Market commentary
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Barrenjoey issues its economic outlook – and it’s all a bit grim
Roger Montgomery
April 24, 2023
Recently, our small-cap team listened to Barrenjoey Capital’s chief economist, Jo Masters, discuss the prospects for the Australian economy. In brief, Masters forecasts the economy to slow rapidly and unemployment to rise to five per cent, with a recession the most probable outcome. She also foresees persistent inflation, which will force the RBA to hold interest rates at the current level until May 2024. If she’s right, investors are in for interesting times ahead. continue…
by Roger Montgomery Posted in Economics, Market commentary.
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Takeovers take the market stage
Michael Gollagher
April 21, 2023
In my blog post last month, ‘Volatility is the window to opportunity’ I discussed how recent market volatility may represent an opportunity for investors to take advantage of investing in quality long-term assets and distressed assets at significant discounts. Interestingly, it did not take market participants too long to recognise these opportunities and to act on them. continue…
by Michael Gollagher Posted in Companies, Insightful Insights, Market commentary, Takeovers.
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The Reserve Bank of New Zealand wrong foots economists…again
David Buckland
April 5, 2023
One way to reduce inflationary expectations is for the Central Bank to aggressively lift their official cash rate to a level whereby the countries’ consumers are in enormous pain, thereby crunching the economy. And with today’s 0.5 per cent tightening to 5.25 per cent, the 11th since 6 October 2021, that is exactly what the Reserve Bank of New Zealand (RBNZ) had in mind. continue…
by David Buckland Posted in Market commentary.
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Why we should all be concerned about the coming AI revolution
Roger Montgomery
March 31, 2023
Since its launch in November last year, the transformative potential of ChatGPT has stunned the world. After seeing what it can do, Bill Gates said he had just seen the most important advance in technology since the graphical user interface. The trouble is, AI like ChatGPT has the power to obliterate many industries and occupations, and cause massive social dislocation. Little wonder many technologists are warning that it’s time to hit the pause button, before it’s too late. continue…
by Roger Montgomery Posted in Editor's Pick, Market commentary.
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Why it pays to invest when Mr Market is feeling gloomy
Roger Montgomery
March 28, 2023
If you’re needing some encouragement to invest in this anxious market, take a look at historical share returns in the U.S. and Australia. Research going back almost 200 years has found that you have a 71 per cent chance of a positive return in the U.S. in any given year. And your odds are even better in Australia. What’s more, negative years, like we experienced in 2022, are usually followed by a positive one. continue…
by Roger Montgomery Posted in Editor's Pick, Market commentary.
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WHITEPAPER
INTEREST RATES, THE BEST IT GETS. IT’S TIME TO DEPLOY CASH
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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Australia – the outlier with a highly levered consumer
David Buckland
March 27, 2023
Early in 2022, the official cash rates for most English-speaking developed economies were at or around zero. This historical low too often pushed many investors, for fear of missing out, into speculating on things they may now have preferred to avoid. continue…
by David Buckland Posted in Market commentary.
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USA – turning $1 into $70,000 over 123 years – that’s 9.5% p.a.
David Buckland
March 22, 2023
Cantering through the Credit Suisse Returns Yearbook 2023, released about one month ago by the now defunct 166 year old bank, I came across some interesting data I wanted to share with you. continue…
by David Buckland Posted in Market commentary.
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Volatility is the window to opportunity
Michael Gollagher
March 21, 2023
In the past fortnight we have seen the markets swing from a focus on interest rates and inflation, to the prospect of the stability of the Global Financial System post the failure of Silicon Valley and Signature Banks in the U.S. This has also made its way to Europe with turmoil surrounding Credit Suisse, and a subsequent financing package being supplied by the Swiss Central Bank to calm short term nerves around their stability and also a demonstration of Government’s willingness to act. continue…
by Michael Gollagher Posted in Market commentary.
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Cash-strapped borrowers are hammering the housing sector
Roger Montgomery
March 7, 2023
Rising interest rates are already having a major impact on the Australian housing sector. Dwelling approvals are down, an increasing number of off-the-plan buyers are trying to exit their purchases, and furniture and appliance sales are declining. If you’re looking to invest in companies exposed to housing, I’d suggest it’s a case of buyer beware. continue…
by Roger Montgomery Posted in Market commentary, Property.
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P/E multiple movements promote equity market volatility
David Buckland
March 6, 2023
When I joined the financial services industry nearly four decades ago, many high-quality industrial businesses were on a single digit P/E multiple. Interest rates and inflation were extremely high, and an old-timer in the office used to apply a rule that the P/E multiple plus inflationary expectations should approximate 20. continue…
by David Buckland Posted in Market commentary.
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