Great table and love the explanations in the comments section.
Cracking note Tim, thanks for taking the time to put this together. Worth a read...
Thanks all for the feedback on this interview. Nick does a great job at sharing his views and is definitely passionate about growth companies. I love the concept of trying to identify what the long term growth opportunities are. Getting his perspectives helped me to step back from the day to day grind and think about some of the big changes taking place.
Cheers Josh, our team are looking into it and I reckon they're a good chance of getting this sorted. Thanks for letting us know - have a great weekend.
Nice article Tom, some great features in there and a big tip of the hat to our awesome product and development team.
Thanks Frank - Nick does a great job of explaining the concept of structural growth.
Hi All, thanks for your comments and sorry it has taken a while to respond (I was on leave). We have more interviews with talented and impressive women from the investment industry scheduled for the months ahead including one in a few weeks time with Catherine Allfrey from Wavestone. Warren H - we usually do provide a transcript but they take a while to turnaround and the first draft always requires a review. I'll get one up this week. We also released the interview as a podcast with the links above. I always appreciate hearing your comments, so thanks again for taking the time to respond. James
I'm a fan of lesson #2 - "provide value to others" - nice wrap Pat.
Hi folks, thanks for the feedback on Livewire and it is great to hear that the resource delivers some value for our readers. I also appreciate you sharing your own investing experiences - we're all different and can all learn as we go. Safe investing.
Good point Ian - I've also heard similar arguments about who retirees manage their property and the merits of downsizing as requirements change.
Mark, stocks outside the top 100 are considered part of the small cap index.
Hi Matt, yes I'm sure we can do that. I'll get it sorted on Monday.
HI Daniel, sorry we didn't get to your question. From the discussion I would suggest the guests would have suggested some more diversification and that relying on just a single security is quite risky.
Thanks Giovanni, appreciate the feedback and we value our regular readers on Livewire. Have a great day.
For Livewire readers keen to learn about different fund managers and their investment strategies I can highly recommend this podcast. It has been on my play list for a while now. David has access to some very interesting guests and does a great job in presenting new information in an easy to access way. You'll get access to new ideas and I always learn something from the guests. One of the best Aussie investment podcasts for confident and informed investors.
Good article Rog, really enjoyed this and some mind boggling numbers.
Thanks for the feedback Brad, glad you found it enjoyable.
A very timely piece of analysis, thoroughly enjoyed this.
Good piece on alternatives
Good article Damien, I agree that it feels like risks are being kicked down the road.
On Property painkillers -
Hi Chris, we are doing corporate bonds. It will fall under the 'investment grade' category.
Hi FC, it's the first time we've done something like this so I hope it will be popular. The idea is to try and address an issue that our readers are grappling with. We will certainly be open to feedback and I hope plenty of our readers will use the webinar as a chance to ask questions about their own investing challenges.
A great explanation of the rarely discussed realities of investing.
Bit of fun!
Mt T, I think this is a pretty fair point it probably never comes into question when the LIC or LIT is trading at or above NTA but when there are extended periods of underperformance + deep discounts you can see where the problem arises. There will always be an argument about letting the investment manager invest through a cycle and not capitulating at the worst time.
Very useful article, thanks for sharing
Hi Des, keep in mind that the score takes into account correctly calling a Hold as well as the Buy and Sell calls. This means that the price is exactly the same 12 months later, virtually impossible to nail.
Thanks Kevin for the feedback, I know it was a bit longer than usual but I thought Philipp had plenty of interesting things to say.
Mr T - the one liner award is a great idea. The only issue is that Kidman will take it out every year... There is no competition!
Patrick - thanks for the feedback and yes pls read the disclaimer! Safe investing. John, thanks for the suggestion and you're 100% right. We obviously need to get a time limit in order to create some kind of filter. For the longer-term idea it actually might be better suited to our annual outlook series that I linked to at the bottom of the article. Appreciate the feedback.
Hi Ian, recent income focused investments that Joye is likely to be referring to include Neuberger Berman, Perpetual, Metrics Credit, Gryphon Capital. The LIC and LIT market still only represents a fraction of the unlisted market. Re politics... Livewire is a platform for fund managers to share their insights. I think for the most part we do a good job of keeping the conversation focussed on investing. With a Federal Election approaching there will be inevitably a rise in articles with a political bias. There are a number of proposed policies that have implications for investors and therefor will attract (and warrant) a level of debate. But point taken - we will continue to keep Livewire focussed on investing and politics to a necessary level.
Folks - good to see some views coming through on this thread and obviously this is a very topical subject with a range of views. Keep the comments coming, however, please try to keep them constructive (i.e. it's absolutely fine to disagree but please do so respectfully).
Hi Brian, a good point to raise and you certainly can't just rely on the quant screen. Marcus does make note of the need to conduct additional research... "There are other intangible factors to look for too, such as capable, shareholder-friendly management running companies with resilient business models."
Hi Graeme, I actually heard a presentation from Gryphon Capital last week. The performance of the LIT has been very stable and quite a contrast to property prices. I did reach out to them and request an article on the topic. They have some interesting data to present... Of course you can assess the performance on the ASX here: https://www.asx.com.au/asx/share-price-research/company/GCI
Well worth a read in my humble opinion...
Great interview. What stood out for me is that Millner advocates holding cash and being patient - this is completely at odds with so much of the investment theory that we hear and read. A great example of long term thinking.
What a cracking article.
Hi Sean, thanks for adding the transcript to your videos, makes for a very useful post. We've had a few people requesting an interview with Bill Evans to quizz him on his two rate cut call and what he thinks it will do for the economy. Would that be possible?
Hi Bruce, MOT isn't listed yet and is about to commence the IPO process.
Hi Richard, yes we have transcripts coming.
Hi Chris, I think we can probably get it up on our podcast channel. Leave it with me.
Hi Lillian, we should be able to publish a transcript in the next day or so once it has been proofed. Appreciate this is necessary for people with hearing difficulty and also those with poor internet access.
Very useful wrap up Alex, nicely done.
Thanks for the feedback Matthew, glad you enjoyed the session.
Hi Trevor, we usually get Chris to pop in once a year when he visits from the UK. He is definitely a bit bearish but at least he delivers his message with a smile. He is good at acknowledging where his calls don't play out and this is one we will most definitely follow up on.
Henry, FOMO is the acronym for 'fear of missing out'...
Hi Ardash and Chi Kiet, thanks for the feedback and glad you got some useful information from the interview.
Thanks Adam, he definitely helps to focus your attention on the few big picture issues that matter. Cheers, James
Pretty interesting to see SSM up ~4% on their results today. I know it's just one example but certainly supports the thesis.
We can provide the transcript, just keep in mind that the written version does not exist if the video isn't produced.
Sr V - we actually don't change the format. Some shows go longer than others. The brief is the same for each show... We have, however, noted your comments. Thanks for watching!
Great to be back for 2019! Our cast of hosts including Matthew Kidman, Sam Willis, Ben Clark and Jeremy Hook will all be back this year. We will have familiar guests and as always we will endeavour to find some fresh faces.
That's gold Rob
Hi Gerald, thanks for that comment and educating investors about fixed income and bonds is most definitely one of our goals. Glad to hear you enjoyed the podcast.
Interesting findings, which company moved their reporting date forward?
Pam, Eric and Emma, thanks for your comments and for your support. Hope you all have a successful year in 2019. Emma, we hope to hear from Miles and GVF when you have some interesting views to share - all the best.
Rowland, nice to hear from you and I enjoyed meeting you in Brisbane. It was great to hear your story, who knew owning garbage trucks could be so lucrative! Very pleased to hear you've been working with a good wealth professional. Livewire is a great resource but is not (and is not intended to be) a substitute for good advice. Congrats on building what sounds like a sensible portfolio and safe travels for the next 9 months. Thanks for your comment and for following Livewire.
Hi Ngaire, thanks for your comment and I think the investment community as a whole (Livewire included) has a lot of room to improve when it comes to engaging with female investors. There are some more general finance websites that speak specifically to women (Google - Financy) but they are more general less investment specific. All the best with your investing in 2019
Thanks Gary appreciate the feedback. Alan, that's a good suggestion and we actually attended and participated in a number of ASA events this year. A friendly group with no egos and a surprisingly good knowledge of investments. I hope to get along to a few events in 2019 - thanks for reading.
Hi Justin, it's a fair point. For me the wording in the headline "why we still like Peet' and the fact that this was authored by the CIO tells me that Allan Gray is and has been a holder of the stock before I even read the article. Point taken, however, and we can look into providing clearer disclosure. Thanks for the feedback.
Really enjoyed that Jonathan, gloves off with your views on the RBA. Does seem strange that we are still stuck with record low rates.
Hi Victor, we provided everyone (keyboard monkeys included) with the opportunity to submit their picks for 2019 via our annual survey. We will publish the results in the coming days.
Hi Ben, thanks for your feedback and we love the concept of a bloopers reel. Definitely something we can put together and there is always a few laughs when we film the episodes.
Jim, Sr V and Graeme, the idea behind the predictions series is to have a look at the issues facing investors and also to have a bit of fun. Everyone is aware of the flaws in making predictions and I hesitate each time I pull together this summary.. The fundies get involved and we open participation to our readers via a survey to generate a few talking points. But you are all correct - making accurate predictions on markets is near impossible.
Hi William, the 'score' references the predictions made by the fund managers in the videos, the images are of the user responses to the survey.
Hi Carlos, you're comment is incorrect. We actively encourage the contributors to respond and many of them do acknowledge and respond to reader comments. However, they are not using Livewire like a chat forum and that is not our intention for the platform. We can certainly do a better job to encourage further discussion, however, it is a fine balance between comments that add value and descending into a chat forum.
Hi James, we passed your comment through to Fidelity, however, it will be up to the manager to respond.
Hi Danny, this series is always released as a video. We've uploaded a few to our Soundcloud account and we can get this one added on Monday.
Hi Max, thanks for your kind words and glad you enjoyed the shows this year. Safe investing for 2019.
Great article, thanks for sharing your process and screening.
Cheers Lawrence, glad you got some value from the session.
Thanks Marvin, hope all is well up in QLD. Worth tuning in to the full podcast if you have the time, there are plenty of additional insights that I couldn't get into the wrap.
Great wrap up Pat, nicely done.
Thanks Jim, glad you found it useful. Some interesting comments on the retail sector.
A great episode, really enjoyed the discussion on building conviction.
Thanks for the feedback Frank
Hi Adam, Livewire allows contributed content from approved fund managers and that means that some of the videos are produced by third parties. The advantage is that we are able to open the platform to a wider range of commentary, which we think is a plus for our subscribers. In doing this we do relinquish some of the control on the produced content. Appreciate the feedback.
Hi Tony, each to their own and glad you enjoyed the article. Some people prefer the videos, others prefer to access via a transcript. We try to make the content available in all formats. James
Hi Colin and Trish, thanks for coming along and glad you enjoyed the event.
Thanks for taking the time to share your thesis on Class, hopefully another good result for the fund.
Chris, where have you been? Great to have the podcast back on Livewire and looking forward to some more interviews. My requests: Follow up interview with Xero, interviews with Afterpay and NextDC.
Hi Nik, just to clarify... Are you after more content or are you saying you'd like more material in audio format?
Hi there, we can absolutely add more options. We have started with a selection of funds that presented at the recent Livewire Live investment forum. If the service is something that investors feel adds value to the platform then we will most definitely look to add more funds. If you have specific managers you'd like to hear from please leave a comment so we know or shoot us an email on email@example.com
Hi Stanley, we will follow up with Weimin to see if we can get you a more detailed response.
Thanks for the suggestion SR V - the selection of stocks came from the 'most-shorted' list as per the ASX. We can certainly look at incorporating those stocks into future episodes.
