Market commentary

In a deal announced today, Magellan Financial Group (ASX: MFG) will buy Barrenjoey Investment Bank. For long-term investors, it could provide the opportunity to invest in another ASX-listed investment bank. Could it be the next Macquarie Bank?

Of course, there is a long way to go from Barrenjoey’s $1.6 billion valuation to Macquarie’s $76.3 billion market capitalisation, so this blog is limited to examining today’s deal without commenting on valuation or predicting share prices. continue…

by Roger Montgomery Posted in Market commentary.

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As we have outlined here on the blog many times over the last year, there just doesn’t seem to be enough money in the hands of potential customers to pay for artificial intelligence (AI) tools that would give hyperscalers a decent return on their intended capital expenditure.

The more they spend, the more revenue and profit they must generate to produce a meaningful return on capital. But the more they invest through capital expenditure, the more competition there’ll be between them (lowering prices for their commoditised products) or the greater the level of overcapacity (also lowering prices).

And when you think about the companies in this race, the capital expenditure (capex) is transforming them from cash-generative, capital-light, high-margin businesses whose services have become verbs into capital-heavy, highly indebted businesses. continue…

by Roger Montgomery Posted in Market commentary, Technology & Telecommunications.

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This week I join Nicola and Di for the first 2026 episode of Over The Money Fence. This series aims to help you take control of your finances with clarity and confidence.

In this episode, we take a look at the changes that are currently happening in the world, and how that could impact our finances. I explain how the tailwinds that have benefited the stock markets in the past, and have benefited the Baby Boomers and Gen X are shifting, and why that means investors may need to consider other investments. continue…

by Roger Montgomery Posted in Aura Group, Digital Asset Funds Management, Investing Education, Market commentary, Podcast Channel.

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Rodney Brooks is the Panasonic Professor of Robotics (emeritus) at MIT. For the last eight years, he has been publishing his predictions each year on self-driving cars, electric vehicles (EVs), robotics, artificial intelligence (AI)/machine learning, and human space travel. Each year, Brooks reviews his prior forecasts without fear or favour.  Brooks has promised to review his predictions annually until 2050 (right after his 95th birthday), for a total of 32 years. continue…

by Roger Montgomery Posted in Market commentary.

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Many believe the era of easy investing is over and after several strong years in equity markets, opportunities are harder to find and valuations are less forgiving. So, with traditional 60/40 portfolios under pressure, investors are looking for diversification, income and resilience.

In this exclusive Ausbiz event, I joined Nadine Blayney for an in-depth discussion on equity alternatives and the strategies designed to help protect and grow your wealth.

We explored

• The importance of rebalancing in the current market environment
• How to think about diversification, income and resilience
• How private credit works – and why investors can use it for a reliable income stream
• High-frequency trading and arbitrage funds: historically the domain of proprietary trading firms and institutions, now accessible to investors
• Key risks and what to look for when assessing these types of strategies

continue…

by Roger Montgomery Posted in Aura Group, Digital Asset Funds Management, Investing Education, Market commentary, Popular, TV Appearances.

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U.S. consumer delinquencies jump to highest in almost a decade

As reported by Bloomberg, delinquency rates on loans rose to 4.8 per cent of all outstanding U.S. household debt in the fourth quarter, the highest level since 2017. The rise in defaults was driven by delinquencies in mortgage payments, particularly in lower income zip codes, and student-loan delinquencies. Overall household debt balances climbed 1 per cent from the previous quarter to $18.8 trillion, with the share of credit-card loans at least 90 days delinquent rising to 12.7 per cent. The jobless rate for workers 16 to 24 years old stood at 10.4 per cent in December, near the highest levels since the depths of the pandemic in 2021. continue…

by Roger Montgomery Posted in Global markets, Market commentary.

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The stock market is experiencing a dramatic bifurcation. While traditional sectors surge – energy companies are up over 20 per cent and materials firms 15 per cent – a different story is unfolding in the technology and financial services sectors. Established players are watching their valuations crumble as investors grapple with the answers to a simple question: which companies will survive the artificial intelligence (AI) revolution? continue…

by Roger Montgomery Posted in Market commentary, Technology & Telecommunications.

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Business is like a piano accordion. Sectors and individual companies expand and grow, then contract, necessarily becoming smaller than they once were. If you keep this metaphor in mind when investing, it can help you understand the business’s stage of life. 

There are exceptions, of course – those businesses that rise above the cycle of invention, adoption, scale, saturation, disruption and destruction, but they are few and far between. Most will eventually reach a natural limit to their size, and then they either sit there, churning customers for lower margins, or are disrupted, or their customers move on to the next trend. continue…

by Roger Montgomery Posted in Market commentary.

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Over the weekend, Michael Howell from CrossBorder Capital updated his global liquidity analysis, concluding the sell-off isn’t over for Bitcoin, and elsewhere, accelerating global economic growth will draw liquidity from other asset markets, limiting their upside.

In Bitcoin, while some forecasters eye a rally to $90,000, Howell and the team at CrossBorder Capital have other ideas.

According to Howell, the wind has been knocked out of the sails of the “Everything Bubble”, and if you’re holding out for a vertical move upward, a skid toward $30,000 is the more statistically likely path. continue…

by Roger Montgomery Posted in Market commentary.

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How do you produce a ball of wool? Pull on the thread of a woollen jumper! What was once a fine, handmade piece of clothing can quickly become a jumbled mess on the floor, and all one has to do is pull on the thread.

I wonder whether that’s a fitting metaphor for what’s going on in equity markets right now. continue…

by Roger Montgomery Posted in Market commentary, Technology & Telecommunications.

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