Investing Education
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Understanding value is key to dodging the landmines
Roger Montgomery
August 31, 2015
Reporting season is in full swing and the very large share price reactions following a large proportion of company announcements suggests that the results are surprising and unanticipated. It also might suggest that analyst valuations – those relied upon for the final buy or sell recommendations – might be filled with optimistic inputs or inappropriately formulated. Given the large number of financial types that read this blog, and the number of investors in the banks, it’s worth revisiting the valuation formula. continue…
by Roger Montgomery Posted in Insightful Insights, Investing Education.
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Are you investing or speculating?
Tim Kelley
July 30, 2015
When you last bought a parcel of shares, were you investing or speculating? The term speculation carries some negative connotations, evoking thoughts of risk and recklessness, and is probably not one many of us would want to identify with. It’s a distinction that often arises in financial journalism and marketing, with money managers typically laying claim to the investor label to convey that what they are doing is good, wholesome and professional, and not prone to misadventure. continue…
by Tim Kelley Posted in Insightful Insights, Investing Education.
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Keep it simple…
Russell Muldoon
July 23, 2015
For many investors, the sharemarket seems complicated, daunting and impossible to understand. One day the market is down on fears that interest rates might rise, that Greece will default and leave the Euro zone, or that China is slowing. The next day, it’s up because Greece never defaulted, because is China is slowing and they put in a range of circuit breakers to prevent their stock market from spiralling well and truly out of control.
In our experience, confusion amongst investors exists at least partly because of the human tendency to complicate matters. That, and the fact that many experts being replied upon, simply end up being wrong and the media tend to pile onto a story each and everyday making you think that it’s a bigger deal than it actually is. continue…
by Russell Muldoon Posted in Insightful Insights, Investing Education.
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More on the value of growth
Tim Kelley
July 23, 2015
In an earlier post here, we highlighted the importance of earnings growth to company valuation. The unsurprising conclusion was that a business that is able to maintain steady growth over an extended period of time can accumulate tremendous value.
Today we look at it from another, more quantitative angle, and ask how useful historical growth rates are as an indicator of future investment merit. continue…
by Tim Kelley Posted in Investing Education, Market commentary.
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Understanding the Value of Growth
Tim Kelley
July 6, 2015
In theoretical terms, company valuation is a simple enough concept. The value of any company should equate to the present value of all the dividends that the company will pay over its lifetime. continue…
by Tim Kelley Posted in Insightful Insights, Investing Education.
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Curious about the investment landscape in 2024? It appears that the current market offers a plethora of enticing opportunities for investors, a rarity not experienced since pre-pandemic times. This unique scenario stems from a confluence of factors, including elevated yields and comparatively rational equity valuations.
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The Speed of Change
Ben MacNevin
July 3, 2015
As you may have heard, the Supreme Court of the United States legalised gay marriage last week. Not a line you may expect to start a blog post on investing, but the ruling provides a fascinating insight into how quickly society is changing. continue…
by Ben MacNevin Posted in Insightful Insights, Investing Education, Market commentary.
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Who’s going to be top of the charts this year?
Scott Phillips
June 25, 2015
It’s interesting to look back at the last 22 years of asset class returns and wonder how nice it would have been to be invested in last year’s winning asset class!
by Scott Phillips Posted in Companies, Insightful Insights, Investing Education.
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Hurdle rates
Ben MacNevin
June 25, 2015
There are two parties involved in the allocation of capital both into and within public companies – the investor and the manager. Do your return requirements align with the managers of the companies you’re invested in?
by Ben MacNevin Posted in Investing Education.
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The Buffett effect
Tim Kelley
June 17, 2015
Australian banks have had a good run this week, apparently on the back of some comments made by Warren Buffett in a media briefing relating to Berkshire Hathaway’s investment in Insurance Australia Group (ASX: IAG). continue…
by Tim Kelley Posted in Financial Services, Insightful Insights, Investing Education.
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3 things to look for in corporate capital policy
Scott Shuttleworth
May 20, 2015
As Australians we tend to have a strong attraction to the humble dividend. If our current markets are anything to go by, some investors may have chased yield whilst having thrown caution to the wind. continue…
by Scott Shuttleworth Posted in Investing Education.
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