In my latest article for The Australian, I examine the growing tax burden on Australian businesses and individuals, and the implications for investment, productivity and economic growth. With government revenue and spending continuing to rise, I argue that sustainable prosperity depends on encouraging private enterprise, rewarding innovation and supporting wealth creation, rather than relying on higher taxation and redistribution.

Download the article here: Labor is taxing the goose that lays the golden egg Continue…

by Roger Montgomery Posted in Economics, In the Press.

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A growing chorus of people is asking how or when the artificial intelligence (AI) bubble will burst.

Tech critic and author Ed Zitron pointed out last week that even concerned investors love tossing around statements like “Anthropic has US$413 billion in non-cancellable compute contracts” or that “US$18 billion in Oracle data centre debt is trading at 84 cents on the dollar.” But he notes very few people actually pause to think about what those numbers mean in the real world. Continue…

by Roger Montgomery Posted in Manufacturing, Market commentary, Technology & Telecommunications.

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ASX (ASX:ASX) is a high-quality market infrastructure business with strong competitive advantages across listings, cash equities, derivatives, clearing and settlement and data services. Historically, these businesses generated attractive margins and relatively resilient earnings but the investment case deteriorated as years of underinvestment in technology became increasingly apparent. The most visible failure was the original CHESS (Clearing House Electronic Subregister System) replacement program, which was abandoned in 2022 after significant delays and write-offs, while subsequent operational incidents and regulatory scrutiny further damaged confidence in management and execution. The company also went through considerable leadership turnover with the most recent appointment being ASX’s third CEO in relatively quick succession. Continue…

by Sean Sequeira Posted in Editor's Pick, Feature Article, Financial Services, Market commentary, Market Valuation, Popular, Stocks We Like.

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In my article for The Australian, I explore why global bond yields continue to rise while equity markets remain largely unfazed. From persistent inflation and geopolitical tensions to growing government debt and artificial intelligence (AI) infrastructure spending, several forces are keeping interest rates elevated. I also examine whether expectations of AI-driven earnings growth can continue to support share prices, or whether higher borrowing costs will eventually weigh on equity valuations.

Download the article here: High interest rates and bond yields threaten global sharemarket rally Continue…

by Roger Montgomery Posted in Economics, Editor's Pick, In the Press, Insightful Insights, Market commentary, Market Valuation.

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In the past six years, French Government ten-year bond yield has jumped from negative 0.3 per cent to 4.9 per cent, the highest level in 24 years. Investors are starting to differentiate between each euro-denominated country with German and Dutch ten-year bonds yielding 3.5 per cent and 3.6 per cent, respectively. Meanwhile, Greek and Italian ten-year bonds yield 4.55 per cent and 4.65 per cent, respectively, indicating potential contagion as confidence appears to be in short supply. Continue…

by David Buckland Posted in Economics, Editor's Pick, Feature Article, Global markets, Insightful Insights, Investing Education, Market commentary.

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Independent economic research and investment strategy firm Variant Perception (VP) has shared its latest market musings, and the phrase “generational equity top” got a run.

The equal-weighted Value Line Arithmetic Index is drawing down from its August high, while the Nasdaq 100 is rallying… Continue…

by Roger Montgomery Posted in Editor's Pick, Global markets, Insightful Insights, Market commentary.

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For decades, the 60/40 Balanced Portfolio was zealously and even religiously adhered to. The fixed income component was the dependable anchor, providing a steady yield, protection against stock market volatility, while allowing investors to sleep soundly at night.

More recently, bond returns have given sleeping investors a rude awakening.

U.S. analyst Ben Carlson recently highlighted this shift, pointing out that modern bondholders have endured a catastrophe, describing the market as “…the most brutal bond market in modern finance history,” adding, “It’s no wonder bonds are the most hated asset class in the world.” Continue…

by Roger Montgomery Posted in Economics, Editor's Pick, Feature Article, Global markets, Insightful Insights, Investing Education, Market commentary.

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In the stock market, equity analysts are typically bottom-up researchers. That means they start their analysis of an individual company with specific financial metrics and fundamentals, rather than macroeconomic trends or overall industry outlooks.

Instead of starting with Gross Domestic Product (GDP) growth, interest rates, or sector tailwinds, a bottom-up analyst focuses on a company’s internal strengths, business model, and valuation.

A problem arises because modelling a specific company using the bottom-up approach occurs in a vacuum. 

Analyst A assumes Company A will take market share away from Company B. Analyst B assumes Company B will hold its market share and grow sales by 10 per cent. Analyst C assumes Company C will benefit from lower commodity prices, while Analyst D assumes the commodity producer will raise prices. Continue…

by Roger Montgomery Posted in Economics, Editor's Pick, Energy / Resources, Global markets, Insightful Insights, Market commentary.

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