Looking forward to my weekend podcast, thanks for putting this together Patrick!
Thanks Nikolas, appreciate the feedback and glad you enjoyed it.
Thanks for sharing your views Sean and a useful summation of what's taking place.
I'd say that was a pretty non-alarmist commentary Mike. 6 out of 24 of their indicators isn't exactly calling a disaster. We get lots of people asking about how to measure risks so they can think about how and when they might need to make changes in their portfolios.
Thanks Adrian, glad you enjoyed it.
Enjoyed that one Dean, thanks for the follow up article.
Well done Pat, really enjoyed reading this.
Jerome, wondering if NAOS can go to 100% cash and hence the extreme limit of no positions.
From my experience many fund managers are actually reluctant marketers and would rather spend most of their time investing. Investors demand access to the people running their money and I personally wouldn't invest without having had some level of exposure to the person running the fund - so marketing is a bit of a necessity. I think your first point is a strong one.. closely following company releases and attending results + AGMs will give you plenty of access to company CEOs. Thanks for the article Lawrence.
Hi Alex, thanks for sharing your counter view on the stock and it's great to hear people with a view on the other side of the story and raising some of the risks. Please send us a note if you'd like to provide a more detailed submission outlining what you think some of the risks might be, I think it would be of interest to readers. I'd also add that Dean was one of the very early fund managers to share his views on Afterpay with his first article on the stock published here over 2 years ago (https://www.livewiremarkets.com/wires/why-afterpay-asx-afy-is-one-of-cyan-s-top-small-cap-picks). Thanks again for sharing your views.
Hi Douglas, I've just completed a series of interviews focussed on fixed income and mostly on government bonds in the current environment. Will have this up on the Livewire website in the next few days.
Hi Jack, a fair point and I think you are right to use articles to test your own assumptions against counter views from other investors. That is definitely a great way to be using the Livewire website. Safe investing.
Hi Ted, thanks for your comment. I've had some similarly average experiences with Telstra and I think customer service and the offering they put to consumers needs to be a focus. The lack of flexibility in their contracts is such a short-term approach to retention...
Hi Jack, thanks for your comment. I think the article is pretty balanced and is simply drawing investors attention towards some of the risks. It also goes on to share two of the key data points that Magellan believe are worth keeping an eye on. I don't believe there are any conspiracy theories playing out here...
some cracking charts in here...
Hi Ian, I've reached out to the company and have the following response: "Neuberger Berman is partnering with Equity Trustees Limited, as responsible entity and issuer, to offer its Global High Yield strategy to Australian investors via a public offer (the “Offer”) and listing on the ASX later this year. The invitation to acquire securities under the Offer will be made through, and subject to, a Product Disclosure Statement (“PDS”), which will be issued by Equity Trustees. The PDS is expected to be available from 3 August 2018, being the date that the PDS is lodged with the Australian Securities and Investments Commission. You should obtain a copy of the PDS and consider its contents carefully before making a decision about whether to acquire or continue to hold any securities under the Offer"
Hi Ian, I feel like that debate would never end. We do have articles from time to time that debate the benefits and shortcomings of both active and passive. It's one of those topics that could gone on (and likely will) forever.
It's always interesting to hear the history of a firm and understand how management have shaped the company and their decisions. It would also have been good to get a view on the outlook for A2 Milk especially since you have been following it for a number of years.
Great collection of insights Alex.
This was a really insightful and entertaining presentation. I can highly recommend taking the time to check it out. A few good laughs in there too....
Essential education for all matters dealing in AUD
Jonathan, my understanding that there has been a big growth in new high yield markets such as Europe and Emerging Markets. Do you see the same issues here as you have outlined in the US?
David, just clarifying these are not 'stock tips'. This is some of the information presented at a shareholder forum that we thought would be of interest to readers. You're absolutely right to do your own research.
Really interesting points, great article.
Hugh, an excellent report and really appreciate the effort in putting these together for Livewire readers.
That second chart is a cracker
Thanks Mark, any chance we can get the charts a bit larger? They're a little tricky to ready (or I'm going blind in my old age).
Gareth, Michael and Pete - thanks for your comments on the episode today. The format of today's episode is consistent with the 'thematic' content that we've been producing for some time. The stats show that the short punchy Buy Hold Sell format is very popular with many of our readers (it's consistently our best rated content). To cater for those members (like yourselves) who enjoy the deep dive content we have recently introduced two new series. Namely our fund manager videos and the "Rules of Investing' podcast. These are typically released as the headline content on our Weekend Edition. Our members all have different tastes on content and we try to provide a mix of short form, long form, written, video and audio content. Not everything will be your cup of tea but I think there is plenty on offer to satisfy most members. Thanks again for the feedback - we have more of this style coming next week with a focus on banks and financials. James
Hi Gary, apologies for the spelling mistake (which I have now corrected). I can certainly reach out to Steve but can't guarantee a response. All the best, James
Hi Gary Krew, thanks for both of your comments and you're 100% entitled to your views. As you can see from the thread in this comments section the topic has created a lot of interest and a variety of differing views. We don't act as a censor for people with opposing views and only moderate comments if the language or tone becomes aggressive or uses abusive towards contributors or other Livewire members. We do that to keep the tone of the platform respectful.
Hi Rudi, I was thinking just last night that it seems everyone is bracing themselves for higher interest rates / inflation. From the commentary at least it appears that this has become the consensus view.
Hi James, really appreciate your feedback. Cheers, James
very interesting Andrew
Enjoyed the analysis of PayPal - such a great example of looking through the headlines to understand the full story. Goes a long way to explaining why 'ignore the noise' is one of the most common pieces of investing advice you hear from fund managers.
Hi Wes, thanks for your feedback. I definitely debated about factoring in questions on Trump but I felt the chance of getting really new information was low given how much coverage and focus Trump attracts. I'd actually reads through the release on Trump's infrastructure proposals the night before the interview and it was very light on detail. I did raise it with Ron and we made a call that it would be challenging to add anything concrete on this subject. Thanks again for tuning in and for the feedback.
Here's a link to the AFR article: http://www.afr.com/opinion/columnists/chinas-growth-story-is-far-from-dead-its-still-unfolding-20180129-h0pw2u
Great interview Chris, enjoy hearing about the transition over the past few years.
Great interview Chris and well done Matt and the team at Netwealth. A good story and some excellent achievements to date.
Umberto - Tim Toohey is the economist that works alongside Brett at Ellerston Capital. You can read some of his current and quite detailed views here: https://www.livewiremarkets.com/wires/livewire-summer-school-november-rain-and-insurance-claims
Really like the way Lachlan approached this session! Much appreciated...
Carlos, that is so good! Great find
Hi Ian, we haven't had a chance to sort all 614 responses yet... Will try and get it done next week.
Hi Andrew, the point, as the headline clearly indicates, is to announce the winners of the 2017 stock picking competition so we can give those people their tickets to our event.
Good article Michael, this is definitely a murky area of debate.
Cracking little podcast, well worth a listen and great to get some views from Matthew Kidman.
Hi there, this segment was purely focussed on the two sectors and we occasionally run one of these shows in addition to our regular Buy Hold Sell shows. We have our regular Friday show coming up - which will be the final episode for the year.
Hi Peter, the RSS is now available. James
Hi Anna, as Liz points out we are planning on getting this to itunes. However, there is a slight approval process to go through. Note that Inside Investing will have it's own channel - not the Cuffelinks or Livewire channels. James
Appreciate the feedback folks. We have some good guests coming up and will aim to release one of these each fortnight.
Appreciate the feedback. Cuffelinks have some great content and I'm keen to help Livewire readers discover new information that can help with their investing. The podcast will be a learning process and I'm sure we will get better as we go. Have a great weekend. James
No QVG Capital on this list?
Hi Tim, here's one of the specific examples given by the Spheria Team that is already published on the website. Here: https://www.livewiremarkets.com/wires/former-market-darling-offers-compelling-value there will be another one coming through shortly.
Hi Pete, yep it was pretty succinct. Think we'll try to get a little bit more flesh moving forwards.
Thanks Ashok, Ben and Ray for your comments. We have a few more great episodes with Charlie, Matthew and Geoff to come out over the next week or so. I also recorded an extended interview with Charlie which has some very interesting commentary. Should be a good week on Livewire coming up. As always we appreciate you tuning in to the website, have a great weekend. James
Really enjoyed this note Rudi - highly recommended reading.
Thanks for the contribution Pete and a very interesting dynamic to follow.
Thank you Hamish for sharing such detailed and transparent analysis on what is a widely held and very topical stock. Worth reading for any Telstra holders...
On Telstra Revisited -
Couldn't agree more with your balanced assessment - nicely said.
I can't see what impact an additional rate cut from the RBA would have at this stage. As you point out the average household has borrowed about as much as they possibly can and more...Still feels like a bit of a muddle through for the domestic economy to me with any rate moves likely to be pretty slow.
On Catch 22 for RBA -
Hi Michael, great point. The data came straight from ABS so we can look into it and come back to you with the answer.
Well worth a read. Fascinating stuff, even if only some of it comes off. The driverless taxi service from Google will be a good one to watch.
Thanks for sharing Tim, some interesting analysis and a balanced view.
Thanks for sharing Jeff, would be great to hear a few other thoughts from readers...
We speak with a lot of fund managers and it is fair to say Steve is as authentic and transparent as they come. Willing to talk about failures but fiercely motivated to become a better investor. He's at the forefront when it comes to communicating with his investors. It's great to see the funds performing well, hopefully it continues. (disclosure: not invested in Forager Funds)
great write up Dean, really interesting to follow the progress of this story.
Excellent post. Would be great to see this article extended to 3 and 5 year time frames where possible... Thanks Mark
The cut looks to be larger than brokers were expecting.
Great article Chris, a very interesting dynamic to keep an eye on.
We did actually have Jordan Eliseo write an article specifically addressing the best way to invest in gold. Copy and paste this link: https://www.livewiremarkets.com/wires/what-is-the-best-way-to-invest-in-physical-gold
Glad you enjoyed it Harley, I thought it was a fascinating story. Some great insights about learning from other peoples mistakes.
Hi Graham , thanks for your comment - with due respect there is a meaningful portion of the Livewire audience that are looking for these types of solutions. Ben is listed as a contributor on Livewire along with his position as a PM at Totus, I believe his disclaimer was intended as a declaration of interest but worth pointing out. Do you have soem alternative suggestions to add, I think it's a topic investors are interested in at the moment. James
Great little wrap!
No wonder so many people are scratching their heads when it comes to figuring out markets. Dog's Breakfast is an apt description...
On GFC 10 years on -
I'm getting better at #1, guilty of #2 and surprisingly I seem to have #3 under control. Would be good to hear what other investors are grappling with. I'd say having a strong sell discipline would be my biggest weakness...
Would be great if you listed some of the companies that have CEOs who pass your filters. Maybe an idea for a follow up article
Hi Sam, thanks for this post and interesting to hear about the change in behaviour from the brokers... Great insight
Hi Muditha, we're running a panel session on this in the next few days and will get some views on BWX + AMA.
Sensible words Tim.
Really interesting company, great presentation.
Hi Mark, unfortunately we don't have any formatting option in the current comments field (feedback noted) . I'll drop you an email and follow up on your question with Nathan to see if we can get you a response. James
Great to have your commentary back on the platform Tristan.
Great read Steve, I've been noting with interest the change in sentiment from your peers. You were early on this one...
Hi Adam, tickets will go on sale tomorrow i.e. 14th of June. Nick Griffin should be a great addition to the event.
great article Alex.
Sydney at The ASX Auditorium on Bridge St
Hi Graeme, could be any number of reasons and they could be entirely unrelated to the Future Gen. We just find it interesting to have a look at these things after the fact. We did the same for the Hearts and Minds Conference last year.
