Market commentary
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COVID-19 – A case of not grasping exponential growth
George Hadjia
March 27, 2020
Albert Einstein once said: “compound interest is the eighth wonder of the world”. The following quirky paper-folding example illustrates how compounding can hold unintuitive results, and there are a number of takeaways from this as they relate to the outbreak of COVID-19. continue…
by George Hadjia Posted in Market commentary
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COVID-19 Testing data – Latest Update
Gary Rollo
March 27, 2020
Italy’s major national shutdown and lockdown isolation measures taken on 9 March and March 11, some 14-16 days ago, may now be showing up as lower case numbers. The timeline appears to fit the proposed initial two week quarantine period suggested for potential COVID-19 cases. continue…
by Gary Rollo Posted in Market commentary
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COVID-19 Testing data – Part 3 NSW data update
Gary Rollo
March 25, 2020
In our third update tracking COVID-19 testing data, NSW Health started reporting data on 25 January. The data released regularly reported case epidemiology, with a high trace rate, as well as good data on disease incidence by age cohort. NSW Health also appeared to have started early with a testing plan, and we note that when that testing regime scored a hit, testing volumes jumped, and kept ramping. continue…
by Gary Rollo Posted in Market commentary
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Rain Man and the Australian All Ordinaries Index (Part 2)
David Buckland
March 24, 2020
There have been seven bear markets since the early 1970s. That’s an average of one every seven years. Five of the bear markets, being 1974-75, the early 1980s, the early 1990s, the early 2000s, and the GFC from late 2007 until early 2009, all took approximately eighteen months to play out and all lost approximately 50 per cent from peak to trough. continue…
by David Buckland Posted in Global markets, Market commentary
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COVID-19 Testing data – Part 2 The story for Italy, the UK and US
Gary Rollo
March 24, 2020
We have been tracking COVID-19 testing data, rather than just cases alone and understanding how testing might give us some early insight on the preparedness of governments, and also to the dynamism of their response upon realising that a COVID-19 problem exists. Governments, if prepared, would want to utilise the ability to test as an early warning system first. We looked for consistent testing data and can update you on in Italy (IT), UK, and the US. continue…
by Gary Rollo Posted in Market commentary
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COVID-19 Testing Data – A Montgomery analysis
Gary Rollo
March 24, 2020
Here at Montgomery we have been tracking COVID-19 testing data, rather than just cases alone. Our logic is that testing drives cases, and that case growth would drive markets. So understanding testing might give us some early insight as to the likely preparedness of governments, and also to the dynamism of their response upon realising that a COVID-19 problem exists. continue…
by Gary Rollo Posted in Market commentary
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How should you think about cash?
Tim Kelley
March 23, 2020
One of the biggest questions facing equity investors today is when and how to deploy surplus cash that they may have available. This is a question we have studied extensively in recent weeks, and while we can offer no definitive answers, some tentative conclusions may help to inform this decision. With that in mind, we set out here a summary of key points coming out of our analysis of the COVID-19 pandemic to date, and some thoughts on what might lie ahead. continue…
by Tim Kelley Posted in Market commentary
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The market doesn’t care what price you paid
George Hadjia
March 23, 2020
Recency bias – that is, the tendency to overweight recent events – is a pernicious cognitive bias when investing. Being mindful of the effects of recency bias is the first step to enabling better decision making in the stock market, particularly during periods of heightened volatility. continue…
by George Hadjia Posted in Global markets, Market commentary
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Four criteria we are considering before buying shares in this market
Joseph Kim
March 18, 2020
With the Australian market in freefall, readers and clients alike have asked us where we are looking to invest. While we continue to monitor the fluid situation closely, we have established some key criteria that we would look to satisfy in anticipation of a potential recovery. continue…
by Joseph Kim Posted in Market commentary
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Rain Man and the Australian All Ordinaries Index
David Buckland
March 17, 2020
On the night of the 19 October 1987, the Dow Jones Industrial Average declined 22.6 per cent from 2,246.7 to 1,738.4 points. During the ’87 Crash, the Australian All Ordinaries Index fell from 2,312 points to 1,149 points, a decline from peak to trough of 50 per cent. In hindsight, it was a great buying opportunity. continue…
by David Buckland Posted in Market commentary
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