so my message to investors was simple: regularly rebalance and diversify beyond the AI winners.

Tune into the full episode from 4:49 here: ABC Nightlife Finance 

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by Roger Montgomery Posted in Market commentary, Market Valuation, Radio, Technology & Telecommunications.

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Not only are stock market valuations stretched, but on the metrics that are most reliable for predicting future returns, the U.S. market is at an all-time high. We can say that factually and therefore categorically.  It’s not a matter of opinion. 

It’s worth remembering to bring everything back to the data to avoid the influence of emotions. 

The important question then is not whether reducing your exposure and rebalancing portfolios results in a missed opportunity to maximise gains, but whether you’ll regret not doing that, and instead of retiring in two years, being forced to work for another six or seven. Indeed, and upon reflection, there will always be regret; the decision is about which regret is worse. Letting gains evaporate might be worse than missing out on a few more dollars.

This article was first published in The Australian on 05 November 2025. Continue…

by Roger Montgomery Posted in Aura Group, Digital Asset Funds Management, Global markets, In the Press, Market commentary.

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Wall Street’s S&P 500 dropped more than one per cent last week, and the tech-heavy Nasdaq fell three per cent. It’s really nothing in the scheme of things. That’s because the Nasdaq 100 is up more than 130 per cent in three years, and the S&P 500 is more than eighty-five per cent higher since October 2022. Nevertheless, last week’s turn-down was the worst week for the Nasdaq in seven months. What the index price declines perhaps don’t reflect, however, is a much sharper shift in the market’s risk appetite. Continue…

by Roger Montgomery Posted in Editor's Pick, Market commentary.

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In U.S. trading overnight, Nvidia achieved a market capitalisation of US$5 trillion, after which Microsoft, Meta Platforms and Google’s parent company Alphabet delivered their September quarter earnings.

The results were impressive, as expected. Microsoft reported Q1 revenue of US$77.67 billion, beating estimates of US$75.33 billion, with earnings per share (EPS) of US$4.13, surpassing the US$3.67 forecast. Continue…

by Roger Montgomery Posted in Market commentary.

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During a boom, warnings of bubbles and crashes are swept under a rug woven with proclamations such as “we’ve entered a multi-year bull market” and “there’s so much money on the sidelines waiting to invest”.

This article was first published in The Australian on 06 October 2025. Continue…

by Roger Montgomery Posted in In the Press, Insightful Insights, Market commentary.

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Last week, The Wall Street Journal (WSJ) published a piece commenting on the artificial intelligence (AI) infrastructure frenzy. As an investor, one can’t help but be awestruck while also feeling concern and a more than a hint of déjà vu.

According to the WSJ, Ellendale, North Dakota, is a sleepy town of just 1,100 now playing host to a half-built AI data centre that’s will be larger than 10 Home Depots – the U.S. equivalent of a large format Bunnings Warehouse here in Australia. Continue…

by Roger Montgomery Posted in Editor's Pick, Global markets, Market commentary, Technology & Telecommunications.

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In this week’s video insight I explore signs that today’s bull market may be showing signs of a bubble. The bulls point to two key observations supporting the markets’s strength. First, market breadth is widening – with more stocks joining the rally. And second, earnings momentum is improving with over 80 per cent of U.S. companies seeing positive earnings revisions. 

While these observations appear supportive on the surface, they can also be read as signs of a maturing bull market edging towards a bubble. Continue…

by Roger Montgomery Posted in Video Insights.

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I joined David Taylor on ABC The Business to discuss signs that the market might be entering bubble territory.  

Sharemarkets continue to climb, driven by fear of missing out (FOMO), expectations of interest rate cuts, and easing global tensions. But these same forces are also evidence that this boom could be shifting into the early stages of a bubble. Continue…

by Roger Montgomery Posted in TV Appearances.

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For the last month or two, I have been writing with increasing frequency about the possibility of the stock market boom transitioning into a bubble. There are a variety of reasons for this, and they usually fall under two broad headings. The first is technical and the second is behavioural. Often the latter influences the former, but the reverse can also be true, so let’s agree that the sets in the Venn diagram intersect. Continue…

by Roger Montgomery Posted in Market commentary.

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There’s some early evidence the equity boom is entering a bubble phase.

Bubbles can last and keep inflating for a long time. Missing out can be costly, but predicting the exact moment of a bubble’s demise is a waste of time. So, the right strategy isn’t prediction but rebalancing and a little tactical asset allocation. That way, you can remain invested and still outperform, if only relatively, even if markets pull back.

This article was first published in The Australian on 05 August 2025. Continue…

by Roger Montgomery Posted in In the Press, Market commentary.

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Financial markets are riding a wave of bullish enthusiasm, with stocks, cryptocurrencies, and other speculative assets soaring to new heights. Fueled by optimism around cooling inflation, robust corporate earnings, and the transformative potential of artificial intelligence (AI), the rally has pushed valuations to levels some are saying is reminiscent of the 1999/2000 dot-com era. Continue…

by Roger Montgomery Posted in Market commentary.

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In this week’s video insight, I explore whether we’re in the midst of a genuine market boom – or drifting into bubble territory. While strong earnings, high margins, and a pause in rate hikes have fuelled the rally, valuations are stretching well beyond historical norms. Continue…

by Roger Montgomery Posted in Video Insights.

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With apologies to William Shakespeare, signs of a bit of froth and frenzy have begun to be acknowledged in markets this last week. As we have previously noted, liquidity is the fuel for such episodes, and as long as liquidity remains abundant, we should expect more, rather than less, evidence of irrationality. Continue…

by Roger Montgomery Posted in Market commentary.

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You gotta love it when a party ends and the lights come on. Blinking and adjusting to the bright lights, you begin to see clearly that which was previously blurry and obscured. 

One of the most repeated mistakes equities investors make is the assumption that their poster-child industry leader will always remain so. Nobody ever seems to assume that competitors will emerge and take a significant share from the first mover. That failure leads to sky-high price-to-earning (P/E) ratios and unrealistic pricing. Continue…

by Roger Montgomery Posted in Companies, Technology & Telecommunications.

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by Roger Montgomery Posted in Podcast Channel.

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