Another comment sent from a Livewire reader: "Mr. Parker! I just read that you are liquidating your shares and giving back millions to your clients. Just wanted to say that you have a lot of integrity in doing so. I have tried talking to many, many people regarding the gloomy outlook (I live in the U.S. ) but am usually met with skepticism....That's awesome you are honest enough to do what you are doing!"
Comments like this come up from time to time. I'm genuinely surprised that people even raise an eyebrow that a fund manager is talking about a stock that they own or one they are short. It's clear from the article that the fund manager owns the stock and his name and firm are in the by-line. Once a fund manager has done the work I can completely understand why they would want to tell the story. As a reader you should definitely factor in any bias the author may have, this relates to any article you read. Always start from a position of skepticism...
Probably right Sam, more like a hospital pass than a big hit.
Pretty interesting interview, some great company examples and good explanation of process.
Great read Alex.
Hi Tony, really appreciate the feedback. We put a lot of effort into making the content so it's great to hear you enjoy it.
Hi Callum, the video is showing now.
On The Base Metal Boost -
Great story Steve
A very interesting perspective...
Excellent post Daryl, some really useful and practical ideas that are accessible to all investors. Thanks for sharing
Chinese charts are awesome
Great chart and interesting commentary, thanks for sharing Callum.
Hi Graeme, appreciate your feedback. There is nothing certain about forecasts, strategists like Gerard Minack work on probabilities not certainties and use economic data to help with their analysis. I found it interesting to see that Minack – a highly regarded strategist - had changed his view. His position was supported by the data, which was presented in the two charts I included. The data on the US dollar was used to illustrate how the market had moved given this was previously cited as an influential factor in the global economy. The comments you highlight regarding the US Dollar are mine not Minack’s. I have no idea where the US dollar goes, however, I was interested to see that given the strength of the US economic data that the USD had not moved against many major currencies over the past year.
Great reading - Buffett as a business owner and as an investor.
What's your view / probability of another negative quarter?
Hi Andrew, you're entitled to an opinion, however, keep in mind that Hyperion have a very long track record (and a good one at that). To have one of their senior investors talk openly about holdings that have been sold down and their approach under these circumstances is quite unique and in our opinion adds value to the platform. We can always go and find people who are only willing talk about their winners - but we don't think that is a reflection of the reality of investing.
Callum, to be clear - the blue and grey lines are the SLOOS data?
Great work Patrick
great article Andrew. The director selling has come under the spotlight recently. Has this always been part of your process?
Lots of great information and resources in here...
Welcome back Mathan, all the best in your new role at Blue Ocean Equities.
Love the conviction Dean
Nice summary, thanks for sharing.
Hi Allan, thanks for your comment. Livewire isn't a stock recommendation service. Our goal is to give you access to the views and opinions of investment professionals in an easy to use format. In terms of finding out which companies Roger feels are high quality you can simply search on his name and you will find numerous articles where he discusses stocks that his team think are high quality. You can access a recent article here: https://www.livewiremarkets.com/wires/34138 . Please remember this isn't a tipping or recommendation service, if you are looking for that you should spend some time reviewing the different providers - all of which will charge a subscription fee for their services.
Great to have your views back on Livewire in 2017
Hi Geoff, this is something we can definitely do - it might just take us a few days to get all the stocks categorised. We've had requests for the micro caps as well, so we will pull together a few different lists. Please remember these are just submissions via the survey - not recommendations. Cheers, James
Thanks Mark, re STL - is the move to a cashless society not a big structural headwind for this company?
The central piece of the article is around investor behaviours and some of the emotions that kick in when you're experiencing losses. I look after my own super and probably the biggest mistakes I made in the early years were caused by selling positions in individual stocks that had experienced short term prices falls. In almost every case (e.g. BTT, CGF, CBA) if I'd held my course I would have achieved a better outcome. Avoiding the temptation to tinker/fiddle with stock positions is one of the disciplines I constantly need to remind myself of...
I drive a 1998 Mitsubishi Mirage! I'm opening a new fund next week ;-)
Dean. I've read Liars Poker - very entertaining (you'll laugh out loud). Has the potential to put you off markets entirely...
I've just finished Shoe Dog which is the Nike Story from Phil Knight. Highly recommended and pretty easy to get through.
Hi Peter, I'd love to see a post looking at LIC fees and the different costs across the sector.
Great article Sam, a good summation of key questions.
Good wrap Sean, thanks for sharing..
Interesting feedback, thanks for taking the time to comment.
Looks on track for today.
Hi Grant, a fair suggestion and we can certainly look into some practical ways to incorporate this into the show. Please make sure you read the disclaimer slide which draws attention to the fact that the presenters may have interest in the companies discussed. James
Good read Dan, some interesting thoughts around inflation.
Hi Tony, I had a similar thought process to you and I think it is a good point of discussion.
Appreciate you sharing your thoughts on this Romano
HM: 5.5% p.a. looks like the 'most reasonable' return investors should expect over the foreseeable future...
18:01 - Howard Marks on the credentials to win a US election... great stuff
great little video...
Worth watching this, an interesting little interview.
What about having an eye for costs, particularly in how you execute and manage your portfolio...
Two different approaches, i.e. Platypus are growth and Katana more of a value approach.
Thanks for sharing... an interesting read.
Great article and excellent read. Thanks for sharing and a very timely piece of analysis.
On Wishing aloud -
Haihang, Chris did sharehis views on this two months ago here: https://www.livewiremarkets.com/wires/32232
Thanks for the update Mark, nicely done
Thanks for sharing Justin, I think your message about the binary outcomes is a good one. Unfortunately very hard to anticipate..
View on the Fed? Can they raise rates or are they stuck where they are?
Really enjoyed this article Jordan.
Worth a read, there are some very good messages in this article particularly for younger people who have time to act...
On Poor retirees -
Thanks Rudi, great read.
Hi Stephen, I think the RBA has actually done a pretty good job when you take into consideration the fact that they have one blunt monetary tool at their disposal. With rates at 1.5% they have far more options at their disposal than most other central banks. The fact is that there has been a distinct lack of fiscal support combined with a lack of political leadership. I personally don't think the RBA should be lumped with shouldering the whole burden of creating demand and jobs...
I thought the comments about the property market were interesting. Essentially RBA said they think property price growth has eased and they have their eyes on the pipeline of apartments coming through on the east coast. This was one of the major sticking points in the 'against cutting' rates camp. It was very specific commentary so they are making a bold statement.
Hi David, glad you enjoyed the article. Livewire content is curated but the majority of it is not editorial. You will often find information/ideas that are technical in nature. Your suggestion about a glossary of terms is a good one and something we will consider for the website.
Interesting read, how much of your decision to buy shares was based on the behaviour of passive funds? I.E. Did you see this coming?
Most of the commentary I've read suggests there is less concern about the 'health' of the financial sector, but definitely worth keeping in mind...
good wrap Tristan
We're having a debate about other potential candidates for the list... Interested to hear thoughts from any readers. Invocare (ASX:IVC)??
Thanks for sharing Daniel, some useful information in that post. James
Should be easier to see now...
Good read Hugh
Well done Sam, look forward to following the portfolio's progress.
Great chart, I often liken this to owner operated businesses - the passion and focus on the customer experience is key.
I use a full service broker and as a retail investor have had access to some reasonable IPOs. Also Medibank was widely available..
We're just debating whether an issue like this should be left to the masses to decide? Do they really understand the issues?
On Does Brexit matter? -
Thanks for sharing this detailed report.
Hi Tim, thanks for taking the time to put this together. Clearly written and well presented. James
Great read and a very interesting topic. The performance of these stocks has been incredible...
Proactive fiscal policy?
Thanks for sharing this blog Peter, some very detailed analysis and great to get the views of a property expert on what is a highly topical issue.
Really interesting article Alex.
The irony about your third point is that the harder you force yourself to look for new ideas the more difficult it can become to generate them.
Hi Tim, I agree with your sentiments and the moves from the ASX about potentially placing higher 'quality' hurdles for new tech IPOs speaks to your message. Perhaps, a closer inspection would be a good follow up piece for one of your more detailed monthly reports. It appears to be an issue that is worthy of further discussion. As always thanks for your contribution to the platform. James
Great wire John
You guys held your nerve in Q1 this year, was looking tight for a little while
I like that suggestion Michael. I tend to find I am often fighting the temptation to tweak things that aren't necessarily broken or wrong. Usually if I force myself to look at the position on a 3 - 5 year view the urge to change something is overcome.
great analysis Jonathan...
Great little video, very useful.
Banks weighing on the weighted index...
Great to have you back on Livewire Elliot
Very useful presentation, thanks for sharing.
Thanks for putting this together Pat, some exceptional insights...
Google was free for so long - they are starting to turn the screws...
Central Bankers have taken us to this place!!
Thanks for sharing these sentiments Romano, some good charts..
On Hope is Not a Plan -
Good question, plenty of Asian Market LICs are trading at big discounts too
Headlines today = Housing/Apartments looking overvalued (40% in some cases), lists of suburbs being blacklisted by lenders, Bad & Doubtful Debts on the rise, Bank margins under pressure, dividends under pressure, AUD too high and could start to impact the transition away from mining.
Definitely feels that way...
Nice selection Pat
Good point, you could argue simply finding stability would do the same
Very true Graeme. It is also true that markets can react to information that is seemingly already known sometime after it happens. For example the US rate rise in late 2015 couldn't have been more telegraphed yet it appeared to be the source of a great deal of volatility...
Really interesting stuff
Strong close today
It's definitely interesting to see, wasn't what I was expecting
Excellent read Sam, great insight into the capex outlook.
In general agree with your sentiments. I also think there has been some commentary about property markets that was drummed up by the press and would have been extremely alarming and probably quite terrifying for many people. Moving to the extremes of being either too complacent or overly pessimistic is unlikely to result in people making rational decisions.
Angela, how do technical signals hold up in such volatile markets?
Couldn't agree more with your 4th point
Isaac, thanks for your comment and we definitely encourage differing views, thanks for making your point and explaining your position. My take on this was that Chris was not always advocating to sell in down dips but more he was pointing out that in his view there appear to be an 'abnormal' number risks at present. If you look back over the interviews we have run with Chris he has had a relatively cautious stance for some time so this was certainly not out of the blue for him. He did also refer to take a more 'defensive' stance with the risk assets that you do hold so I don't think he was suggesting full liquidation.
Have a good weekend Pat
Worth taking the time to read the full article in my view...
Adam, thanks for the feedback and glad you enjoy the format
An enjoyable read Rudi
A good selection Pat. The piece from Fidelity was an excellent and timely read.
Good wrap Pat, this was my pick: https://www.livewiremarkets.com/wires/30339
This is a great read, thank you for sharing and some very interesting observations.
I can't remember a time where views on the direction of interest rates have been so polarized. RBA seems to be a reluctant cutter - rates already at record lows... cost of funding probably isn't a major concern for businesses so lower rates would have a limited effect there and households are already heavily indebted. Maybe there is a case for lower rates, I'm just not sure how much impact it would have.
Hi Angela, do you have or are you able to produce a similar style update for the ASX200? James
Thanks for sharing Angus, I'm looking forward to having a read through this.
very interesting, good read.
Good interview, interesting views on a range of currencies. I agree with your comments re inflation in Aus
Is there a link or pdf for this report?
nice chart Mathan
Thanks David. Glad you enjoy it and we will be back in 2016. James
Hi Rudi, Thanks for all your posts this year. Always a good read.
There is plenty of self serving that goes on in speculative exploration as well. The sector does itself no favours
Thanks for sharing Andrew.
No fence sitting here...
worth a read...
