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Australia is experiencing a population and demographic transformation, with nearly 50 per cent of our population able to claim at least one parent born overseas. George Tharenou of UBS analysed the implications in his recent report entitled “How will a ‘Big Australia’ impact the economy and the ‘intergenerational contract’?” The report dives deep into the effects of Australia’s population boom on the economy, asset prices, productivity, housing, and superannuation. Continue…

by Roger Montgomery Posted in Consumer discretionary, Economics, Editor's Pick.

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In my professional opinion, there’s limited value that can be garnered from historical patterns, especially when those patterns examine the correlation between a single input and its result. Economies and markets are complex adaptive systems, and a myriad of inputs produce the market returns we subsequently experience. Just because something happened five, ten or fifteen times in the past, it is dangerous to conclude it will occur again next time. Continue…

by Roger Montgomery Posted in Economics.

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Warren Buffett once said: “We look for three things when we hire people. We look for intelligence, we look for initiative and we look for integrity. And if they don’t have the latter, the first two will kill you.” Continue…

by Roger Montgomery Posted in Consumer discretionary.

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Over 11,000 Australian companies entered administration in the 2023/ 24 financial year. The bad news continued with a further 3,300 insolvencies in the September 2024 quarter. This is around four times the quarterly average since the business insolvency data was collated (from 1999). However, when we consider the total number of companies registered with the ASIC, the data doesn’t look that bad. 

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by David Buckland Posted in Economics.

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We have written frequently about the powerful and transformational potential of generative artificial intelligence (AI), as well as the risks for investors who mistakenly believe that returns to shareholders will equate to the benefits garnered by consumers and the world generally.  Continue…

by Roger Montgomery Posted in Technology & Telecommunications.

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In this week’s video insight, I discuss the compelling features of the Aura Private Credit Income Fund. The fund has outperformed the stock market with zero volatility, providing a 9.64% compounded annual return over seven years, with no negative months, including during the COVID pandemic. The fund lends to small and medium-sized businesses in Australia, leaving a $400 billion opportunity left by big banks, while offering a diversified loan book and no lock-up period. I also highlight the first-loss structure that provides additional security for investors. Continue…

by Roger Montgomery Posted in Aura Group, Video Insights.

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A portrait of Australia’s biggest issues in eight charts. Why eight? – it’s a lucky number of course!

I have put together a concise snapshot of the complex economic challenges shaping Australia today.

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by Roger Montgomery Posted in Economics, Editor's Pick, Property.

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One of the significant shifts coming from artificial intelligence (AI) is associated with the incredible demand for data centre power. When analysing rack power density, or the power draw of a single, fully populated rack measured in kilowatts (KW), a typical centre without AI demand has a rack power density of 6-12 kilowatts from central processing unit (CPU) based servers. Continue…

by David Buckland Posted in Technology & Telecommunications.

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Famed 20^th-century British author Gilbert Chesterton (1874-1936) once observed, “The poor have sometimes objected to being governed badly. The rich have always objected to being governed at all.” Continue…

by Roger Montgomery Posted in Economics, Editor's Pick.

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Working in derivatives trading back in the early nineties, one of the aphorisms that became a gospel-given truth was, ‘volatility is heightened at turning points’. It has been my experience that volatility clusters around turning points, but perhaps I only remember that because I want to. If big moves also occur in the middle of bull and bear markets, my aphorism becomes the product of selective memory. Continue…

by Roger Montgomery Posted in Economics.

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