Economics

Despite the intention of the authorities, Chinese consumption is not growing as fast as GDP. The release of the August 2013 global crude steel output by Worldsteel demonstrates China’s commitment to Fixed Asset Investment. The obsession with expenditure on low yielding fixed assets continues at pace and is one of the reasons the Shanghai Composite Index is currently 64 per cent below its October 2007 record high. continue…

by David Buckland Posted in Economics, Insightful Insights.

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by Roger Montgomery Posted in Economics.

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Mr Andrew Robb was on the front page of the Australian Financial Review on Wednesday as the new minister for Trade and Investment.

Now, I reckon most of us at Montgomery lean a little to the right. We certainly believe business is an important engine of our nation and a very important source of prosperity (if ‘prosperity’ is measured by how much stuff we can afford to buy). Personally, according Vote Compass, I sit squarely in the middle, which might explain why I don’t believe that economists got it right when they decided to use consumption as a proxy for ‘happiness’.

That aside, we know that the LNP is supportive of big business. I mentioned as much on the ABC this week with Ros Childs and Ticky Fullerton. Their logic is simple; big business can employ the most people quickly and make all the economic performance measures such as employment and GDP look good. Sadly this short-term window dressing will ultimately produce an emperor with no clothes. continue…

by Roger Montgomery Posted in Economics, Market commentary.

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by Roger Montgomery Posted in Economics.

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It was a rather gloomy week of economic data releases – total job advertisements in Australia and New Zealand were down by 2 per cent for the month of August, while unemployment rose from 5.7 per cent to 5.8 per cent over the same period. And yet the share price of Seek, Australia’s leading employment classifieds website owner, has risen by 1.7 per cent over the week. That raises the question; why are the rising unemployment headlines not having the same adverse impact on the company’s performance as they once did? continue…

by Ben MacNevin Posted in Companies, Economics, Insightful Insights, Value.able.

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Joe Granville, whose stock market career began in 1957 in the offices of E.F. Hutton and Co., has passed away aged 90. continue…

by Tim Kelley Posted in Economics.

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Ten year bond yields in a number of western world economies have increased by an average 0.7% over the past year continue…

by David Buckland Posted in Economics.

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The US Federal Reserve is using a variety of communications channels to indicate that it may be ready to start winding down the asset-purchasing arm of quantitative easing. continue…

by David Buckland Posted in Economics.

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Back on April 14th, we wrote the following column. Once again, it proved prescient.

Having taken some profits in overstretched retail stocks and having avoided mining services and mining completely (other fund managers have not been so fortunate) The Montgomery [Private] Fund has 45% of its portfolio in cash ready to take advantage of opportunities as they arise. Investors are in the fortunate position of having almost half of the portfolio in the safety of cash.
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by Roger Montgomery Posted in Economics, Insightful Insights.

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Part two of a two part series on the demise of Australia

Last week, we began our ‘Australia on the Precipice’ series and argued that our nation’s future looked bleaker than many were currently anticipating. Since then the stock market has slumped as has the Australian dollar and the RBA capitulated to growing economic headwinds and lowered Australia’s benchmark rate to 2.75%—an all-time low. Keep in mind all of this can turn around in an instant, rendering us completely wrong!
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by Roger Montgomery Posted in Economics, Insightful Insights.

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