Romano, would you expect the other banks to start rallying in anticipation of such an outcome?
Interesting note Romano
I learnt this lesson the hard way!
It's a fair point - traditional valuation metrics go out the window and this type of business is not native to the ASX... LinkedIn is very well established with diversified revenue streams, so quite a different proposition.
Hi Nathan, no link in the wire?
Great article - well worth taking the time to read in full.
Interesting read Pete
Thanks Gordon, glad you enjoyed the discussion and appreciate the feedback
Still can't get convinced I need to be looking in this space. I'm sure these businesses will be around for a while but it still feels too fluid with new supply coming to market...
Interesting read Lachlan and thanks for taking the time to share with Livewire.
Great to see big super funds putting a meaningful amount into new businesses. This is a tiny drop of their assets but very significant for the start ups they back. So refreshing to see this level of conviction from some big super funds
Nice work Dan. Interesting charts on your growth indicators
Cracking charts, forward EPS is a worry
Good read guys, thanks for sharing
A great tool for investors and very excited about some of the opportunities we can work on with this smart, innovative and customer focused team.
Do you think the type of apartments being built at the moment are being built for a specific investor market and will they be as appealing in the secondary market as some of these first homebuyers come back as suggested in the stats you present?
Great post Pete and some great information on demographics.
"Focus on better quality businesses" - keep it simple
Great video, very sensible comments about risk and being aware of the potential for capital loss
Great little video and worth watching
On Pricing Power & REA -
Well worth taking the time to read this article.
Surely this market has lost credibility? It's like markets are so used to central bank intervention it is viewed and received as par for the course.
Very useful presentation
Mark, audio levels + quality seem fine to me. What issues are you experiencing?
Does your short thesis hold up under this scenario or does this put a floor under WOW?
Pretty timely as Woolworths announce CEO is now leaving
Romano, have you reviewed the fortunes or prospects of Atlas Iron? We have read some positive commentary on the prospects for FMG but is Atlas a step too far?
I never really know what to make of the individual releases on data points such as these - there always seems to be revisions and errors in the counting. However, I do like to look at longer term trends and as per the Bloxham post above there looks to be (at least for now) a trend lower. There are new businesses being set up that may well be hiring and employing people but aren't yet making a meaningful contribution to GDP.
We love a good chart!
Good wrap up Elliot, thanks for sharing and look forward to the consumer sentiment report.
Great little note and some good articles mixed in.
On Market Bites -
There is no doubt Chris has some contrarian views. I'm happy to hear them and I also think he is trying to get people thinking about possibilities not probabilities. Economists have no chance of getting all their calls right - but I think there is merit in highlighting a range of potential scenarios.
The whole report is excellent, the introduction is one of the better pieces of analysis/commentary I have read in a while.
Tidy work Tobes
I attended the launch of this product, apparently a floating rate version of the product is in the pipeline...
Straight from the source Steve..
Interesting to see how Banks trade ex div this week... After reporting season one of the stand out aspects was how strong many companies performed as they went ex dividend.
Excellent piece Sam - well done and a fascinating read.
I think it also highlights the importance of businesses that have high barriers to entry. In the case of Apple they have created a whole ecosystem around their products that make it very difficult to leave. They were early to innovate and this early innovate allowed them to capture a massive portion of the market. The trick with Apple is they have done an exceptional job and keeping their user base captive and feeding them new products as they are incrementally developed.
Great report Jordan - "adjustm ents involved trimming the Fund’s investment in relatively popular assets and adding to unpopular assets, contrary to the ‘herd’"
Thanks Rudi - it was a typo - have removed the 1...
Pretty wise words
On A time to be patient -
Wayne, thanks for sharing and welcome to the platform. James
Thanks Rudi, appreciate you sharing this analysis.
Great note James
Interesting moves, such a tricky balancing act with the RBA. If China stimulus takes hold the short AUD could get flipped around very quickly
That is a fascinating article Chad. So interesting... Well done
The piece on the gold reserves in China is fascinating especially the move to become more transparent - it really is like they are going through some growing pains. Nice read Jordan
How many of the banks were in the 18 stock sell signals?
Interesting to see WA still ranked #2 for retail spending. I would have expected that to drop with the mining slow down and weak sentiment...
On State of the States -
Too much time with the kids over Easter Mathan?
Angela where is the support level for the ASX200?
Thanks for the feedback Dean. Are you specifically looking for information on LICs or more industry research reports such as the one attached to this wire?
Employment data very interesting.. Need a few more results to see a trend forming
interesting read Dan and sentiment is certainly in the doldrums right now with mine closures, job losses in the industry as well as weak data from China.
good read this morning Matt
Dan you refer regularly to your growth indicators in your blogs. Are you able to give some insight into what goes into these indicators and why you have chosen the respective data points? Cheers, James
Have a good weekend Niv
On Happy Easter -
If you have a suggestion for a topic you would like covered please let us know via the comments section on this ‘wire’ or send us an email on firstname.lastname@example.org. Have a safe and happy Easter. Cheers James
Hey Mathan, if you can upload the odd for now I will let you know when the links are working again. Cheers
Hey Mathan, I experienced the same issue. I logged it on our side as I thought it may have been related to the new website. Are you able to post the full link in the comments or emal me the report link? web.
Owen one example from Chris was highlighted in this wire: https://www.livewiremarkets.com/wires/26514
Nathan, some great insights in the interview - in particular I thought your observation on dairy in China were interesting. Thanks for sharing.
This is a pretty murky area Gavin and certainly one to watch closely.
Steve on a similar but slightly different topic... Clive helps current government repeal the Carbon Tax... Does this then flow on to improved sentiment in the resources space or potential other parts of the market such as broader consumer sentiment?
Folks if you have some time I really recommend watching this video. Some very high conviction commentary explained in a straight forward manner from one of the best small cap managers.
Nice wrap, looking forward to the outlook themes next week.
Good read Jordan and some good charts. I do think that the volume/headline is a good starting point for the US economy. These kinds of results not only reflect the employment numbers but they also flow through to consumer confidence. There is no doubt it has been a grind back from the GFC, however, with the consumer such a big part of the US economy confidence is a big influence and strong headlines are a good place to start.
Jordan, seems to be growing momentum and support for changes to the gold pricing fix. How quickly could something like this pass through the industry? http://www.bloomberg.com/news/2014-07-07/gold-industry-seen-to-support-changes-to-benchmark-fixing.html
I know it is a different sector but the WTF takeover highlighted that the laggards have got bullseyes all over them. Cheaper to buy it than build it in this market.
SXL had a good day today, in terms of out of favour SXL is definitely bumping along the bottom in that category.
Gav, I have started reading a number of reports on the same front. Feels like the Australian market hasn't fully bought into this or just isn't fully aware. I know a number of resources investors are taking a 12-18 month view on Zinc and are quite bullish on the outlook. Do you have some preferred exposures?
Good drama in this wire! Exciting for the company as well
This is a useful article, thanks for sharing.
CSE market cap at close yesterday was $41.6million - 30% discount to implied value of the SYR position. Interesting note Matt
Chris your point about the market entering euphoric phase is coming up pretty regularly in conversations at the moment. Smaller/micro cap companies are starting to get some airtime and a bit of heat returning in junior resources. But it doesn't feel like everything is being thrown at the market just yet....
Gav, I am not sure if you cover the space but I would love to know where you see exposure to Zinc on the ASX? I have been following your posts on the Zinc market pretty closely and would be interested in your views on listed exposures...
Rod, I am starting to see a fair bit more interest in the smaller end of the market. Some investors are definitely starting to move down the quality chain or towards the more speculative end of the market.
This is an interesting concept. So much at stake with the value of space equipment etc Pretty hard to get your head around risk associated with the company/technology...
Further to this REA announce this morning they have acquired 17% of ASx listed I Property Group
Jordan, this is a superb link. thanks for sharing
Kieran, have you had a chance to look over the Resmed results? What were your thoughts?
Kieran is it one you follow? Looks to have been on a good run since the Buy Back of the convertible notes?
I should mention the chart is courtesy of Dan Petrie at Bloomberg.
Perhaps there would also be a correlation between perceived quality of life in Australia and the additional floor space in our homes. Are people willing to pay a premium or at least top dollar for an intangible?
A good question raised is with respect to the pricing. With budgetary issues central in Australia, would investors/Australians like to see the Government get the best price possible to put more in our coffers or leave some on the table so those who do get access make personal gains. Which would have the biggest impact on votes??
Steve we noticed a lot of fund managers and particularly those who identified themselves as value investors had been running higher cash balances for a period of time this year. They cited market or more specifically stock valuations as the main driver of this position. As a value investor yourself have you found the slow grind higher has impacted your own cash weightings in this cycle more than previous recoveries?
Interesting to see RIO reveal their cost of production at $20/tonne. It could get interesting if the supply response does start to see higher cost producers bow out of the market.
Dan that is a great article. The research on asset class performance during periods of inflation certainly raises some questions.
Cheers Rod. I know the bull market discussion has been widely broadcast but good charts often provide interesting perspective.
The statistics on manufacturing levels is pretty alarming. Manufacturing output is lower now than it was in 2002 and is set to fall further once the last of the auto plants shuts down in 2017. Not sure if you read the article from BTIM on the currency? But basically very hard to see the dollar falling quickly with all the stimulus globally. Even with the fall so far we struggle to be competitive.
Suncorp result looks excellent. Special dividend of $.30 per share is ahead of a number of forecasts.
Mathan, time to update the calls on your Sporting Bets. Bunnies looking powerful after defeating Manly and then putting Broncos to the sword last night. Surely they have momentum going into finals?
This was pretty big news yesterday, I didn't have time to work out how much of the project CVN own? It seems unlikely a big Company would make such a bullish statement about a discovery without having a decent level of confidence. However, the hit rates on these offshore wells are so low.
That is a great little read Daniel, I agree with the timeliness of your post.
I like your new photo as well Rudi ;-)
That is a good article Rudi
A little bump today, are you expecting this to roll out over a few days?
Interesting to see consumer confidence also rebounding post the budget. Appears to have regained most of the lost ground since May. Also recent data shows that confidence in household finances are growing. Assuming we don't just keep saving it could bode well for retailers...
On Sydney property... If you say it is a bubble for long enough one day you (might) be right.
I agree with your sentiments Jordan, definitely a catch 22 situation. We are in this situation because companies/boards responded to investor requests. It was not just the mums and dads but also big funds. You can't blame them for responding to their investors. The best thing the Government could do is provide a solid political backdrop for corporates to invest against. Neither Govt. has been able to deliver this in recent history.
Good article Dan. The discussion on the Oil space is very interesting - I always enjoy a bit of conspiracy theory, even more so when it involves Russia...
Good read Nathan and some interesting charts
Mathan, could you write a post for us that shows the performance of the Quant portfolio that you have put together and explains the constituents etc? I was looking with interest at the chart on page 21 which looks like you have generated good returns? What goes into the portfolio? Is it essentially tracking the ideas in Sunset Strip? Cheers
I agree with many of the sentiments in your post David. However, the timing of interest rate movements seems like the most influential factor in the discussion. On that front I am it does not feel like rates in the US or Australia are going to rise in a hurry. The relative value of equities against other asset classes looks like it could be a persistent theme throughout FY15.
Good read this morning Shawn - it feels like equities is becoming a game of chicken. How long can you stay in the fast lane before you need to step out of the way of interest rates.
Good write up Dan and some good charts as always
Also appears to take some heat out of the discussion around US rates rising. Good for equity investors
This is a great read this morning Shawn. Everyone seems to have a position/opinion on iron ore. I like your observation regarding the front page article in the press. Interesting to see how long the pain drags out on the sector.
looking forward to this one Jay
Very interested to see how this one performs. It will be a great benchmark for investor appetite the tech sector in the US.
