Market commentary
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Why I’m being fearful during this market euphoria
Roger Montgomery
June 12, 2020
Warren Buffett famously said that, to be a successful investor, you should be fearful when others are greedy, and greedy when others are fearful. I think his advice is especially relevant in today’s ‘risk on’ environment, in which the fear of missing out is usurping the fear of loss. continue…
by Roger Montgomery Posted in Editor's Pick, Market commentary.
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Why this market bounce has got me so perplexed
Roger Montgomery
June 11, 2020
The 11-year bull market in global equities, which COVID-19 finally brought to an end, came to be derided as the most unloved bull market in history. So, what to make of the strong, and similarly disparaged, bounce since March? Many investors look to be pricing in better times ahead, but media headlines are telling a different story. continue…
by Roger Montgomery Posted in Editor's Pick, Global markets, Market commentary.
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Crisis? What crisis? The market says it’s time to buy
Roger Montgomery
June 10, 2020
If you’re scratching your head over the market’s strong rebound since March, then join the club. Because there’s still a large cohort of economists and analysts who continue to see tough times ahead. continue…
by Roger Montgomery Posted in Market commentary.
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How should you think about the prospects for a vaccine?
Tim Kelley
June 9, 2020
Gauging the possible extent and duration of the economic downturn resulting from the COVID-19 crisis is a challenging exercise with many unknowns. However, one thing is reasonably clear: in the event that a safe and effective vaccine becomes widely available, the threat posed by the virus will be much diminished and the path to recovery made far smoother. continue…
by Tim Kelley Posted in Market commentary.
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Beware trojan horses – The impassioned speech of Anastasia Lin
Roger Montgomery
June 5, 2020
It is widely acknowledged that China knew about the Coronavirus outbreak in late 2019 but did not report the outbreak until the virus appeared in Taiwan. And while the tectonic economic and personal cost remains to be counted, what we already conclude is that our attitude to China and its business interests on our shores must change. continue…
by Roger Montgomery Posted in Market commentary.
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A bull at a gate…
Roger Montgomery
June 3, 2020
While US consumer spending, the US economy’s fundamental driver, fell 13.6 per cent in April, and recorded the steepest decline since 1959, the data is now a month old. More recently, the US Institute for Supply Management’s (ISM) Manufacturing Index for May rose to 43.1 from an 11-year low of 41.5 in April, suggesting the economy is rising up off the matt after being KO’d. continue…
by Roger Montgomery Posted in 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.
