What’s the conundrum investors face today?
In this week’s video insight, Roger discusses the conundrum investors face today, looking at two parts of the investment equation the economy and prices and other factors.
Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
peter s
:
While watching this video, YouTube recommended me one of your video’s from almost exactly a year ago called ‘The Four Horseman of the Apocalypse: 16 November 2016’ ( https://www.youtube.com/watch?v=vaI9VJCWaNo ). You seem much more upbeat about the Australian economy’s prospects now one year later. Last year you gave us four factors which were showing ominous signs for the Australian economy which were : a housing bubble, excessive debt, current account deficit, and economic growth slowdown. To go through how (as it seems to me) each has changed since last year:
Housing bubble – worse but maybe beginning to deflate
Excessive debt – even more excessive
Current account deficit – smaller but still significantly negative
Economic growth slowdown – now a ‘Goldilocks’ economy ?
Granted If we ignore the terrible retail spending and wage growth numbers, the other economic numbers seem quite good. Is this enough to change your tone on the future of the Australian economy, or does the somewhat dire video of last year still stand ?
Roger Montgomery
:
Hi Peter, Yes currently the economic growth numbers appear to have improved. This may pick up as the RBA suggests or it may deteriorate if the pullback in housing construction is not taken up by resources and infrastructure spending. You may also be interested in Matt Barrie’s dissertation (although we agree with many aspects we don’t agree with all, and in fact, I have today met with those who gave evidence of a much brighter picture for the brain drain issue matt describes)… https://www.linkedin.com/pulse/australias-economy-house-cards-matt-barrie/
peter s
:
Thanks for that article. It was a great read, although I’ll have to add another layer to my tinfoil hat now (I see zerohedge also posted it…). If you say some paint a rosier picture I sure would love to see where, as all I can find in that regard is ‘fluff’ along the lines of the famous ‘our valuation is based on spirituality’ comment.