I missed the Sunset Strip - great to have you back Mathan. Both Breville and Myer seem to be contentious at the moment...
There are some conflicting technical views appearing on Livewire right now... (see the QMG post today). Are your Quant indicators telling a diiferent story?
Pete, enjoyed the show last night. Good guests and you guys covered a fair bit of ground in a short period of time. Some great discussion around the falling dollar and especially AWC. Well done!
interesting stats regarding mining expenditure in Chile as well...
Sounds like a tough day Dan - Pretty sure every investor will have similar stories from some point in time. The China stimulus injection does seem a little short sighted but they do have a stated growth target of 7.5%, they need to get there somehow...
Nice little wrap of the outcomes David
Good reading this morning Shawn, thanks for sharing with Livewire. The note re bank dividends later in the year is particular interesting.
PT - that seems like a pretty big range.... Is there a further interpretation of these results?
Strong rally off the lows today - does this impact the technical signals?
David to you take a trend out of the historic data on retail sales? From the chart it appears to be pretty volatile...
Glad to see you changing your tune on the rabbits
Not that many got it right last time
Craig, what is your take on the implications of the IMF downgrade for equities? Short term looks like it will add to volatility but longer term does it have a major impact? .... potential prospect of further downward revisions?
No problems Nathan, now you just have to go and back it up with another good year!!
Angela does your technical analysis provide indications as to where/how far the downside exists? I.E. Is there a resistance level for the Australian market?
I don't know how much attention financial markets pay to these comments? They definitely get airtime in the press but I am skeptical as to how investors would view an RBA Governor's view on markets. Policy intervention certainly... but talking down markets I am not so sure.
Nice report Chris. I thought this observation from Shawn Hickman was quite interesting as small caps had been leading the way lower in the US. the Russell 2000 (small cap Index) was up 1.28%, a bullish indicator to me with the index that led the decline is now leading the recovery.
So Nathan with 35% of your portfolio exposed to Europe have you made any changes in light of the recent headlines/reports on slowing growth (specifically in Germany). It sounds like at the company level things are more positive than negative, however, it also seems like a small change could reverse this situation quite easily.
Nice detective work John, very interesting.
Most of the press I have read on this seems to be reasonably relaxed about the outcomes. No major surprises on the banks that still have work to do and for investors a sense that banks are being closely watched and evaluated on an even footing.
So dovish commentary on rates sees gold rally in the short term?
I guess the question is how much of this was priced in prior to this release being made today. I suspect many would have already sold down the stock in anticipation of an adverse outcome. Shoot first and ask questions later.
Julius, a regular question is being raised about the range in the pricing. I.E. Investors don't know exactly what they are bidding into from a pricing perspective. Are you assuming the offer prices at the top end of the raise and if so I assume you are still comfortable with this valuation?
We like your blog Dan, even if the folks on Facebook don't ;-)
There must be a demo video going along with this...
Great article Harshal, love this quote - The reason solar-power generation will increasingly dominate: it's a technology, not a fuel. As such, efficiency increases and prices fall as time goes on. The price of Earth's limited fossil fuels tends to go the other direction.
Great article Harshal, love this qupte - The reason solar-power generation will increasingly dominate: it's a technology, not a fuel. As such, efficiency increases and prices fall as time goes on. The price of Earth's limited fossil fuels tends to go the other direction.
Tom @tom are you able to get a notification on this?
It's a good wrap and well explained. Expects the AUD to move back above 90cents in FY15 - so resilient.
The difference is scale. New technology is something the incumbents can buy if it really starts to agitate them, sure they might have to pay a bit for it but they can afford to if they have to. The difference is the existing client base that these global companies (like AMEX, Visa, Mastercard etc) have and their brand recognition is so valuable, embedded and so hard to replicate.
Very interesting read Peter, great insights around population trends between states and specifically in Sydney.
I would also argue that they are also facing some major structural headwinds as well. The iPhone release was on the 17th of September and you would have expected to stock to rally ahead of that news (which it didn't). A slight uptick following the AGM commentary but it does look weak.
very interesting read Rudi. Thanks for sharing and making the full article available.
Great article Jason - absolutely staggering numbers...
Pete, I have a pretty straight up and down question that I am hoping you can shed some light on. Companies like CSR, Boral, Harvey Norman and the like have all benefited from increased housing construction. I note your comments about the population growth in the eastern stats as well as your commentary on the peak of apartment construction having passed. So (in your view) has the sweet spot for housing passed or is the cycle likely to have a long tail?
Stock coverage in the AGM presentation worth a read, thanks for sharing!
Are you able to reproduce the same chart corrected for the currencies?
I tend to agree Karl...
Karl - can we get a chart with a progress update?
So the real divergence in performance has really only been in the past two years...
Perhaps some economic benefit for the local Brisbane economy that will be reflected in later data releases? Images of Koalas beamed back to the US encouraging Americans to travel on the renewed strength in their dollar?
Were there any significant changes to sentiment month on month or were these responses reasonably consistent?
Good article Cameron, I just had the time to go through and read in more detail.
I went to four open inspections and an auction on the weekend to go and have a look at the activity levels myself. The open inspections were suprisingly quiet even the owner who I spoke with said they had been a bit disappointed with the level of interest in the property (in Redfern). There were four properties for sale on the one street which usually experiences slow turnover. It definitely felt like buyer demand was now being met with a supply response.
This from Mathan at Baillieu: When we started pushing the tidal wave of unemployment with economic outlook leading to interest rate cuts it sounded a bit number of months ago, now it is fast becoming consensus. Unemployment is going to get close 7% and remain close to 6% atleast till 2017. There is a lot of structural unemployment coming and we have not made any structural changes to cater for it. Mid-year budget outlook is going make Wayne Swan look like magician. Joe Hockey just went out of the line to be the next Liberal leader. 2016 federal election ruffy from a long way out....Julie Bishop to lead the Liberals as Tony steps aside for the good of the party. Victorian elections looks like a reverse of last Fed election....Labour wins purely to vote out Liberals.
Although Vale produce at highest grades so in reality they probably don't care if the market gets flushed out.
The reaction in NCM and RRL on the exchange today has been quite dramatic. It seems strange that given a no vote was expected that the reaction has been so dramatic. Hard to believe sentiment towards resources/metals in general could get any worse...
Sean, have developments over the past two weeks or so shifted your view on the AUD. From memory you were expecting a rally back above 90 cents... With the fall in oil prices and the rate cut in China has your position now moved?
More of the conversations I am having with equity markets investors are leaning towards a rate cut if not two in CY15. AGM season (i.e. November) has seen a staggering number of profit warnings and downgrades - which would seem to be a pretty good indicator. This has been across a broad spectrum of industries as well - not just isolated to resources/mining services.
Good foraging Tobes...
Excellent presentation Miles, really enjoyed the perspective on currency and money markets. Highly recommended viewing and some great perspective on many of the big headlines being discussed right now.
Not such a good sign leading into Christmas...
There was certainly some pretty strong language in that interview and some good counter arguments (in my view) against a further rate cuts. Stevens' point about job losses not being dramatic, whilst a little insensitive, does probably stand true when you look at the experience of some of the EU nations. It certainly doesn't suggest a rate cut is a forgone conclusion... The AFR interview is a good read. http://www.afr.com/p/national/glenn_stevens_interview_the_full_FiihZ41I8IrOls4Yh6D8wK
Is there a chart that illustrates that gross over-estimation
Love the poem guys.
Very insightful Rudi
Mark was the release on the 18th effectively a profit upgrade? The release also makes mention of some turnaround initiatives in the 1800 business - is this part of the business stable or facing challenges? Interesting little story
Healthcare and Telcos... Be interesting to see how much of the Telco performance was driven by Telstra
Tim, really enjoyed your example on the risk free rate currently being used in analyst valuations. Do you think the performance of sectors (such as those highlighted in your newsletter) reflect sentiment towards the prospect of further rate cuts in Australia?
Hi Dan thanks for sharing this blog and agree with your sentiments. I suspect long AUD would be a pretty lonely trade at the moment but great to see another perspective on the currency.
It is an interesting space at the moment, NCM has rallied 50% since November last year but as you point out the broad economic picture seems to have deteriorated even further during that period. We have had a few gold bugs in hiding for the past 12 months on Livewire so we will try and dig up a few additional views. Thanks for your post
Thanks for the charts Dave. Interesting to see how the pace of decline and the volatility of that GDP graph has really settled down over the past few years.
surely we are due for a few updates post reporting season Tobes...
Yield stocks rallying... has the Canadian move got investors more confident on a domestic rate cut??
Surely the RBA will take a wait and see position so they can assess any impacts of lower currency and oil... I was strongly in the camp for a move lower but the moves in currency and oil have been significant and I suspect enough to hold rates for now
http://www.smh.com.au/business/markets-live/markets-live-banks-ride-again-20150129-3p1m9.html#post_live_192954 worth a read. The chart is excellent
For what it is worth I am expecting no cut but but as you say Jordan the language will leave the door open for a cut in March. I think the RBA will want to give lower currency and lower petrol prices sometime to work through the economy. Reporting season outlook commentary (in Feb) could well provide some insights.
Could be a strong day today Mathan. If the RBA opens the door for interest rate cuts the yield trade may well kick along regardless of the short term disappointment... Should be interesting to see either way.
No mention of housing investment in the RBA release...
This is definitely worth the few minutes it takes to read. Some very interesting views on US interest rates and the prospect of another round of QE in the US
Well done Matt, looks like some good results in there
Great resource Rudi - thanks for sharing.
interesting read Cameron, thanks for sharing.
Interesting article Stephen - always tough to go out there against consensus views in the market. It will take a little while for the effects of a lower dollar, reduced rates and any wealth effect flowing on from the equity markets to be felt. These could well be a 2nd half CY15 story.
Good read this morning Dave
Just seems like something to be mindful about. I have seen lists of top 50 dividend stocks flying around and half of them were in mining services or similar... A few non cash backed dividends starting to pop up as well
Craig this information on cash holdings and dividends is really interesting. Would be great to get a wrap on this once reporting season finishes.
Sentiment towards gold seems to have improved compared to mid 2014... The recovery in gold stocks in late 2014 early 2015 definitely caught some investor interest. Either way, articles like the one you quoted don't really help anyone and shows how data can be manipulated to tell the story you want. Sounds like there may have been another agenda...
Worley comments are interesting Niv
Here is the working link: http://qz.com/353286/no-big-bang-but-narendra-modis-budget-does-pack-enough-fire-power/
Did another friendly wager go down on the FMG vs CBA call?
Love the 5 rules of currency wars...
Good read James, thanks for sharing
great summary of the result, thanks for sharing
Good mail Jay, you beat my Bloomberg alert
Now you are just being cynical Henry!!
Something to bear in mind that Fonterra supplies 60% of China's dairy requirements. This is pretty big biz. We have iron ore NZ has milk! Interesting piece of information
Retail trade figures definitely going to be interesting. The anecdotal reports that came in during the Christmas period sounded strong.
Nice wrap up John
Great where can I find the data from the home loans and the outcomes from the business confidence survey
Jamos thanks for sharing, where did you get the info from? Is there a link you can share?
I would suggest it relates strongly to the operating cost environment for the Australian operations. Cost of doing business means that with the current gold price margins on domestic operations are being squeezed quite dramatically.
it really does look like the Gold cycle is unwinding and could gain further momentum in it's downward momentum. High cost gold producers are coming under intense presssure and I expect to see mine closures and job losses continue in the sector.
Full statement here http://www.rba.gov.au/media-releases/2013/mr-13-13.html
David do you have a preferred pick in the space, WIG seems to have bounced pretty well today. Also note PPT is well of their highs from earlier in theyear.
