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The dawning of a new financial era: The silver lining in rising interest rates
Roger Montgomery
November 3, 2023
There is much debate about whether rates will rise or fall or stay about here for some time – the latter being my personal stance and prediction. Irrespective of our own beliefs, I think we can all agree interest rates aren’t going back to the lows we saw when the U.S. Federal Reserve cut rates to zero, and our own Australian banks benefitted from the Reserve Bank of Australia’s (RBA) term funding facility, which provided three-year funding at 0.1 per cent. Continue…
by Roger Montgomery Posted in Economics, Market commentary.
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Population growth in Australia: Opportunities and challenges ahead
Roger Montgomery
October 12, 2023
Australia, known for its stunning landscapes, unique wildlife, and thriving cities, is experiencing a population boom of historic proportions. As of March 31, 2023, our great southern land is home to 26,473,055 individuals. This remarkable figure represents an astonishing increase of 563,205 people in just one year, marking a growth rate of 2.17 per cent. If this pace continues for another quarter, Australia is poised to set a record for its highest annual population growth, and net overseas migration (NOM) is the driving force. Continue…
by Roger Montgomery Posted in Economics, Market commentary.
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Have investors considered less dynamism in interest rates?
Roger Montgomery
October 5, 2023
I have a great deal of respect for the team that has been assembled at Barrenjoey, and I have every confidence they will add enormous value to investors through their insights and contribution to the ongoing conversation about the economy and markets. Barrenjoey recently penned a note revealing their outlook for economies and markets, and it’s safe to say, it isn’t the consensus view, which makes it particularly compelling reading. Continue…
by Roger Montgomery Posted in Economics, Market commentary, Stocks We Like.
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Ausbiz – Riding the equity market rollercoaster
Sean Sequeira
October 4, 2023
Sean Sequeira, Chief Investment Officer from our investment partner Australian Eagle Asset Management joined Ausbiz to share his insights into current equity markets, highlighting the substantial impact of bond yields on the volatility in markets. Sean shares some top stand-out performers from reporting season including Cochlear (ASX:COH) in healthcare and Altium (ASX:ALU) in technology, both lauded for their long-term potential and growth prospects. He also notes a potential shift in insurance company QBE (ASX:QBE) that could boost returns. Watch the interview: Riding the equity market rollercoaster
by Sean Sequeira Posted in Companies, Editor's Pick, Stocks We Like, TV Appearances.
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The RBA’s battle with inflation: Examining the latest data points
Brett Craig
October 3, 2023
The Australian Bureau of Statistics (ABS) released some important data points last week on the state of inflation and the national accounts. The headline figures did not demonstrate the signs of contraction the Reserve Bank of Australia (RBA) is trying to achieve, however looking into the underlying causes and effects can provide some clarity and sense of optimism. Continue…
by Brett Craig Posted in Aura Group, Market commentary.
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How the Polen Capital Global Small and Mid Cap Fund finds under-explored high quality companies
David Buckland
October 3, 2023
In this video insight, I am joined by Rob Forker, the portfolio manager of the Polen Capital Global Small and Mid Cap Fund. We discuss Polen Capital’s strategy of selecting elite companies from a pool of 8000 global stocks based on their five guide rails. Rob also highlights Polen’s approach to investing across the growth spectrum, balancing slower-growing, stable companies like Cochlear with high-growth firms like Globant. Despite the challenging market conditions, Rob remains confident in their strategy, believing that earnings growth will ultimately drive long-term stock price appreciation. Continue…
by David Buckland Posted in Editor's Pick, Polen Capital, Stocks We Like, Video Insights.
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Retirement planning assumptions and solutions
Roger Montgomery
September 28, 2023
Recently, Morningstar’s director of personal finance, Christine Benz, penned an insightful note explaining some common and dangerous assumptions individuals make when planning for retirement. Continue…
by Roger Montgomery Posted in Investing Education.
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Dear young investor: MINIMISE your contributions to super
Roger Montgomery
September 18, 2023
Back in 2013, I wrote a now infamous article entitled Dear Under 50 Investor. For convenience, I have linked that article at the end of this one. That article made it clear Australians’ superannuation would not be the great source of wealth accumulation for the youth that it once was, and still is, for the older cohort of baby boomers. Continue…
by Roger Montgomery Posted in Editor's Pick, Investing Education.
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Two high-quality stocks we own in The Montgomery Funds’ portfolio
David Buckland
August 18, 2023
In this video insight, David Buckland, CEO of Montgomery, and Sean Sequeira, Chief Investment Officer of Australian Eagle Asset Management, discuss the positive impact of Australian Eagle’s partnership with Montgomery. They delve into recent company earnings reports, highlighting Cochlear’s (ASX:COH) return to growth as indicative of its strong business quality and long-term potential, independent of external factors. They also mention QBE’s (ASX:QBE) efforts to improve margins through enhanced risk management for better earnings quality, potentially leading to a higher market rating. Continue…
by David Buckland Posted in Companies, Editor's Pick, Stocks We Like, Video Insights.
