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.
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The NEW NORMAL from the horse’s mouth.
Roger Montgomery
March 23, 2013
Jeremy Grantham is a Co-founder and Chief Investment Strategist of Grantham Mayo Van Otterloo also known as (GMO). He has 44 years experience and is also the founder of one of the first index funds in the 1970’s. With about US $100 billion in funds under management, he is also the founder of one of the world’s biggest if not the biggest managers.
He is a contrarian and just last week was quoted as saying: “I bought more long-term Treasuries in the last month than I’ve bought in four years. I am a fan of Treasuries now. I wasn’t a fan of Treasuries in July.”He believes in and indeed coined the term, The New Normal – lower rates of growth for the US permanently.
continue…by Roger Montgomery Posted in Economics, Insightful Insights.
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Put not your trust in money, but put your money in trust. -Oliver Wendell Holmes
Roger Montgomery
March 22, 2013
If you have been following the Montgomery story for some years, you will know that here at Montgomery we are focused value investors. If you have been also following the Skaffold journey you will know it is the online investing platform through which anyone can adopt and implement a value investing approach.
It is encouraging then, for all value investors, to observe that the approach we have adopted, and which we try our best to share is working.
continue…by Roger Montgomery Posted in Insightful Insights, Investing Education.
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Cyprus and the proposed “deposit tax”
David Buckland
March 21, 2013
Cyprus’s parliament rejected an unprecedented levy on bank deposits, dealing a blow to European plans to force depositors to shoulder part of the Country’s rescue in a standoff that risks renewed tumult in the Euro area. The deal sought to raise E5.8b by drawing funds from Cyprus bank accounts (known as a deposit tax) in return for E10b in external aid.
Of the 17 countries in the Euro, the Cypress economy with GDP of E16b, ranks number 15, ahead of Estonia (E13b) and Malta (E5b) and accounts for less than 0.2 per cent of the Euro E9.4 trillion economy.
continue…by David Buckland Posted in Economics, Insightful Insights.
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The irrational “Mr Market”
Ben MacNevin
March 20, 2013
Charlie Munger is one the most influential investors in the world today. As a founding partner of Berkshire Hathaway with Warren Buffett, Munger is known for his ability to logically process a number of steps in quick succession by employing about 90 relatively simple mental ‘models’.
You may be interested in the link below – to a speech that Charlie Munger presented and in which he discusses many of these models. The speech is well worth a read if you seek to improve your ability to make logical investment decisions (indeed, many of our blog posts reference these models in some way).
continue…by Ben MacNevin Posted in Companies, Insightful Insights, Investing Education, Market Valuation.
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What is a game changer?
Roger Montgomery
March 20, 2013
Last night I received an unsolicited text message from Vodafone informing that Samsung had just released their Galaxy 4S. Vodafone cooed “it looks like a game changer”. Last week it was Dominos Pizza who insisted that new toppings (toppings others already had) and a square base (competitors already have those too) were ‘game changers’.
The noun Game Changer is being used a little too liberally at the moment, and lest it creep into our vernacular to such a degree that university students use it to describe skipping the train and catching the bus instead, I thought I’d attempt to use photographs to illustrate my understanding of game changers:-
continue…by Roger Montgomery Posted in Consumer discretionary, Insightful Insights, Technology & Telecommunications.
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US Unemployment hits a four year low
David Buckland
March 19, 2013
The number of Americans filing new claims for unemployment benefits declined as the US economy added 236,000 jobs in February 2013. The unemployment rate hit a four year low of 7.7 per cent.
While this is good news some commentators are pointing to two areas of concern. The participation rate, or percentage of the eligible population employed at 63.5 percent, is at a low for the current cycle. Meanwhile 47.7m Americans or 15 percent of the population are recipients of the Food Stamp Program, now known as the Supplemental Nutritional Assistance Program (SNAP). In Fiscal 2012 this came at a cost of US$74.6 billion.
continue…by David Buckland Posted in Economics, Insightful Insights.
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