Insightful Insights

Whenever I have been asked to nominate the worst industries to invest in, I have always cited car manufacturing and airlines. Car manufacturing is an exercise in labour and capital intensive fashion design, while airlines suffer from being input price takers, are beholden (pun intended) to unionised labour, irrational competition and competitors who can secure their fuel for free. And if a commodity is anything that is purchased purely on price and where brand isn’t a consideration, then airlines are selling a commodity too. continue…

by Roger Montgomery Posted in Airlines, Insightful Insights, Manufacturing.

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You have heard it dozens of times. Soothsayers, market commentators and prognosticators sharing tales of impending doom.

And all sorts of charts and variables are trotted out to explain why, how or when the market will crash.

A particular favourite of ours is what we call the ‘Overlay’. In the Overlay, a chart of the 1987, 2000 or 2007/08 stock market crash is displayed and then a chart of the current market is lined up against the original to demonstrate just how closely the two periods are mimicking each other. The insinuation is that the market will soon crash just as it did all those years ago. continue…

by Roger Montgomery Posted in Insightful Insights.

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Here’s a question for you. Can playing poker be considered investing, or is it necessarily gambling? continue…

by Tim Kelley Posted in Insightful Insights.

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Well, it’s that time of year again. The time I traditionally throw a cat amongst the pigeons to get everyone to think carefully about what they are doing and to question whether they should continue with it next year. This year, I have deliberately fired up the ether with a claim that a particular stream of charting or technical analysis is rubbish… Let’s see whether anyone can conjure up evidence that ‘support’ and ‘resistance’ stands up to the scrutiny of mathematical and statistical evaluation. continue…

by Roger Montgomery Posted in Insightful Insights.

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One of the things that keeps the equity markets interesting is the way different investment attributes fall in and out of fashion. For example, in recent times we have seen a marked preference for large, dividend paying stocks, which we expect is a reflection of record low interest rates, and a quest for better income returns with low perceived risk.

A slightly less obvious development has been a move by the market away from high quality companies and into lower quality issues. continue…

by Tim Kelley Posted in Insightful Insights.

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Christmas is a magical time of the year – a time for the Christian world to celebrate all that is good in mankind. The magic I am referring to is also linked to incredible power bestowed on parents during the month of December. Children that were unruly for the previous eleven months are suddenly transformed into models of good behaviour as they endeavour to stay off Santa’s naughty list. continue…

by Roger Montgomery Posted in Insightful Insights.

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One of our brokers and a producer of some excellent insights into smaller capitalized companies in Australia, Baillieu Holst, recently attracted the skills of analyst Stuart Roberts who has wasted no time releasing a new 37 page report covering the Life Sciences sector. As many private investors rarely have a comprehensive understanding even of the players in this sector, I thought it would very useful to provide you with Baillieu’s summary (with permission) of each of the companies covered. continue…

by Roger Montgomery Posted in Companies, Insightful Insights.

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There’s a very genteel debate going on over at Fairfax – and for once it’s not about what to do with the legacy business.

This time it’s about the relevance of those house auction clearance rates you see being reported and used to reflect the hype (or otherwise) in the property market at the weekend. And what else do we find? Well surprise, surprise, we discover real estate agents are salesmen not actuaries. continue…

by Roger Montgomery Posted in Insightful Insights, Property.

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Over the course of the last month or so we have been witnessing a coalescing of words, sentiment shifts and policy pronouncements that suggest a bubble is about to be engineered by central banks and governments. The idea that we are in a bubble is thus potentially extremely premature. I am personally becoming convinced that, notwithstanding a few bumps along the way, we may see the inflating of a massive stock market rally that may run hard until 2016. The US credit cycle appears to be only mid way through its typical 5-8 years and the likely Fed heir Janet Yellen is making all sorts of pronouncements suggesting the adjective ‘doveish’ used to describe her is an understatement. continue…

by Roger Montgomery Posted in Economics, Insightful Insights.

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Two weeks ago I appeared on ABC The Business with Ticky Fullerton as I do each Tuesday fortnight. The video footage follows below and you will notice that I mention that we could only find four companies in the top 100 that were trading at any discount to intrinsic value. continue…

by Roger Montgomery Posted in Insightful Insights.

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