November 28, 2014
Be sure to watch this video from March 2013 (almost two years ago) and then read on…
It only takes three or four minutes to learn about the forces of supply and demand and their effect on prices. It usually takes an entire semester to explain the forces of supply and demand to a first year university student so consider the few minutes you spend here a value-investing opportunity.
This week our friends at the ABC reported a painful situation in one of Australia’s important industries: “Activity in the resources sector continues to tumble, with a new government report showing investment commitments to major projects are now at the lowest level in more than a decade.” continue…
by Roger Montgomery Posted in Energy / Resources, Insightful Insights, Investing Education, Value.able.
November 24, 2014
Europe and the Asia-Pacific regions account for the majority of Prada’s revenue, so it was no great surprise when Prada’s same store sales for the July 2014 half-year actually declined by 3 per cent on the previous year.
It is important to note that Chinese consumption accounts for nearly 30 per cent of global luxury goods, and around one-quarter of those purchases are made domestically and three-quarters are made when wealthy Chinese are abroad. The Chinese government’s anti-corruption and austerity measures will see pressure on the luxury goods market for the foreseeable future.
There will likely be a drag on Prada’s earnings from the planned store expansion (around 10 per cent or 60 stores) in the current financial year (to January 2015), the declining store productivity as well as the inventory build.
Another sector vulnerable to the aforementioned Chinese anti-corruption and austerity measures is gaming in Macau, and the October 2014 decline of 23 percent was the biggest year-on-year drop since the Macau government started issuing gaming revenue data in its current form in 2005.
by David Buckland Posted in Consumer discretionary, Insightful Insights, Investing Education, Value.able.
November 21, 2014
We have made much of the turnaround in markets that began with President of the European Central Bank, Mario Draghi’s ‘what ever it takes’ speech. Those famous words have been cited by many – including us – as marking the bottom for financial markets and the beginning of a recovery for Europe.
But former US Treasury Secretary Tim Geithner made some surprising revelations about Draghi, as well as the stupidity of Europe’s elected leaders as they faced their financial crisis, in his memoirs Stress Test: Reflections on Financial Crises. continue…
by Roger Montgomery Posted in Economics, Insightful Insights, Value.able.
November 20, 2014
Bruce Greenwald is the Robert Heilbrunn Professor of Finance and Asset Management at Columbia University, a dyed-in-the-wool Graham acolyte and the author of a multitude of books and papers on Value Investing including Value Investing From Graham to Buffett and Beyond.
At the 12th annual Post Keynesian Conference held on September 25th this year at the University of Missouri in Kansas City, Greenwald presented ‘Value Investing and the Mis-measures of Modern Portfolio Theory‘ as the plenary talk.
Instead of spending thousands of dollars learning how to become a “Property Millionaire” overnight, spend an hour or so with Bruce for free. The risk reward payoff is much more attractive.
by Roger Montgomery Posted in Insightful Insights, Investing Education, Value.able.
November 17, 2014
It doesn’t seem that long ago, but the Global Financial Crisis-inspired rout in the stock market began in late 2007 and even though it bottomed in March of 2009, the symptoms that triggered the collapse, are even worse today.
But before you go jumping at shadows keep in mind that while interest rates remain low, the status quo is very likely to be maintained. Indeed low or lower rates could trigger an equity bubble before any correction is experienced. continue…
by Roger Montgomery Posted in Economics, Insightful Insights, Investing Education, Property, Value.able.
November 14, 2014
Firstly, Seek Limited (ASX:SEK) subsidiary Zhaopin Limited (NYSE:ZPIN) received a boost when it reported 3Q14 revenue growth of 32 per cent year-on-year (YOY); and EBITDA growth of 34 per cent YOY.
We will be investigating why the unaudited result was so strong given the company had been growing at around 11 per cent YOY; and Zhaopin’s key competitor, JOBS, reported 3Q14 revenue growth of just 13 per cent YOY. The result, which was reported under A-IFRS (Australian Accounting standards), will differ to the results prepared under GAAP for its US listing. continue…
November 5, 2014
Some times you just wake up with a clear view of our current condition. I think my friend Chris Joye, a columnist for the The Australian Financial Review and a director at YBR Funds Management, might be feeling a little like Neo did in the movie The Matrix, when he woke up to see reality for the first time.
In his article today, Why Capitalism Is Not Doing Its Job, Chris makes the observation:
“There is absolutely a role for governments to vouchsafe a minimum level of liquidity when markets temporarily shut tight in crises. I argued this in March 2008 apropos the securitisation market, which the government ended up (very) profitably supporting with $15 billion. continue…
by Roger Montgomery Posted in Financial Services, Insightful Insights, Value.able.
November 5, 2014
I sat next to David Murray AO, Chairman of the Financial Services Inquiry (FSI), at a breakfast meeting yesterday and I understand his final report is scheduled for presentation to Treasurer Hockey before the end of the month.
David is a quiet and very thoughtful guy and with a chuckle he said, “I have been trying to leak the recommendations of the FSI but no one seems to be listening”. continue…
by David Buckland Posted in Companies, Financial Services, Insightful Insights, Value.able.
November 4, 2014
For those of you looking for some relief from the trails and tribulations of investing; we had to laugh when we read this excerpt from the transcript of a conference call between analysts and Cliffs Natural Resources Chairman, President and Chief Executive Officer Lourenço Gonçalves. Cliffs Natural Resources Inc. is a higher-cost iron ore producer in North America.
There’s no question about the humorous value in this dialogue. However, the question that remains is whether analysts are less likely to put a negative rating on a stock following such interactions. continue…
by Roger Montgomery Posted in Insightful Insights, Value.able.