Editor’s Pick

In September 2015, Howard Marks wrote a memo entitled, ‘It’s Not Easy’, a reflection on Charlie Munger’s famous aphorism about investing, “It’s not supposed to be easy. Anyone who finds it easy is stupid.” The memo reflected upon the requirement for second level thinking in order to be a successful investor. continue…

by Roger Montgomery Posted in Editor's Pick, Financial Services.

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

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Since hitting a high of around $15 in mid-2016, McMillan Shakespeare (ASX: MMS) has fallen to around $11. At this price, and with a demonstrated ability to consistently earn high returns on equity, it seemed like a good candidate for inclusion in our portfolios. So we conducted some due diligence. The outcome is a must-read for all would-be investors. continue…

by Scott Shuttleworth Posted in Companies, Editor's Pick.

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Since early November 2016, owners of Australian bank shares have been heartened to see stock prices rise sharply.  But this could be as good as it gets – at least for a while – and it may be time for shareholders to take some profits and seek out opportunities in over-sold small and midcap companies. continue…

by Roger Montgomery Posted in Companies, Editor's Pick, Financial Services.

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The outlook for Australia’s banks in 2017 is now tougher given the rerating of the stocks the last quarter of 2016. The expectations built into share prices have clearly lifted in 2017.  The big change we expect is a slowing of loan book growth. If interest rates have bottomed, affordability of debt will suffer. Market expectations imply a continuation of the growth rates we’ve seen over the past decade or two, but if the cost of debt stops falling this could act as a drag on loan book growth and the broader economy. Funding costs continue to rise, pressuring net interest margins. Slowing loan book growth is also likely to increase competitive pressure as banks look to gain market share as an offset.

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by Stuart Jackson Posted in Editor's Pick, Financial Services.

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Around the country the apartment oversupply I have previously discussed has started to hit the market and it is already impacting developers and investors. In this video insight I discuss apartment vacancy rates and what happens to the Australian economy when the construction boom ends.

by Roger Montgomery Posted in Editor's Pick, Video Insights.

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Humans are notoriously bad at picking turning points.  We tend to believe the future will look like the recent past.  That’s why so many investors make decisions about the future by looking in the rear view mirror.  However, I believe the best returns over the next few years will come from buying high quality, high growth companies – many of which are now at beaten-down prices.

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

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In this radio program with Philip Clark, Roger discusses the willingness of banks to lend money to property buyers, the number of cranes dedicated to residential building and the strong run of resource companies. Is Australia headed for a financial crisis? And what can we do about it? Listen here.

by Roger Montgomery Posted in Editor's Pick, Radio.

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Our retailers are about to face a whole new challenge. Amazon has announced it will trial a new concept store in the US that uses its ‘Just Walk Out’ technology to change the format of a traditional grocery store by removing cash registers and the check-out process. Customers simply use the Amazon Go app, then take the products they want, and go. It’s set to come to our shores in late 2017. continue…

by Stuart Jackson Posted in Companies, Editor's Pick.

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In this article for Professional Planner, Roger discusses the key ingredients of a property bubble. Read here.

by Roger Montgomery Posted in Editor's Pick, On the Internet.

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