Thanks for sharing Dave and particularly relevant given the wasteland in the reosurces sector and the number of lemons that have been sold over the past few years. Are there some apples in the dust pile that you think have been overlooked?
James, do you think the backing of domestic super money chasing yield and earnings stability is enough to support the banking stocks? It looks like another rate cut is increasingly likely following the week jobs and consumer data making the yield in the Aussie banks appealing.
I feel like the Australian Housing Bubble argument is starting to get long in the tooth. The reality is that with only a few major centres of population demand gravitates towards these areas and holds up the housing prices. If you want to live in a city there are only a few options/choices available
Sam great to see you on LW, would be good to get a few of your thoughts leading into reporting season. Some good signs/trends coming from US markets but still very sloppy on the China front
send through some content from your site Pat
Highly likely we see a similar result on the ASX in the coming months. Plenty of quarterlies showing low cash balances and in many cases not even a full quarter of working capital. Expect plenty of consolidation talk at diggers this week
Could be well positioned for a strong second half after the release of today's China iron import figures.
Good performance in context of the current retail sentiment.
Gav, do you have a view on how the gold price is placed after the recent and quite dramatic pull back? It feels like things have settled down a little and potentially some emerging value in the sector.
Gav, I am going to be in Perth next week so very interested in what the conversations will turn out whilst I am in town. I'll be sure to let you know but something of interest to me is the funding coming into some of these juniors from the R&D rebates. Money that couldn't be raised in the market right now...
Well I would suggest we won't hear to much more of that post September and a change in the winds for resource stocks would be nice. Although the early gains have already been made from the recent lows in the likes of BHP and RIO
John, are you able to re post the link, I get an error when I try the link above?
This needs to see the light of day, great commentary
You could argue that this falls into the sovereign risk argument/discussion so often raised about investing offshore. Highlights the risks that exist domestically as well as offshore.
Gav it is a fair comment but the industry body also needs to accept/acknowledge that many investors are feeling hesitant after the recent rout. Resources is speculative and there are just as many sad and sorry tales on the investor side. The industry voice should pose a balanced view to lend credibility to these arguments.
Thanks Tony thanks for joining the community and look forward to your insights
Great news Simon! Can't wait for the first raising
Welcome to Livewire Jay and thanks for the contribution. We will be keen to see how this story unfolds.
Makes sense given that long lead time required for new nuclear power generations sources to come online. Although, the Aussie thermal coal market still showing no signs of recovery http://www.indexmundi.com/commodities/?commodity=coal-australian&months=60
Tony thanks for sharing and welcome to LW. It would be great to follow the progress of your portfolio through Livewire. If and when you have material updates on the stocks in your portfolio please give us an update so we can track the progress.
For four companies to make up 17% of an index as opposed to 2% previously seems like a big switch and could potentially lead to greater volatility in the index which I don't think the retail crowd would be to keen on.
This is a good point and I also think domestically the RBA is facing a bit of an issue with inflated housing prices and a resilient dollar. They have clearly stated that they feel the AUD is too high but with rates at all time lows property prices are starting to surge.
Jay what are your thoughts on how this will play out? Are we likely to see similar gamesmanship as per previous situations? I get the feeling markets may not buy into the positioning as much this time around.
More positive signs along with US stimulus and business confidence in Australia!
That is pretty interesting. So is the rationale rather that whilst the volatility is higher the reward (short term) is also potentially higher?
That is pretty interesting. So is the rationale rather that whilst the volatility is higher the reward (short term) is also potentially higher?
we are well overdue some strength in the junior commodity focused stocks down here. The issue we face is that a strong AUD provides headwinds for non mining/resources sectors.
I think there will be a few Goldies keen to see this happen Gav
Very god observations and interesting to see how the first point dominates the press once it comes into focus. I don't know if it will be as big of a political issue as last time around but you never know
Mate you must be getting pumped for the launch and plenty of media around on Bookbuilds + IPO's. Apparently 13 billion in the pipe to debut in the 12 months
Give us a few of your tips Tony
Gav, it would be great to get a few of your thoughts on equities to play an recovering copper price.
iron ore producers having a great time at the moment and prices remain well above most analyst forecasts. Chinese PMI looking strong so could support the IO price longer term.
There are some good ones in there Tony, I particularly like the money/sex appeal quote
Tony, this link looks like it has broken can you share again?
Further to my comments on M&A activity this is a piece on the IPO pipeline and M&A activity http://www.theaustralian.com.au/business/mergers-acquisitions/tide-finally-turning-on-ma-after-change-of-government/story-fn91vdzj-1226729552315
Going to be plenty of opportunity to give this a go in the coming months. IPO activity really starting to push along.
John, I am attending a resources focused investor forum for the next two days. One of the key things to take away for me will not be the company presentations but the sentiment of the investors and how full the room is at the conference. Speaking to the executives last night there is no doubt they are feeling fatigued from the past three years. I'll be posting updates.
a couple of balls in the air....
all good points Jay and you know if the media gets hold of it any single one of those issues could be enough to sppok investors. Interesting/regular conversations starting to emerge about how the US can bring itself off the current stimulus without causing a dramatic knee jerk reaction.
MQA conservative management and the better looking of the divestments from MIG. I've watched a few of their presentations and a big reference point fro investors has always been the change in volumes around trucking traffic on the toll roads. Should also add the Eagles are firming for Sunday, very strong against the Rabbits last week.
I love your bear picture, such a great reflection of your view on the market
sounds like assets for sale
sounds like some second tier assets coming into the market, just not convinced there is the appetite to pick them up
I am firmly of the opinion that people have underestimated the level of reliance the US economy has on current stimulus packages. The next round of negotiations on the debt ceiling may well highlight the difficulty the Fed faces in turning this money printing off.
Gave would be great to get a few more points on the Jameson story and anything in particular that stood out about the story for you
Simon, do you guys have a feeling/sense of when you will run your first bookbuild through the new platform?
Nice summary Jay, interesting to see the tech stocks getting sold so quickly and not a good back drop for the twitter IPO. I was reading reports recently that some expected the post float valuation to touch US$40 billion, this looks like a challenge in the context of the current environment.
I think personally it would bring stability to the world markets? The guy has to be kidding.... Although, as each day rolls by without a resolution we are definitely going to see spikes in volatility as the markets get nervous about this possibility.
you had the early mail on this today Damian!
some good quotes at the end too, I like the reference to real world economists
I am not much of an expert on the Forex business but keenly waiting to see how the float performs. There has been plenty of pent up tension and expectation that the IPO pipeline is about burst. This one is a decent size float to test that theory and the appetite of the investment community.
Always enjoy your wires John, I think the situation in the US is really a short term distraction and I doubt a US default is on the cards. What looms after the debt ceiling resolution is that tapering comes back into the minds of investors/media. Some positive Euro GDP and employment data would be a nice way to dampen any negative sentiment.
Henry, welcome to Livewire and thanks for sharing your blog. Entertaining read and the markets always need someone to help us see the lighter side. Look forward to reading more of your thoughts. Cheers, James
Definitely a little cynical Clarence but a fair enough point. Don't expect markets to always behave in a rational manner, however, I think the relief was in the fact that a default looks like an unlikely result.
Welcome David, look forward to following your contribution on LW
Cheers Alex, glad you enjoyed the session and we appreciated you making the effort to come up to Sydney. Can't apologise for the warm weather, comes with the turf.
Sloan, welcome to LW and thanks for sharing your update. Look forward to further updates on the markets when you have them available. Cheers, James
Good read Clarence, the Encyclopaedia Britannica joke is a corker
here is the link http://beeksdownunder.com/
Melbourne Cup day might be a bit soon but I think the commentary from yesterday's minutes will continue to push the dollar higher. Interested to see if auction clearance rates cool off in anticipation of rate hikes
As a result of this raising have you received more interest in the platform from brokers and also from companies?
Clarence give us an update from the Gold Symposium, keen to hear about sentiment from the event
8 from 8 is pretty compelling
Let's just hope he doesn't mention the cricket
This is a strength and a weakness for the Australian economy
So I take it you are bullish short term Henry ;-)
Comments earlier today about waiting for earnings to pick up resonate strongly with me. The asset price inflation on the back of govt stimulus makes me pretty nervous, especially when majority of people seem to be bullish. I may be sitting this one out for the moment...
Gav, do you think resources rally will flow to juniors or be isolated to producers?
I'm now interested in NFP for the first time, appreciate all the explanation and context
Still too early at the junior end Tony. I am concerned that strength in resources is going to be limited to companies that are in production or have mines that are about to enter production. Commodity prices need to recover substantially before exploration interest starts to really rev up. That being said starting to see some action in a few of the juniors and as a result the first (big) steps up in terms of percentage moves.
What about AUD strength? Or has the RBA shown their hand on this one?
What is your view on the impact of these levels for interest rates decisions? Looks to have moved pretty quickly since the governors comments last Friday and now with the taper pushed back looks like the AUD is going from strength to strength?
Link above doesn't seem to be working, try this one http://beeksdownunder.com/
Welcome to LW Julia, thanks for sharing and we look forward to hearing more from you. James
European growth has been the outsider in financial conversations. We have been so focused on US and China that Europe has almost been a secondary conversation.
Well said Gavin, a few upbeat commodity stories starting to show up even outside the iron ore space. The tin market really starting to look interesting although it could be manipulated quite easily.... Big piece also in today's Australian on a recovery in Zinc.
How does that compare with expectations?
Could the timing of big four bank reporting have an influence over movements in XJO for this period?
I've been hanging out for this one
As the Sydney property market continues at a Formula 1 style pace, it has been reported that 5 year old are now being bought houses by their parents!!!Investor appetite for houses from SMSF and overseas punters is running white hot. Better than an education??
Good start Michael, well done
So many players involved. Bega on the table as a possible target now
Jason, can we get a wire preview on some of the themes/stocks Nathan will discuss? Would be great for the LW community to get a bit of flavour for how II is thinking. Cheers, James
Would be great to get a few impressions on some of the better companies you hear from at the event John
John, thanks for the note. Did you get a sense for level of interest from investors? Were there opportunistic investors having a look?
The junior mining space has enough headwinds as it is. Certainly they have responsibilities socially and environmentally, however, with the exception of a rare few many mines run on the margin of being economic depending which part of the cycle we are in. The model you have alluded to would pretty much rule out progress for the majority of junior explorers.
so have they updated the figures on the Greek exit? From the reading I have done most commentators/economists etc say March is the likely inflection point?
plays into the hands of RIO and BHP. If they continue to focus on reducing costs and disposing of non core assets they will be well placed through a dip in prices. Gav are you anticipating a dip with a recovery or sustained lower prices?
Definitely a sentiment change floating in the wings, the 6 from 6 win rate is compelling but listening to plenty of participants starting to feel nervous about the current rally
Good report today Henry, tech stocks definitely bubbling. Starting to see tech stocks backing into resource shells....
Jay it looks like Twitter have taken note of some of the criticism following the FB IPO. Interesting to see the level of volatility in the FB stock price given the size (mkt cap) of the business. I think it demonstrates that the market still is unsure on the true value of these companies.
Gavin, what is the underlying asset in HIG? I am assuming copper/gold for PNA to take an interest.
The alternative to this is that many have now succumb to a short term view that normal asset valuations are being overpowered by stimulus.
Agree on the above, also interested in the China story. We are in November and the iron ore price + steel demand has been far more robust than many predicted and the PMI figures today again look robust. Also probably need to add some Melbourne Cup form guide research into the weekend agenda.
