Market commentary
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The market is a Kugel sphere, ready to plunge back to Earth
Roger Montgomery
May 27, 2020
Have you ever seen a Kugel Fountain? It’s a water sculpture crowned by a large stone sphere held up by the pressure of the water rising beneath it. A bit like the situation we see today, with stock market being the sphere, supported by a steady flow of central bank money. And therein lies the problem: turn off the water and the sphere plunges to Earth. continue…
by Roger Montgomery Posted in Market commentary.
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Why I don’t expect a V-shaped recovery
Roger Montgomery
May 26, 2020
The massive dislocations caused by the coronavirus pandemic are having only a temporary impact on stock markets, which are pricing in a V-shaped income, earnings and economic recovery. But is this optimism warranted? Or will we continue to see businesses negatively impacted for some time to come? continue…
by Roger Montgomery Posted in Market commentary.
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Baby got back
Roger Montgomery
May 25, 2020
I recently discussed the fantasy world that some seem to be living in believing that a recovery will be easy and quick rather than slow and halting. We are in a recession and recessions rarely last six months, and finally, employment prospects in hospitality, retail and construction have deteriorated to such an extent that there will be fewer jobs for people to come back to when their jobseeker payments return to ‘normal’ and Jobkeeper payments cease later this year. continue…
by Roger Montgomery Posted in Editor's Pick, Market commentary.
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Rainbows, Unicorns, V-Shaped recoveries and other fantasies
Roger Montgomery
May 22, 2020
There are a bunch of reasons to expect this recovery to be longer and more painful than the market’s V-shaped expectations. Of course, within such an environment there will be businesses that do well, and we reckon we own a whole bunch of them in The Montgomery Fund and the Montgomery Small Companies Fund. continue…
by Roger Montgomery Posted in Editor's Pick, Market commentary.
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Is the early release of superannuation a good idea?
Andreas Lundberg
May 20, 2020
One of the actions announced by the government to stimulate the economy as a response to the current crisis is that individuals can apply for an early release of superannuation savings. The rules are that an individual can apply to withdraw $10,000 before the 30 June and another $10,000 between the beginning of July and the end of September. continue…
by Andreas Lundberg Posted in Market commentary.
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Old Habits don’t die hard, they don’t die
Roger Montgomery
May 14, 2020
During the depths of the market’s reaction to the Coronavirus outbreak I listened in on company and journalist conference calls and held multiple webinars and Microsoft Teams sessions with clients, planners and brokers. Quite often I heard comments along the lines of, “this will change the way we live, work and travel forever”. I am adamant in my belief that humans will revert right back to the way they have always done things, as soon as it safe (or permitted, whichever comes first) to do so. continue…
by Roger Montgomery Posted in Editor's Pick, Market commentary.
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Is it time to switch to optimism?
Roger Montgomery
May 7, 2020
After a few tough months, Australia is starting to come out of hibernation, and investors are looking ahead – as reflected in our rebounding sharemarket. But they’ll need to be selective in their stock selections, because some businesses will do far better than others in our post-lockdown world. continue…
by Roger Montgomery Posted in Market commentary.
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Are you taking a longer-term view?
David Buckland
May 7, 2020
Currently, the US S&P 500 stands at 2,870 points, down 15 per cent from its February 2020 peak. (Meanwhile, the Australian All Ordinaries Index at 5,450 points is 25 per cent below its peak). On most fundamentals, markets have justified high valuations on the back of historically low interest rates. continue…
by David Buckland Posted in Global markets, Market commentary.
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Is this a FOMO rally?
Scott Phillips
May 6, 2020
A lot has been written about the COVID-19 crisis and undoubtedly it will go down in history as a monumental market crash, and so far it has been one of the quickest technical “bear” markets on record, with the S&P 500 hitting its high on 19 February 2020 and into a bear market just 16 days later. continue…
by Scott Phillips Posted in Market commentary.
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Popular Analysis that has no value
Roger Montgomery
May 5, 2020
In this video insight Roger discusses stock market analogs and attempting to predict what the market is going to do in the future. How effective are such analogs? Not very, because the companies that make up the market are impacted differently and because interest rates, government and central bank settings, labour and productivity are all dissimilar and the drivers of markets will cause a different reaction. continue…
by Roger Montgomery Posted in Market commentary, Video Insights.
