Insightful Insights
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Seeking better results?
Roger Montgomery
November 27, 2014
SEEK (ASX:SEK) is a top ten holding in both The Montgomery Fund and The Montgomery [Private] Fund so we are pleased to hear, through the company’s latest update, that the business is performing ‘strongly’.
At the AGM today, Chief Executive Andrew Bassat told shareholders to expect guidance for 2015 – outlined in August – to be maintained. continue…
by Roger Montgomery Posted in Companies, Insightful Insights, Technology & Telecommunications.
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The end of “old school” value investing?
Tim Kelley
November 26, 2014
Students of value investing will know that in past times, value investors paid great attention to accounting book values. One of the better-known strategies employed by the spiritual father of value investing, Ben Graham, was to try to acquire companies at market prices that were below their conservatively-estimated liquidation value.
This was not a strategy for the timid – companies that found themselves in this position frequently did go into liquidation. However, a diversified portfolio of companies that fitted this description could do well on average. continue…
by Tim Kelley Posted in Insightful Insights, Intrinsic Value, Investing Education.
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Is Aldi a real threat to Woolworths & Coles?
Russell Muldoon
November 26, 2014
In recent weeks you have probably noticed a dramatic increase in the volatility of Woolworths Limited (ASX:WOW) share price and wondered: what has changed recently? The answer is that something has caused the market to re-think the longer-term prospects of the business.
The detail is found in a very insightful conference call we had recently with the former head of Aldi UK, Paul Foley. continue…
by Russell Muldoon Posted in Companies, Consumer discretionary, Insightful Insights, Investing Education.
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Where is the demand for heavy equipment?
David Buckland
November 24, 2014
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…
by David Buckland Posted in Energy / Resources, Insightful Insights.
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Are China’s austerity measures starting to bite?
David Buckland
November 24, 2014
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.
by David Buckland Posted in Consumer discretionary, Insightful Insights, Investing Education, Value.able.
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Are stocks about to crash?
Roger Montgomery
November 21, 2014
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…
by Roger Montgomery Posted in Insightful Insights, Market Valuation.
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Is Europe on the brink?
Roger Montgomery
November 21, 2014
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…
by Roger Montgomery Posted in Economics, Insightful Insights, Value.able.
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What is happening in the retail sector?
Russell Muldoon
November 20, 2014
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.
by Russell Muldoon Posted in Companies, Consumer discretionary, Insightful Insights, Investing Education.
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How to get value from an hour or so of your time
Roger Montgomery
November 20, 2014
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.
by Roger Montgomery Posted in Insightful Insights, Investing Education, Value.able.
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Expensive Pizza
Tim Kelley
November 19, 2014
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…
by Tim Kelley Posted in Companies, Consumer discretionary, Insightful Insights, Investing Education.
