Insightful Insights

The world’s financial markets are awash with change, the experts are only guessing and data, when released today, triggers a completely different and unpredictable response to the one triggered by the same data released previously. You are left in the position that John Maynard Keynes described in 1936: “We have reached the third degree where we devote our intelligences to anticipating what average opinion expects the average opinion to be”.

Finding a place of permanence is necessary and that place, for us, is based on a simple principle; that we cannot predict shifting sentiment with any degree of accuracy or consistency.
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by Roger Montgomery Posted in Insightful Insights.

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In his March 2013 Money magazine column, Roger provides his insights into how to determine the true value of a business. Read here.

by Roger Montgomery Posted in In the Press, Insightful Insights, Investing Education, Technology & Telecommunications.

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It is great to see so many of you digging into the half yearly company reports this reporting season. From all of the emails I have received, the one question that keeps popping up has been about the impact of currency on profits and balance sheets. One investor asked more specifically about what it means when a company talks about their results in ‘constant currency terms’.

Let me try to explain some of the impacts and in particular the predilection for some companies to selectively discuss results in “constant currency terms”.
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by Roger Montgomery Posted in Insightful Insights.

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In these highlights from the 27 February edition of ABC1’s ‘Inside Business’, Roger discusses with Alan Kohler the results of companies including BHP, Origin Energy and Qantas.  Watch here.

by Roger Montgomery Posted in Energy / Resources, Insightful Insights, Tourism, TV Appearances, Value.able.

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In his Short Cut column for the Herald Sun published 27 February, Roger highlights how the buoyant share price of GWA Group is not supported by the company’s recent performance.  Read here.

by Roger Montgomery Posted in In the Press, Insightful Insights, Property.

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Following on from the blog of 14 February 2013, I have been asked by a number of readers why I think Capital’s share of output as it all time high, and conversely why “Labour’s share of output has, in recent years, declined from 70% to 64%”.

I think there are three significant factors at work.

1. Globalisation has seen a structural decline in Western World manufacturing. The declining price of manufactured goods, in real terms, has ensured a weak bargaining positioning for labour. In Australia, for example, the Manufacturing Sector as a percentage of all workers has declined from 19% to only 9%, in the past thirty years;

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by David Buckland Posted in Insightful Insights.

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Jennifer Hewitt’s article in last Thursday’s Australian Financial Review entitled “Swapping leaders 101” focused on the relatively sudden departures of RIO’s Tom Albanese and BHP’s Marius Kloppers.  The Sydney Morning Herald claimed “outgoing BHP Billiton Chief Executive will take cash, shares and performance rights worth up to $75.2 million at current prices”.

We believe the timing of the departures was to draw attention away from the substantial erosion in returns and profit, however some discussion about remuneration is warranted.

Andrew Smithers, the author of Valuing Wall Street, makes the following point,

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by David Buckland Posted in Energy / Resources, Insightful Insights.

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In the highlights from this edition of Peter Switzer’s Sky Business program broadcast 21 February 2013, Roger provides his latest insights into Origin Energy (ORG) and BHP (BHP), and also explains how applying his Value.able investment strategy still makes Wesfarmers (WES) a stock that Montgomery Investment Management won’t hold in the near term, despite its price recovery.  Watch here.

by Roger Montgomery Posted in Companies, Consumer discretionary, Energy / Resources, Insightful Insights, TV Appearances.

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The cover of the latest AFR Smart Investor was a worrying sign for me this morning. Emblazoned with the words “Ready, Set, Rally” I was reminded of the cover of a similar magazine many years ago. The older magazine had the words “Takeoff” – or something similar – with a subtitle that read; “how to buy tech stocks without getting burnt”. That magazine was released in March 2000 – a month before the tech wreck began.

Trading the opposite direction to magazine covers has been a profitable pastime for many private and professional investors but should we conclude that this month’s magazine cover means a correction is in the offing?

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by Roger Montgomery Posted in Insightful Insights.

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The Monadelphous Group (MND) is one of Australia’s most successful project management, construction, asset management and maintenance service companies focused on the Resource, Energy and Infrastructure sectors. Revenue, over the five years to June 2013, is forecast to jump from under $1.0 billion to $2.6 billion.

Mona’s interim report, released on Tuesday 19 February, revealed a more sober outlook from Fiscal 2014.

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by David Buckland Posted in Insightful Insights, Market Valuation.

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