Steve's full run down is at 37 minutes on the following link http://www.brrmedia.com/event/116430?unique_ts=1385531186
I went shopping at one of the retail super centres over the weekend (JB Hi-Fi, Freedom, Harvey Norman etc). The place was packed with families and it wasn't just rubbernecking. I get the impression retailers are going to do pretty well over Christmas. Housing turnover means people want more white goods, televisions, furniture.... The level of activity definitely caught me by surprise.
$55 million cash at bank, receipts of $15mil for the last quarter and operating cash flow -$4.5mil. Pretty heady valuation...... quarterly from Septermber here http://www.asx.com.au/asxpdf/20131031/pdf/42kj0363f4trb1.pdf
Feels like it has better momentum than FB but the reality is FB is further down the commercial path that doesn't come without its headaches
Where did all the bears go?
At the expense of working Americans I would add
Matt, have you guys got any interesting companies coming through Shaw in the next few weeks?
Publicity driven by egos of politicians!
Chris do you guys hold XRO? I am not that close to the business but it seems to be grabbing a lot of headlines? Is the stock likely to live up to the hype in the valuation?
I should also add Graham Ascough is a good operator in my opinion. He had a good influence on Mithril Resources which has some interesting copper prospects in the NT.
John, I agree with the sentiment. Unfortunately this is a common feature of micro cap investing on the ASX. The companies fly under the radar of regulators and the talent pool of directors/executives is too shallow to match the number of companies listed on the exchange.
Sounds a bit more exotic than the exchange!
The market is doing a good job of reform by attrition at the moment. On the flip side the businesses worth holding are extremely cheap in this market. I have a gold one in particular that I am keen on, will share via full post in the next few days
The jobs data is definitely surprising. Almost feels like a bit of a hangover in what is otherwise some pretty positive looking data. China story getting surprisingly less airtime now that things have stabilised.
Just had a quick squiz on the ASX, looks illiquid (what isn't these days), however, holding up pretty well. I assume given the trading pattern that the stock is tightly held so minimal free float at this stage. Have had some dealings with Morrie Goodz who is on the board and is a decent and honest operator. Need to do some background on the asset as I am not familiar at all.
Looks like it has caught the eyes of the ASX as well http://www.asx.com.au/asxpdf/20131108/pdf/42kqbvl1y3048j.pdf
Thanks for sharing Henry, MQG looks really strong, the BTT result last week was also impressive
The Chinese social media market is a whole new world. They have. Three mainstream Facebook/twitter equivalents.
Also the businesses of today are playing on really strong trends. Mobile consumption, customisation, social engagement.... These are real trends that you can observe and quantify. Humans are clever, we have become adept at pealing money out of each others pockets. I am sure the clever cats at twitter will figure it out.
There is a few of them floating around at the moment in the tech space. The same can be said about all parts of the market. Take junior resources for example... If you take a retrospective view of what happened over the past 5 years in that space you could frame a similar argument. A few will make it and justify the valuations many wont.
Really Tom? 35 maps..... what is this website coming to?
Rod, the departure of Osisko from the funding agreement definitely gave the SP a cold shower on the back of good initial results. My understanding is that the next program will be twice the size of the maiden Tokop drilling. There were three interested parties on site last week looking at the project. I expect the next round of exploration to more extensive allowing for consistent flow of results. Something that has been missing over the past 12 months from GSC.
Ralph has stuck to his guns on this one, a genuine old school prospector
It is definitely a bit of a punt because Fairfax face really stiff headwinds and barriers to entry are far lower in the online news department. However, who else is investing the way they are in online news? They have an audience and a brand.... It is just taking some time for them to turn the ship. Just a thought
Yes fair point Rod. They do have a good track record over the years so worth giving them benefit of time.
Well one thing you can say about vaults is that they will be catering to the physical product rather than just ETF's
Bigger article in Bloomberg here, looks like sentiment is more widespread http://www.bloomberg.com/news/2013-11-10/hedge-funds-cut-bullish-gold-bets-on-fed-stimulus-outlook.html
Did they give a catalyst for the change and what was their previous forecast? I assume the timing of tapering has firmed in their eyes.
I had no idea the pricing for the two were linked, I would have assumed that the research was a fixed price for a period of time. How do fund managers feel about this and has it been a sticking point or do they see it as part and parcel of the system?
Good interview and echos sentiment I have heard a few times that the calls of a housing bubble are premature. Some interesting commentary on affordability and current levels relatively low compared to the past decade.
If you look at the jobs figures from last week and the trend in retail hiring + add the low level of CC debt you could quite easily build a case suggesting that retail trading over Christmas/Holidays could be quite good in the US.
Good points Jay. I am interested in the lowering of household debt and also implications for retail spending over Christmas. From someone on the ground in the states what is your take on sentiment and the likelihood that families will splash out a little over Christmas? Are the malls getting busy?
With a float of this profile there were always going to be people concerned about the valuation and betting against it. My view is that whilst there will be volatility in the stock price and perhaps a pull back at some stage the momentum is with twitter and the will continue to grow and innovate.
Nice work Michael, solid call.
Henry there has also been some interesting discussion around the impact that all these IPO's have been having on the market. I.E. pulling liquidity away from the secondary market as small cap fund managers are allocating their money to the IPO's. Your thoughts/experience?
Jim I agree with your comments about observing the trends in the jobs market. In my view it will be a case of observing a strong trend before the Fed has confidence to ease off on QE. What is do think also needs to be looked at is retail activity over Christmas, I think this will be a telling measure for consumer confidence.
Who says miners can't be yield stocks, BC Iron looking like it will pay 15% fully franked this year and sitting on a pile of cash. My concern with this one is that the mine life is relatively short compared to the majors. Is this why the yield is so high?
Tony, what is your take on the RMS situation at the moment? It seems like the disruption to production is not negligible?
What is your score Cheats?
Yes deadline for the Treasurer's decision is December 17th, should it go through the offer is open until Feb 28th unless the offer is adjusted.
Have a look at the post from Jay Soloff from earlier today. Raises similar questions but in the short term this looks to be direction that markets will continue to take. Interesting article on whether we are now in a position where bubbles are required to deliver growth http://www.businessinsider.com.au/do-we-need-bubbles-for-strong-economic-growth-2013-11
Article in today's AFR basically saying as the markets keep climbing investors are looking for new growth opportunities. The tech space is first cab off the rank in many peoples eyes. http://www.afr.com/p/business/enterprise/dot_coms_set_to_take_off_in_say_E90p8ZluhP5yvbb3dB588L
Hock, the link looks like it has been redirected? I wonder if the article got pulled down.
I just came across this one on Dropbox, apparently it is seeking to raise $250million with a valuation of $8billion. These online utility businesses are part of most peoples vernacular these days and have become an essential part of B2B interactions.
The bitcoin versus gold chart is a good one Henry. I need to see if we can get someone on LW to explain the mechanics of Bitcoin... Definitely a step too far for me
I think one of the differences is that people are addicted to mobile/social communication. Yes the valuations are pie in the sky and mind boggling but if I look forward 5 years I expect more people will still be using phones and social media. The commercial outcome is not about the particular social media but about engaging with and accessing the audience.
Here is an article on the retailers leading into Thanks Giving. Looks like many of them are seeing the opportunity to stay open and make some ground on what has been a soft year. http://finance.yahoo.com/blogs/the-exchange/here-s-the-real-reason-stores-will-open-on-thanksgiving-170735876.html
The question on timing in terms of dust settling on the resources sector is a big one. I got the impression from listening to Jeremy that he is still really unclear on this front. You can see his argument in play across some sub sectors in the resources space with Iron ore being the obvious one and tin to a lesser extent.
I find these stats so interesting. Do you look at intra month patterns? This from Coppo earlier this week. In the last 20 years the Australian market has this bizarre trading trend where it rallies briefly at the begining of November (which it did this time was up +0.25%) and then from there falls by a average of -1.5% between early November in to the 3rd week of November & then in the last week begins its big late November to the new year rally that happens about 88% of the time.
Great post John and this seems consistent with a couple of the wires in this mornings note. I.E. Emerging markets from Blackrock and the view from Avoca that an opportunity exists in small caps when dust settles on the resources space.
Greg, I have forwarded your question on to one of our members who works closely with Bitcoin and will probably be able to add some value to the discussion.
Interesting blog piece from BlackRock: Emerging market stocks have started to outperform developed market equities. We believe that investors should maintain a long-term overweight in EM stocks, but need to be prepared for significant volatility and focus on being selective in their country and company selection. http://www.blackrockblog.com/2013/11/27/emerging-markets-reemerging/?utm_medium=spredfast&utm_content=Blog&utm_source=BLK_Twitter&sf19984404=1
A house nearby where I live in Redfern went for $720k on the weekend. One bedroom, a shower in the kitchen and toilet outside in the courtyard. Hasn't been touched in over 60 years and will need thousands spent on it (6 figure type stuff) to bring it to a reasonable level. Hard to believe...
BTW - I like your end game for On The House, REA Group definitely would be looking for ways to consolidate/extend their position in the online real estate market.
and the motivation? Simply short sellers?
from Henry Jennings this morning talking of pokies I was amazed to read that 50% of facebook users are using social media gaming website too...should help ALL and AGI..pretty easy I would imagine to roll out the software online and do away with all those pesky venues and costly licences! Ninus, any mention of online rollout/opportunities for AGI?
On The one-armed bandit -
A really great summary John.
With the current budget pressures (e.g. Gonski) that are dominating political discussions you can imagine all expenditure/contracts would be under close scrutiny as well.
Great find Tommo, really interesting read.
Chris did you read the piece in The Australian over the weekend? It sounds like USD/JPY trade is getting some big bets. Do you have a view on the Yen and where it is headed in 2014?
How about asking politicians for more transparency in return for removal of a debt ceiling? Who is going to hold them to account for that? Seems like a win for Hockey if this gets through.
On Love this article -
The chart on margin debt vs real growth is a bit of an eye opener. If I stand back and look over the past few cycles you could mount an argument that growth expectations in general become unrealistic at a certain point no matter how much you try to stimulate economies.
Found it - very interesting. http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/10489613/Britain-to-get-gas-from-US-under-Ineos-Grangemouth-plan.html
Henry is there a related link or article to that last point in your note? UK business sources gas from Us shale would seem to be of more than just passing interest to the likes of Origin, Shell.....
I would say one of the major differences I observe between Michael's philosophy and that of Montgomery is the time frame that you place on an idea or trade. When it comes to the technical calls my observation is that Michael tends to have a specific time frame or outcome in mind (and this is usually stated). This tends to be a shorter period than the value investing style that Roger takes. Agreed - the property reference didn't quite make sense to me.
Big set of numbers on the employment front Jay. For those interested in the impact from an Aussie perspective Evan Lucas has put together a pretty good (an animated) overview on the following video link http://www.youtube.com/watch?v=fkrd7WgQrS8&feature=c4-overview-vl&list=PLR1_yjp01nYRbEQlTzhnHhLJpyR3_J0nK
OMB I am seeing more circumstances of brokers collaborating as joint lead managers on capital raisings. It used to be that brokers were pretty loath to give away any allocation but it seems more common for there to be a collaborative approach. Is this an industry approach to opening up demand for primary and secondary market raisings?
Thanks for sharing, great list to look through
This is definitely an interesting move Gavin. I haven't had a look at who the bidder is but an all cash offer definitely points to an opportunistic buyer. CLR was a market darling back in 2011 but has fallen deeply below the radar for the past few years.
Interesting points on the inventory Jordan particularly in light of the slightly disappointing sales that were reported over Thanksgiving.
Qantas and QBE halts come at a poor time for markets. Selling yesterday was on good volume so will be a great test of investors nerve.
hmmm pretty soft start, amybe punters think the Ashes will be wrapped up by the end of the weekend and are not banking on strong ratings.
