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I joined Jess Maguire on ABC Statewide Drive to discuss what rising oil prices and the conflict in the Middle East could mean for markets. We looked at historical data showing that past oil-price peaks have often been followed by weaker share markets, and also explored the growing excitement around SpaceX, including the opportunities and risks for investors considering investing in the company.

Tune in from 1:46:33 here: ABC Statewide Drive Continue…

by Roger Montgomery Posted in Economics, Energy / Resources, Global markets, Market commentary, Radio.

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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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Based on the 2026–27 Federal Budget, the Australian Government expects its comprehensive tax reform package – anchored by changes to Capital Gains Tax (CGT) and negative gearing – to raise just over $40 billion over 10 years. On an annual basis, this averages approximately $4 billion, though revenue will increase from a lower base over time due to the grandfathering and transitional rules built into the legislation.

As an aside, it has triggered widespread condemnation because, despite the changes being so significant, they weren’t taken to an election. Continue…

by Roger Montgomery Posted in Economics, Market commentary.

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I recently read a fascinating Substack explaining why “Champagne Socialism” is now the ultimate luxury belief.

The post implies the ultimate status symbol for today’s elite isn’t a yacht or a luxury watch; it is a loud, performative nod to radical left-leaning politics.

While the term isn’t new, today’s manifestation of the Champagne Socialist is deeply insidious because it’s a dynamic familiar to the Australian Labor Party (ALP) and its socialist/Labor Left factions, yet one that alienates and financially ruins the working class that Labor claims to champion. Continue…

by Roger Montgomery Posted in Market commentary.

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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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I joined Kylie Morris on ABC Newcastle Mornings to discuss the recent increase in market volatility and the shift underway beneath the surface of equity markets. We explored how years of momentum-driven investing and record inflows into index funds have fuelled the outperformance of a handful of large technology stocks, and why that trend may now be reversing. We also discussed the next phase of the artificial intelligence (AI) investment cycle, where investors are becoming more selective about which businesses are likely to benefit, as well as the sharp correction in South Korea’s technology sector as a reminder of the risks that can emerge when markets become concentrated.

Tune in from 33:30 here: ABC Newcastle Mornings Continue…

by Roger Montgomery Posted in Economics, Insightful Insights, Market commentary, Market Valuation, Radio.

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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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A layman’s guide to CrossBorder Capital’s latest financial outlook.

The core problem: A tsunami of government debt

Macroeconomic research house CrossBorder Capital’s Michael Howell recently summarised the dilemma confronting the U.S. Federal Reserve under newly appointed Chair Kevin Warsh.

For most, the use of proprietary indicators and the esoteric interpretations is likely to be skimmed over, but sometimes a bit of additional attention pays dividends. Right now might be one of those junctures.

The U.S. government funds its budget shortfalls by issuing bonds – essentially IOUs to investors. To keep this system running smoothly, two things are required: balance-sheet capacity (the financial ability of large institutions to buy and hold these bonds) and market liquidity (the amount of readily available cash circulating to trade them). Continue…

by Roger Montgomery Posted in Economics, Editor's Pick, Insightful Insights, Investing Education.

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SpaceX has some real businesses, but if I am completely lucid, I’d say there’s no business that would support its US$2 trillion valuation.

While the headlines are made by rockets and SpaceX’s reusable Falcon 9, which has radically changed the economics of sending cargo into orbit, slashing launch costs by 85 per cent to roughly US$2,700 per kilogram, it is Starlink that generated US$11 billion of last year’s US$18 billion in revenue. 

In fact, sending rockets into space doesn’t do a lot for the company’s finances. Indeed, SpaceX generates more revenue from renting out its NVIDIA chips to Anthropic than it does from rockets. Continue…

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

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Bullish investors believe AI is a new, infinite fourth factor of a nation’s production and wealth creation. In the past, we had labour, capital and land as production inputs, all of which were, of course, finite. Land provided the raw materials, labour the muscle and the mind to transform them, and capital was the tool.

Enter AI. The transformative aspect of this fourth ingredient is that, unlike the physical limitations of land or the finite hours of the human workforce, data is a resource that is functionally unlimited. And, importantly, it’s the only factor of production that actually grows more abundant the more we use it.

This article was first published in The Australian on 27 May 2026.

by Roger Montgomery Posted in Editor's Pick, Global markets, In the Press, Insightful Insights, Investing Education, Market commentary, Market Valuation, Popular, Technology & Telecommunications.

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