FINDING VALUE (12/2/2013)
Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
Jason Jensen
:
I’m surprised you are calling the market fair value, if I recall correctly you thought the market may have been expensive before Christmas and skaffold seems to be indicating that the market is expensive. Is your current view a function of expected earnings increases?
I find it hard to believe that all the macro risks have suddenly evaporated, and the amount of junk mail I’m receiving from brokers stating “now is the time to buy” worries me, feels to me more like now is the time to sell! But I’ve been wrong plenty of times before…..
Roger Montgomery
:
G’day Jason, We’re talking about the market for high quality companies. Valuations can rise and often change when they give guidance or report better than expected results. A stock can become cheap even though it is rising in price. This happens when the valuation rises further and faster than the price. Hope that helps.
sam
:
Hi Roger,
Last week i saw an ad in the Australian newspaper about you and an article you were doing in the wend Australian. I bought the wend Australian to read it but i couldnt find your article?
Was it there? Do you always write in the wend Aust? If so ill start to buy it.
Many thanks Sam
Roger Montgomery
:
Hi Sam,
Every second Saturday starting this weekend. They made an error Sam. Apologies on their behalf.
Andrew Legget
:
Not surprised by you and your teams findings, shall we call it market neutral, when a market is neither cheap or expensive. It appears we may be in a bit of a tug of war between people who think the economy is recovering and those that think the economy is going to get worse.
There already seems to be a shift in interest rate commentary from predicting how soon the next cut will be to asking whether there will be a cut at all this year.
Previously you have discussed a flow to equities from old cash investors giving up on the low yields on offer, the likely result being an increased equity market.
I think the market is taking the middle ground waiting for a catalyst either way. JB appeared to have put them in a good mood, if more companies come out with relatively positive half year results then we could see the start of another expensive market, however on the flip side, if on aggregate the results are on the negative side than we could get back down to cheap territory.
This is all speculation really as, like you, i cannot predict where markets would go, if i could i wouldn’t be here as i would keep it to myself whilst i watch from afar on a private island.