Henry, maybe Qantas should do what the Australian sports teams are doing? Local in charge for a local business? I know it is quite a parochial view point but perhaps in the case of businesses that are close to the hearts of Australians (such as TLS and QAN) there are cultural nuances that are best handled by a national? Just a thought. The reality is there are some serious structural challenges in the airline industry and Qantas are exposed on most fronts (labour, currency, geography)...
Interview with Matt Haupt from Wilsons also suggests signs of economic weakness in the second half of 2013. Based on recent commentary from the RBA you would assume rates are on hold for now and perhaps the next big sounding board will be corporate earnings in February next year.
Chris, where is the best source for getting Bernanke's commentary tomorrow morning? Is there a live stream/call that people can listen to?
Looks like those long positions had their fingers on the pulse on either the outcome or how the market would receive the news.
It is almost a relief for equities that the Fed is now tapering. It sends a good signal on the health of the US economy, the start of the journey back to normal?
SPA has actually held up surprisingly well since it announced the transition a month or so ago. As you mention the difference could be the profitability of the business. Technology has evolved drastically since the dot com bubble so some of the parallels that are being drawn might not be as relevant this time around.
Sloan I am not an economist but I can definitely see a precedent or path being set in the car insurance industry. The ability for insurers to customise and reward clients based on their record, habits and behaviour is now a competitive point of difference. The variables, however, when it comes to vehicles are relatively uniform and easy to measure. Health/longevity/susceptibility for individuals is a far more complicated variable to measure. Regardless I agree with your sentiment.
Jim, thanks for sharing this article and all the best for 2014. Given the bite sized initial approach taken by the Fed in reducing stimulus do you think a June 14 date is realistic for the complete removal of QE? I agree with your views on the growth outlook domestically but the prospect of all stimulus being removed by June 14 seems unlikely to me.
here is the link www.beeksdownunder.com
Welcome back Henry and all the best for 2014 - hopefully a good one and perhaps a ski trip next year ;-). Interesting note from Chris Weston on the volume + drop in AGO yesterday. I know this is one you have followed (since it was well below current levels), I couldn't find any news to influence trade other than the price of iron ore. Thoughts??
So will the market react to these numbers or wait to get a gauge on Christmas activity?
So NEN has just come out of trading halt and the results have disappointed. The well is unlikely to be used for production despite the presence of hydrocarbons. Share price is off 70% in early trade. Copy of the release available here http://www.asx.com.au/asxpdf/20140110/pdf/42m20qjg71q0ys.pdf
Michael, what are your expectations for earnings season? There were a few downgrades in November of last year seemed to put a bit of a dampener on the market.
Hock, I don't have a strong view at the moment around the outlook for China, however, I do think that as far as the outlook for Australia over the next 12 months China will be a critical factor. Expectations on the commodity outlook (i.e. demand from China) are low, however, if we see some strength as we did with the iron ore price in 2013 it could go some way in assisting economic activity while non mining related activity (i.e. housing/manufacturing/tourism) hopefully maintains current momentum. China GDP figures are out tomorrow so perhaps the next place to look.
Did the speech live up to the title?
I think your comment about paying for talent is really valid here Jay. Competition for talent in the tech space is fierce and the need for companies to release, assess and then re release products is definitely talent intensive. The big players like Google, Facebook etc will always be buyers of the next big trend.
Maybe its thing to dust off these stocks...the dogs of 13 maybe the stars of 14!! Interesting to note on the front page of the AFR that the best performing Fund Manager for 2013 had no exposure to resources (similar trend for many in the space). Made me think it was time to start looking at some of the better quality tier two producers and see what has emerged post the big resources dust up.
interesting to note the WA still heading the states as the standout leader in this report. As mining projects moving from the construction phase and into production phase there still appears to be a significant wealth effect flow on into resources facing states. Similar comments noted from the Perth based brokers (Hartleys and Euroz) that clients who have invested in miners (i.e. producers as opposed to explorers) have still done well and there is somewhat of a wealth effect localised in these states.
Well this should give rise to an interesting discussion given Alex's post from last night suggesting gold has now run too far.
I think the RBA is more focused/fixated on the currency. Recent falls in the AUD in the context of historically low rates, in my opinion, will see current settings being the low point in the current cycle.
The stockpile of cash on company balance sheets has been an interesting theme to follow. M&A activity is one avenue along with the replacement of manufacturing equipment which is reaching historically old levels (i.e hasn't been upgraded for years). The question remains what will be the catalyst from a confidence point of view for companies to start deploying capital. Paul Moore (PM Capital) was of the view that until central banks ceased intervention corporates would sit on their hands and cash awaiting more clarity on the fall out of tapering etc
Mixed bag of results in the US is pretty uninspiring, makes it difficult for our market to march forward as we sit in the shadows of Feb reporting season.
It is quite bold for a company like CAT to come out with a call like the worst is over with respect to the mining slump. There isn't a whole lot of upside for them to provide that style of commentary so I figure they must have a degree of confidence in the sector to be providing that kind of commentary.
Good reading and thanks for posting. Very interesting to see the position of the broader UK housing market (as opposed to just London) and how much ground is still left to make up to return to pre GFC levels.
Plenty of commentators suggesting this will be the year for M&A activity. Would the ACCC have an issue with these two businesses merging?
For those interested in following the progress of reporting season Commsec have put together a good resource on the following link. Has reporting dates + consensus expectations from Morningstar: https://research.commsec.com.au/reportingseason
Gavin, CCU was the leading ASX listed Silver exposure for some time, however, had issues with resource grade last year. Do you have an alternative option from a listed company perspective or do you prefer the physical commodity?
Nice perspective on this one Jay, not the time to throw the baby out with the bath water.
You are not the first to ask the question Jordan.
Appreciate the support Rod - Looks like sentiment on the gold front has improved dramatically in the new year. Music to your ears no doubt.
If you listen to the plight of many traditional manufacturing businesses, such as the car makers, the currency is one part of the equation but there are other factors also influencing costs and consumer choices. Market size (i.e. small), high labour costs and disruptive alternative products are also placing pressure on the manufacturing industries.
Nice break down Jason and the table makes for some interesting comparisons. Mobile is definitely the way forward and you could argue that Linkedin has the most ground to make up in that space.
Good summary Chris, strength yesterday from ANZ again highlights how reliant on a few stocks the ASX has become. Computershare also reporting this morning, a stock expected to benefit from exposure to offshore earnings. Morningstar has earnings expectations of $.594/share.
Some strong calls Michael - congratulations.
Job losses continue to make headlines in corporate news particularly manufacturing and resources. Should we be surprised to see the jobs figure going up? I still can't get a clear view on where jobs growth is going to come from.... what else do we have/produce that the world wants? Not enough population/population growth domestically to take up the slack.
Nice note Peter - analysts already starting to indicate likely need to raise FY numbers and subsequent buy ratings on the stock. Commentary from management suggests there will be no loosening of the internal cost discipline and sweating assets even harder.
<iframe width=560 height=315 src=//www.youtube.com/embed/sepZC1gPGh0?rel=0 frameborder=0 allowfullscreen></iframe>
Hmmmm feels like momentum has come out of the markets for the moment.
Lots of interest in this result today, debt repayments during the year have been a feature of FMG market communications. BHP and RIO have both demonstrated their capacity to sweat assets and reign in costs when pushed. Interesting to see how FMG responds in comparison.
Market reaction to the Seek result has been positive with a number of brokers expecting to upgrade based on results + earnings accretive acquisition. This from Bell Potter Upgrades likely to FY14. Net profit guidance for 2H14 of a result slightly ahead of 1H14 ($87.4m) implies FY14 net profit above $175m, versus consensus of $163m and our forecast of $169m. SEEK also expects the pending JobStreet acquisition to be strongly accretive post FY15.
I was asking myself the same question yesterday Henry. The market is celebrating the BHP result but it makes you wonder why they weren't doing it for the past 5 years? Imagine how much cash would have been generated during the peak of the commodities cycle if these businesses had been run like they are being run today.
Good to see juniors getting some attention Gavin, probably one of the great baromters of investor confidence (risak aversion) is the appetite for higher risk equities. Lots of dividends to flow through over the coming months, most will end up back in super funds/DRP but there may be a little spill over for some of the juniors.
Or alternatively adjust our expectations on the life/duration of cycles.
Nice one Tom, how are they guaranteeing 7% annualised? Doesn't sound sustainable at all.
Agreed Matt - they have been very active in growing the business and have firmly stated aims of being a 500k Oz producer of Gold. They have a good track record on the production front and management appear to be energetic and focused. Maybe you can come back to us later today and give us your thoughts on the result and some of the highlights. Cheers, James
Good note this morning Jordan. We received some interesting anecdotal feedback yesterday from a group who have been doing business in China. Apparently, the locals have got a serious case of the gold bugs. Street dealers are offering 5% discounts on physical gold and seeing lines hundreds of meters long with people queuing up to purchase physical.
Paul, welcome to Livewire. Look forward to commentary and insights from Cielo Capital, cheers James
Paul I think there is an interesting opportunity here on both the company side and the investor side. As of 2011 Chinese made up 4% of the Australian population, this is a clearly a market that APX should appeal to. Secondly, if Chinese companies can give Australian domiciled investors leverage to the Chinese consumer market I think this is a theme that would resonate well with a good number of investors.
Lots of debate about how safe the we will do anything approach by the ECB is.
About to send my Leatherman back for a service. No matter how old or how banged up it is they will fix it and send it back to you as good as new. The true definition of a lifetime guarantee and some old school customer service and value.
Thanks for your contribution Pieter and I look forward to hearing more form you andf the team at Beer & Co. It is great to have contributors with your background and experience particularly in the resources space. Thanks, James
Chris, I picked this up from a Shane Oliver note; short positions in the Australian dollar still remain excessive and so it could still have a bit more of a bounce before the downtrend resumes. What is your view on shorts and how they are influencing the currency trade at the moment?
One of the things that stands out from the rush of IPO's at the end of 2013 is simply that things were done in such a rush. The IPO pipeline had been stagnant for years and when a few floats go off such as Virtus it must be almost impossible for funds not to participate. In fact we spoke with one manager who used the phrase get your allocation first and do the DD afterwards. Your description of information arbitrage is excellent, however, appropriate DD is the obvious input to balance this out. Tough when there is a rush..
Thanks for sharing your newsletter - worth reading.
Very timely Ellie - two posts this morning looking at debt in China, the Bloomberg piece most definitely references a Lehman moment.
Forge and Qantas stories are both disasters for the workers and for shareholders - what a mess.
Dean, are you able to give me a quick run through what the Demand Driven Funding Model is?
Jordan, well done on your article, plenty of time, thought and effort has clearly gone into that.
This was from one of the exclusives just last month, Justin Braitling believe that after a two year bear market there are some select opportunities in the resources sector. These are a few of the stocks and sectors Watermark holds Orocobre (Lithium), Tiger Resources (Copper) and Base Resources (Zircon). Full discussion here http://youtu.be/rnN81drQWC8. He also thought the uranium space was looking interesting.
John, what is your read on the data? I have seen a few comments suggesting there could be some seasonal factors influencing the results and understating activity? I know these reports are notoriously inconsistent and often get revised. See this article from CNBC: http://www.cnbc.com/id/101454515
Apologies folks this should be the link for the video: http://youtu.be/ecYMcdb4p34
60% of Dominos sales in Australia are now ordered online. For a humble Pizza shop that is an incredible statistic and demonstrates the successful transition into a mobile/digital economy. They also increased the dividend by 14% and in Japan they have just displaced Pizza Hut to become the 2nd largest Pizza chain in the country.
Well done and some quality companies in there.
Jim I really enjoyed your article today and will be watching the bottom end of the GDP guidance closely tomorrow.
There certainly was, it was from GMO. