Market Valuation

I joined Juliette Saly from Ausbiz yesterday to discuss the surge in gold buying and why it may be driven more by fear than logic. With queues forming outside bullion dealers, many investors are chasing gold as a hedge against inflation, currency debasement, or geopolitical risk – reasons that have existed for years. Yet, as prices hit record highs and physical gold carries steep costs and little utility, the rush looks more like Fear Of Missing Out (FOMO) than sound investing. While gold can’t generate income and its vertical price rise seems unsustainable, those still bullish might consider exchange-traded funds (ETFs) over physical bars, which offer lower friction and better financial sense.
Catch the episode on Ausbiz here: Are we paying too much for gold?

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by Roger Montgomery Posted in Market Valuation, TV Appearances.

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Markets sit at elevated levels, fuelled by optimism around artificial intelligence and the promise of lasting productivity gains. Yet beneath the excitement lies a complex mix of valuations, momentum, and risk – raising important questions about how investors can stay positioned if sentiment shifts.

Markets are expensive – observations and implications

There is a conga line of analysts, fund managers and commentators pointing out the extremes many traditional or conventional measures of value have now reached.  From price-to-earnings, price-to-book, and market-cap-to-Gross Domestic Product (GDP) to earnings and dividend yields, the U.S. S&P 500 is in rarified air when it comes to the price investors are willing to pay for exposure to future growth. continue…

by Roger Montgomery Posted in Aura Group, Digital Asset Funds Management, Market commentary, Market Valuation.

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Yesterday on Ausbiz with Juliette Saly, I discussed why record-high markets may carry more risks than opportunities. While the artificial intelligence (AI) boom has powered enthusiasm, I cautioned that valuations across the broader market are now at unprecedented levels, with all companies effectively being priced as winners – something history shows is unsustainable. continue…

by Roger Montgomery Posted in Market commentary, Market Valuation, TV Appearances.

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In this week’s video insight I take a closer look at record stock markets, what’s driving them to new highs, and what that might mean for investors. The S&P 500 is trading at historic levels on measures such as price-to-earnings and price-to-book ratios, with much of the enthusiasm powered by the artificial intelligence (AI) boom. Companies are spending billions on cloud, semiconductors and infrastructure, while revenues are still catching up. It’s an exciting period of innovation, but also one where history reminds us markets often price in future growth well before it materialises. continue…

by Roger Montgomery Posted in Aura Group, Digital Asset Funds Management, Market commentary, Market Valuation, Video Insights.

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The artificial intelligence (AI) arms race shows no signs of slowing, and this week’s fourth quarter results announcement by Google, owned by Alphabet Inc. (NASDAQ:GOOG), suggests that significant investment is still seen as a necessity – especially when it comes to powering the next generation of AI models. Following the release of China’s DeepSeek, the question is not only whether the hefty spending is sustainable, but whether it truly gives U.S. tech giants the edge they’re hoping for? continue…

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

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Kids are regularly disappointed – often vocally – when they don’t receive what they want. When those kids become investors, the tantrums they throw can be seen in market reactions to their disappointments. And many investors, forecasters and commentators are predicting a tantrum amid changing expectations for rate cuts in 2024. continue…

by Roger Montgomery Posted in Economics, Market Valuation.

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Australian Eagle Asset Management, one of Montgomery’s four business partners, launched the Australian Eagle Trust Long Short Fund on 1 July 2016. It is effectively a 150/50 Fund, “long” its best 25-35 stocks with an average weight of around 4.5 per cent, and “short” 12-25 stocks with an average weight of around 2.5 per cent. The Fund is appropriate for investors with a “Very High” risk and return profile. continue…

by David Buckland Posted in Companies, Editor's Pick, Market Valuation, Montgomery News and Updates.

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The price-to-earnings ratios of many quality businesses have fallen sharply over the last six months.  In many cases, the falls were justified.  Now that valuations have dropped, I believe investors have a far better chance of making attractive returns.  The proviso, of course, is that you buy businesses that grow their earnings. continue…

by Roger Montgomery Posted in Economics, Market Valuation.

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Value Investing was developed in the 1920s at Columbia Business School by finance adjunct Benjamin Graham. Roger recently recorded an educational video for investors who want to understand the fundamentals of a quality business and also what might be important in terms of value investing. In this 45-minute fundamental investing 101 session, Roger presents you some of the basic elements of identifying a quality business, finding that quality business at a rational price and how to identify companies with the ability to generate a high rate of return on equity over a long period of time. continue…

by Roger Montgomery Posted in Editor's Pick, Investing Education, Market Valuation.

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The stock market sell off validated an internal decision to abstain from the bubble in the months leading up to January 2020, but it wasn’t the only forecast that came to pass.  We also discussed at length the likely prevalence of deeply-discounted capital raisings by companies needing to shore up balance sheets, to weather the COVID-19 lockdowns or simply be rescued from insolvency. continue…

by Roger Montgomery Posted in Companies, Market Valuation.

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