Insightful Insights
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The Eurozone… a safe place for deposits?
David Buckland
April 8, 2013
The 40% tax on uninsured deposits exceeding E100,000 within Cyprus’s banking system proves a Euro held in one of the seventeen Euro countries is not the same as a Euro held elsewhere.
by David Buckland Posted in Insightful Insights.
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An offshore Montgomery fund?
Roger Montgomery
April 6, 2013
“There is a tide in the affairs of men, which taken at the flood, leads on to fortune. Omitted, all the voyage of their life is bound in shallows and miseries. On such a full sea are we now afloat. And we must take the current when it serves, or lose our ventures.” William Shakespeare
At Montgomery we have received innumerable requests to launch an offshore fund. The Montgomery Global Fund, for example. This is something we have the capability to do.
by Roger Montgomery Posted in Insightful Insights, Skaffold.
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Trouble brewing? Coal seam gas and the water table (part 2)
David Buckland
April 5, 2013
Earlier this week, the Council of Australian Governments (COAG) Reform Council said that the Commonwealth had now set up the “Independent Expert Scientific Committee on Coal Seam Gas and Large Mining Development” (IESC). This will give governments solid scientific advice on the potential effects of CSG and large mining developments on water resources. In the five years to 2010/11, CSG has increased from 2% to 11% of Australia’s total gas production (read the media release).
continue…by David Buckland Posted in Energy / Resources, Insightful Insights.
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How to become poor
Roger Montgomery
April 4, 2013
Recently I have been ramping up the discussion about a serious fix we need for our business. The business of Australia requires motivated staff, great products and services, and a lid to be kept on costs.
Looking at our balance of payments however, you can see that we are a profligate country, spending more than we earn and selling off assets to pay for it. Keep going and eventually all our assets will be owned by foreigners from whom we will rent the properties, sending our income offshore at an even faster rate.
continue…by Roger Montgomery Posted in Economics, Insightful Insights.
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The RBA Tea Leaves
Roger Montgomery
April 4, 2013
For the 30 seconds before the Reserve Bank’s decision flashes across the RBATCTR page of trader’s Bloomberg terminals, silence descends on dealing room floors around the country. Someone then cries out; “up 25bips” or “no change” and mayhem ensues. As a young graduate in a dealing room it all seems very exciting and front line. But as a more seasoned observer and participant, one does wonder what all the fuss is about.
Investors can do much better investing in ‘businesses’ rather than trying to use interest rate changes as a predictor of stock prices. In any case, once you have predicted correctly whether interest rates will rise or fall, you then have to predict what the reaction will be by investors in each individual stock. And generally it is worth being reminded of the fact that economists have had a mixed track record over the long run at predicting rates in the first place.
continue…by Roger Montgomery Posted in Economics, Insightful Insights.
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Trouble brewing? Coal seam gas and the water table
David Buckland
April 3, 2013
I caught up with a few of my country friends over Easter. One conversation topic that kept coming up was the current approval process for the coal seam gas industry. To say that they are furious about it would be an understatement.
They quoted cases where bore water, which has been running for decades, has suddenly dried up within months of coal seam gas production commencing nearby. So what’s going on?
by David Buckland Posted in Energy / Resources, Insightful Insights.
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Telstra’s Growth Conundrum
Tim Kelley
March 27, 2013
Today’s AFR reports on Telstra’s (TLS) capital investment plans, and states that the man in charge of those investment plans, Brendon Riley, believes that “the answer to the growth question is to keep investing.”
We don’t disagree with this in principal, but note that historically, TLS has not had much success in investing for growth. continue…
by Tim Kelley Posted in Insightful Insights, Technology & Telecommunications.
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Telstra (TLS) vs M2 Telecommunications (MTU)
David Buckland
March 27, 2013
Interviewed by Peter Switzer last Thursday, I was asked why Montgomery doesn’t own any Telstra (ASX: TLS) shares.
Montgomery is a value investor that uses a highly disciplined and fact-based investment process.
We focus on investing in “extraordinary businesses” trading at a discount to their estimated intrinsic value.
by David Buckland Posted in Insightful Insights, Intrinsic Value, Technology & Telecommunications.
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Operating leverage and financial leverage is a No No
David Buckland
March 26, 2013
Shi Zhengrong received his Doctorate from the University of New South Wales’ School of Photovoltaic and Renewable Energy Engineering in 1992 under Professor Martin Green, the “father of photovoltaics”.
After working for Pacific Solar, a university spinoff, Dr Shi returned to China in 2001 to start the solar power company, Suntech.
Suntech Power Holdings Limited listed on the New York Stock Exchange and over the two years to late 2007 its share price climbed from $15 to above $88.
continue…by David Buckland Posted in Companies, Insightful Insights.
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Burying your head in the mineral sand…
Roger Montgomery
March 25, 2013
Last week, The Australian Financial Review’s Angus Grigg and Jamie Feed wrote a neat summary of the growing cries of concerns around China’s economy.
We summarise as follows:
– Dong Tao, Chief Regional Economist at Credit Suisse says there is “no good news to report on China…the Chinese economy is struggling”
– Greg Lilleyman, RIO’s President of Pilbara Iron Ore Operations says “additional exports and a slowing in steel demand growth would hurt the price in tens second half of the year”
– Andy Xie says “This is not good news for Australia” and “the Australian housing market and dollar were vulnerable to slowing growth in CHina, which could fall as low as 5 per cent in coming years”
continue…by Roger Montgomery Posted in Economics, Energy / Resources, Insightful Insights.
