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The S&P 500 has once again notched fresh record highs, surging more than 13 per cent year-to-date (YTD) and comfortably outpacing its historical average annual return. Driving the rally is a combination of robust earnings, apparently stabilising geopolitical friction, and the relentless build-out of artificial intelligence (AI) infrastructure. Continue…

by Roger Montgomery Posted in Economics, Editor's Pick, Insightful Insights, Market commentary, Market Valuation, Technology & Telecommunications.

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If you’ve been following the technology headlines, you might be confused by two seemingly contradictory statements. The first is that artificial intelligence (AI) is becoming dramatically cheaper to run, and the second is that tech companies are spending more money on AI compute than ever before.

How can we reconcile these statements, and what does the conclusion mean for companies like Pro Medicus (ASX: PME), Xero (ASX: XRO), NEXTDC (ASX: NXT), Megaport (ASX: MP1) and others?

If the unit price of AI is plummeting, shouldn’t the overall costs be going down? And if AI software is taking over the world, shouldn’t every startup building an AI application (App) be printing money?

To help explain the apparent dichotomy, you need to understand a 160-year-old economic concept called Jevons Paradox that’s currently being referenced everywhere and said to be driving the entire AI industry. Continue…

by Roger Montgomery Posted in Companies, Energy / Resources, Insightful Insights, Manufacturing, Market commentary, Market Valuation, Technology & Telecommunications.

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If you follow financial news, like I do, you might have recently heard market commentator Trevor Hall summarise Treasury Secretary Scott Bessent’s latest move in a single eye-opener:

“He’s buying back bonds with 1 per cent interest rates at 50 cents on the dollar and replacing them with short-term debt that currently yields 3 and ¾ per cent.”

It sounds like a paradox. Why would the U.S. government buy back debt that costs them almost nothing (1 per cent interest rates) and swap it for debt that costs almost four times as much (3.75 per cent)? Continue…

by Roger Montgomery Posted in Economics, Global markets, Insightful Insights, Investing Education, Market commentary.

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Despite the utterings from our senior politicians when discussing Australia’s Gross Domestic Product (GDP), this figure takes neither the rate of inflation, nor our population growth into consideration.

When our real GDP per capita for the June 2026 Quarter is released on Wednesday 2 September, I am concerned we will see another negative number, delivering lower living standards for Australians, as experienced over recent years. Continue…

by David Buckland Posted in Companies, Editor's Pick, Market commentary, Market Valuation.

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The Australian Competition and Consumer Commission (ACCC) needs to follow California’s lead and get on this! 

I want to tell you about a product called Kalibrate Fuel Pricing. Kalibrate, the company that provides artificial intelligence (AI) driven fuel pricing and market analytics software, is owned by the private equity firm Hanover Bidco.

Kalibrate Fuel Pricing requests petrol station owners to provide sensitive, non-public data, including historical gas sale costs, volumes, forecasted costs, and margins. Using this private data alongside publicly available information, it offers pricing recommendations for petrol. Kalibrate describes this approach as “competitor-led fuel pricing decisions” and claims to provide “complete visibility on your competitors.”

That all sounds reasonable when thinking about an individual station using the service. Continue…

by Roger Montgomery Posted in Companies, Editor's Pick, Energy / Resources, Market commentary.

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There’s a consistent view of the consumer emerging from Australia’s Financial year 2026 (FY26) retail reporting season.

Households haven’t stopped spending, but they’ve become more selective, more value-conscious and increasingly willing to postpone discretionary purchases or wait for promotions and sales.

The pressure is most evident in big-ticket categories like furniture, appliances, and homewares. Nick Scali (ASX:NCK) noted a significant decline in store traffic late in the year; JB Hi-Fi (ASX:JBH) mentioned that customers are focusing their purchases around major sales; and Temple & Webster (ASX:TPW) said that while browsing continues, customers are delaying their buying decisions. Continue…

by Roger Montgomery Posted in Companies, Consumer discretionary, Economics, Editor's Pick, Manufacturing, Market commentary, Market Valuation.

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Artificial intelligence (AI) has become the market’s biggest investment theme, with strong earnings and seemingly reasonable valuations convincing many investors the rally still has further to run.

But beneath the surface, several warning signs suggest the picture may not be as strong as it appears.

Big claims, bigger questions

Elon Musk says SpaceX’s Total Addressable Market (TAM) in Enterprise AI is US$26.5 trillion. Outside estimates suggest $US50-$300 billion. This leaves the ‘buyers’ and the ‘sellers’ with some important questions. Continue…

by Roger Montgomery Posted in Companies, Market Valuation.

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Recently, a friend recommended John Anderson’s Conversations podcast on Spotify. 

One of the more immediately relevant is Anderson’s interview with former senior Treasury official David Pearl.

Listening, I discovered, beyond the discussion about the energy transition, that Australia’s decline – a decline I believe many are now witnessing and believing – is not fate but the product of bad choices made by the people running our institutions.

David Pearl is a former assistant secretary of the Australian Treasury and now a full-time writer and commentator on economic and cultural policy. He spent some three decades in the federal bureaucracy, with postings to the Organisation for Economic Co-operation and Development (OECD) in the late 1990s and a period as the Treasurer’s representative in the United States, working across taxation, fiscal management and energy policy. He writes regularly for The Australian and The Spectator Australia and appears frequently on Sky News, where he has been among the most persistent critics of Treasury’s modelling of the renewable energy transition. Continue…

by Roger Montgomery Posted in Market commentary.

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There is an old political adage that if you want to understand a government’s true philosophy, don’t look at its speeches, look at its accounts.

Under Labor, Australians have been treated to a masterful exercise in political misdirection. The old ‘bait-and-switch.’

On one hand, the government trumpets marginal, highly structured tax cuts – like the Working Australians Tax Offset (WATO) – to soothe voters battered by cost-of-living pressures. On the other hand, a quieter but more profound structural shift is taking place across the Australian economy.

It may sound extreme and even alarmist, but federal Labor’s economic model is built entirely on a singular, stubborn premise: the wealth generated by the private sector is nothing more than uncollected revenue waiting to be harvested by the state. Continue…

by Roger Montgomery Posted in Economics, Market commentary.

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Jeremy Grantham is considered one of the giants of the investment world. After his start as an economist for Royal Dutch Shell, he earned his MBA from Harvard before co-founding his first asset management firm and helping pioneer commercial indexing strategies in the early 1970s. He subsequently co-founded Grantham, Mayo, & Otterloo (GMO) in Boston, growing it into a global powerhouse managing over US$100 billion. Continue…

by Roger Montgomery Posted in Market commentary.

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