Interest Rates (White Paper)
Roger provides his insights on Interest Rates in this final White Paper for 2012.
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.
colin.burnett.5
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Hi Roger,
Thank you for all of the great insights throughout the year. I have been a follower of yours for over 12 months now.
Merry Christmas!
Peter Sullivan
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Hi Roger,
I started share trading some 20 odd years ago,mainly for an interest.I tried to follow William D Gann,Ben Graham,Darryl Guppy and the Like.Whilst I had some successes, I realalised I was Gambling not investing.So I started getting interested in Warren Buffett & tried to understand his method of investing, but having bought many books about Buffett I never quite understood how he did it.Since then I came across a Dr John Price who studied Warren Buffett carefully and has had a lot of success investing, so I have been following him for anumber of years. Although he is an Australian academic,I found he had an American way of explaining things which I found difficult to follow and I think something was missing.
Then I came across you,1st on TV then in articles in the Australian and after studying you for a while, I thought this guy is explaining the Buffett method in a way that I can understand. I bought your book VALUE-ABLE which is now my investing Bible and joined Skaffold and am now looking foreward to investing in the new year.
Thanks for your help so far, and I wish You and your family a Happy Christmas and a healthy and prosperous New Year.
Roger Montgomery
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Thank you for that endorsement Peter. I sincerely hope that you will apply your investing education with a great deal of patience and always ensure you completely understand the business before buying a single share. Always seek and take personal professional advice if anything is unclear.
Ian
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Already subscribed but will not let me in.
g randall hicks
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Hi I have recently joined skaffold I mentioned that i joined because i listen to any of your sessions and respect your thoughts I Thank you and wish yourself staff and families MERRY CHRISTMAS
Roger Montgomery
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Thank you and very best wishes to you!
Andrew Legget
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Thanks Roger, i really have enjoyed the white papers relesed over the year. Firstly, merry christmas to you and everyone on your team both at the fund, the blog and skaffold hope you all have a good and profitable new year.
I completley agree with your thoughts Roger, whether the economy is performing well or not performing well, the need to focus on finding quality companies and buying them for less than they are valued for is still the way to go.
In bad times, great companies will usually fair better than their less stellar competitors and when they come out of this negative cycle (which they will do at some point) then they will usually come out of it in a stronger position than what they went in with.
As someone who spends a lot of time looking at investing related items, has there been any indication of a general uptick in volumes on the stock exchange?
My feeling is with interest rates so low, less attractive rates on fixed interest, term deposit etc investments as a result and inflation taking up a pretty hefty chunk of whatever rate of return you get on these cash investments, and a general sluggishness from what ic an see in the housing market there is little incentive to invest in these asset classes and instead in my opinion, stocks seems like the only asset class that perhaps has a return high enough to justify the investing of ones cash.
It is still not clear how much if any flow on previous cuts by the RBA have had although your point on the elasticity of interest rates is a good one. If you aren’t willing to borrow or spend when the cash rate is at 3.25%,
I think until the general population de-leverage themselves or until their is a lot more job certainty going around than we will see very little uptick in economic activity and aggregate demad as people are very pessimistic and fearful it seems. If you work in the public service then you would likely feel very uncertain about your future with almost every government trying to reign in spending and costs, mining investment is apparently starting to decline so less jobs here it seems, retail has been sluggish and poor performing for a while. Banks are seeing little growth at the top line which i think is a general indicator of what is happening in the economy.
One area i am interested in looking into is the education sector as in times of general economic uncertainty and rising unemployment then the opportunity cost of foregoing work and going into education reduces quite a bit. Seek seems to tick this box pretty well.
Either way, it seems we will continue to be living in interesting times. The world will keep spinning, the sun will come up and quality businesses will still be better investments than non=quality businesses. We can make things really complex or stick to a formula that has been shown to work over booms and busts.
Interesting thoughts as always Roger. Once again, merry christmas to you and everyone involved whether it be the team behind it or my fellow commentors.
Roger Montgomery
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And a very very happy Christmas to you too Andrew. In particular than you for your support. It has not gone unnoticed.