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In this final part of my two-part series on General Purpose Technology (GPT) booms, I explain how these cycles typically end. History shows that even world-changing technologies – from cars to commercial flight –  delivered poor outcomes for most early investors. This is because technology trends eventually run into the reality that customers don’t spend money in a straight line (their demand rises and falls), and also the concept of “creative destruction” (wherein new technology leads to the obsolescence of outdated products). These cycles are exactly why it’s important to diversify and regularly rebalance your portfolio. Continue…

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

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As investors, if we’re intellectually honest, we’re bound to be wrong a few times more than we would like. And the longer the investment career, the higher the accumulated mistakes pile up. So how do successful investors survive them and continue to build on their success?

In holiday mode, I was re-reading some vintage Graham and Dodd, and what struck me was how minimal the damage from their mistakes would be, thanks to the safeguards built into their approach. Continue…

by Roger Montgomery Posted in Market commentary.

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For every equity that trades, there is a buyer and seller. Often there are functional reasons for selling, such as paying down a loan, paying tax, distributing an inheritance, or meeting retirement spending needs. Putting those aside, another reason for selling is the harbouring of a negative outlook on the share market in general or the sector or individual stock. But there is also a buyer on the side, who may hold the polar opposite view and outlook.

And if we assume both investors have access to the same information, the difference in outlook can only be attributed to a difference in perception.

Take for example the spending by artificial intelligence (AI) hyperscalers on their infrastructure buildout, estimated to be US$3 trillion by 2029. Continue…

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

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This Christmas, perhaps more than any other in recent years, it might be time to spare a thought for Ernest Hemingway’s short story The Capital of the World. Continue…

by Roger Montgomery Posted in Market commentary.

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I joined Angus Randall and Julia Bergin from ABC The world to discuss why, despite artificial intelligence’s (AI’s) enormous long-term promise, early investors often face the highest risks. History shows that major technology advancements usually go through a boom–bust cycle, which is why caution – not blind optimism – is essential right now.

Catch the segment here: Calls to boost Australian investment in AI. Continue…

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

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Today on Ausbiz I joined Juliette Saly to discuss why artificial intelligence (AI) remains a powerful long-term thematic but is now exhibiting classic bubble warning signs. We need to question whether the exponential share-prices, circular vendor-financing deals, and the huge capital expenditure (CapEx) that we are seeing today, are sustainable.

While AI will undoubtedly transform the world, the economics underpinning today’s spending frenzy look increasingly stretched, with key leaders unable (or unwilling) to explain how trillion-dollar commitments will be funded. In times like these, disciplined rebalancing is a smart approach.

Watch the episode on Ausbiz here: What Nvidia could be telling us about an AI bubble Continue…

by Roger Montgomery Posted in Global markets, Market commentary, TV Appearances.

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I joined Sean Aylmer for Fear and Greed’s Summer Series to discuss whether the powerful rally driven by artificial intelligence (AI) may now be approaching it’s peak. Drawing on lessons from past technology booms, I explained that although investors can correctly predict that a technology (in this case, AI) will change the course of humanity – it doesn’t automatically translate to great investment returns. The issue becomes apparent when a theme is perceived as structural, when in fact it is cyclical. We can see this in AI stocks where valuations have been inflated to a point that cannot be sustained. 

While no one can call the exact timing of an unwind, signs suggest the best part of the run for many AI-linked stocks may be behind us. For investors, perhaps they should consider rebalancing their portfolios after strong equity gains and spread capital more evenly across opportunities beyond the AI theme.

Continue…

by Roger Montgomery Posted in Insightful Insights, Investing Education, Market commentary, Podcast Channel.

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I joined Jess Maguire on ABC Statewide Drive to discuss how Black Friday has evolved from a U.S. curiosity into Australia’s biggest retail event, now eclipsing even Boxing Day. I explained how the surge in discounting can pull Christmas spending forward and boost sales – but how it can also put pressure on retailer margins. I explored how this day can provide useful clues about consumer sentiment, inflation and overall economic activity. We also touched on the risks of shoppers leaning too heavily on credit, the seasonal jobs created by these major sales events, and why the growing list of endless promotions has effectively turned the year into one long discount cycle.

Tune into the episode from 1:42:25 here: ABC Statewide Drive Continue…

by Roger Montgomery Posted in Economics, Radio.

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Today on Ausbiz with Juliette Saly, I explained that while low valuations in 2022 set the stage for strong returns, we’re now at the opposite end of the spectrum, with very high price-to-earning ratios (P/Es), elevated enthusiasm (especially around artificial intelligence) – and growing economic and geopolitical uncertainty, all of which point to lower returns and greater volatility in 2026. We’re also seeing signs of speculative excess in the AI thematic, from soaring private valuations to rising constraints around energy and water that are likely to create speed bumps for the sector.  Continue…

by Roger Montgomery Posted in Market commentary, TV Appearances.

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I joined Jess Maguire on ABC Statewide Drive to reflect on how strong global markets have been over the past three years (particularly in the U.S.) while noting that future returns are likely to be more volatile. I explained that the powerful mix of falling inflation, solid growth, abundant liquidity and enthusiasm around artificial intelligence (AI) that drove markets since late 2022 is now changing, with inflation proving stickier, the jobs market losing momentum and liquidity conditions shifting as we head into 2026. 

Tune in from 1:46:40 here: ABC Statewide Drive Continue…

by Roger Montgomery Posted in Economics, Market commentary, Radio.

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