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The great recession that never was. Should we sound the all-clear? No
Roger Montgomery
August 18, 2023
Panic and speculation about a significant economic downturn in the U.S. have been part of financial discourse over the past year. Many analysts and most economists were expecting a recession, a negative shift in the economic tide, and that fear is what prevented many investors from buying equities and missing out on the gains since November. Continue…
by Roger Montgomery Posted in Market commentary.
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Navigating the mortgage cliff: why we’re confident it’s more of a steppingstone than a stumble
Roger Montgomery
August 17, 2023
It was comforting to read CoreLogic’s latest update on the state of the property market in August, which also happens to be the peak month for low fixed-rate mortgages rolling off onto much higher variable rates. Continue…
by Roger Montgomery Posted in Property.
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Navigating the 2023 August reporting season: earnings estimates and market insights
Roger Montgomery
August 2, 2023
In this week’s video insight, Roger Montgomery discusses the August reporting season for 2023. Earnings estimates are uncertain, and the economy’s strength raises concerns due to inflation and higher interest rates. Company fundamentals take centre stage as macroeconomic factors recede. Continue…
by Roger Montgomery Posted in Editor's Pick, Video Insights.
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Unmasking the ‘mortgage cliff’: Are recession fears overblown?
Roger Montgomery
June 26, 2023
With all the talk of recession, we’ve been exploring its probability. As investors, it’s vital to understand which sectors and individual companies are most and least impacted. And helping in that task is appreciating the consumer’s important canary-in-the-coal-mine role. A consumer’s financial position will ultimately determine their propensity to spend on discretionary items and their ability to meet non-discretionary expenses such as utilities and the mortgage, so it is worth understanding each data point. Continue…
by Roger Montgomery Posted in Market commentary.
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Evidence of our predicted retail slowdown is mounting
Roger Montgomery
June 22, 2023
Over the course of the last twelve months, we have warned investors off consumer discretionary stocks, consistent with the positioning of our domestic equity funds and the posture of Brett Craig’s private credit funds, which have also been eschewing extending credit to the sector. Continue…
by Roger Montgomery Posted in Companies, Consumer discretionary.
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Barrenjoey issues its economic outlook – and it’s all a bit grim
Roger Montgomery
April 24, 2023
Recently, our small-cap team listened to Barrenjoey Capital’s chief economist, Jo Masters, discuss the prospects for the Australian economy. In brief, Masters forecasts the economy to slow rapidly and unemployment to rise to five per cent, with a recession the most probable outcome. She also foresees persistent inflation, which will force the RBA to hold interest rates at the current level until May 2024. If she’s right, investors are in for interesting times ahead. Continue…
by Roger Montgomery Posted in Economics, Market commentary.
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A note to young investors part 1: Why you should rethink investing in index funds
Roger Montgomery
April 19, 2023
If you’re a younger investor, you’ve likely heard about – and even possibly invested in – index funds, whose promoters argue it’s easier, cheaper, and wiser to stick to investing in broad benchmarks such as the S&P/ASX100 or 200. Continue…
by Roger Montgomery Posted in Investing Education.
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Woosh! Cochlear’s share price growth just hit 10,000 per cent
Sean Sequeira
April 18, 2023
Cochlear (ASX: COH) – the world leader in the profound hearing loss market – is, in our opinion, one of the highest quality companies on the ASX. Since listing in 1995, its share price has grown from $2.50 to around $250. That’s a rise of almost 10,000 per cent! This meteoric rise reflects the company’s ability to deliver consistent double-digit revenue and earnings growth each year. And with its market still significantly underpenetrated, we believe there are many more good years to come. Continue…
by Sean Sequeira Posted in Companies, Stocks We Like.
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Australia – the outlier with a highly levered consumer
David Buckland
March 27, 2023
Early in 2022, the official cash rates for most English-speaking developed economies were at or around zero. This historical low too often pushed many investors, for fear of missing out, into speculating on things they may now have preferred to avoid. Continue…
by David Buckland Posted in Market commentary.
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This too will pass
Roger Montgomery
March 20, 2023
Market and finance commentators have expended enormous energy writing on the subject of the collapse of Silicon Valley, Signature and Silvergate banks, and the subsequent challenges faced by Credit Suisse. And equally expert commentary will soon speculate about who’ll be next and then about those that subsequently do collapse (First Republic Bank anyone?) Continue…
by Roger Montgomery Posted in Global markets.
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Time to get back to basics
Roger Montgomery
March 8, 2023
In this week’s video insight Roger discusses his views on what long-term investors should be focused on. Roger believes quality growth companies will ultimately return to popularity and when they do watch out. Continue…
by Roger Montgomery Posted in Editor's Pick, Video Insights.
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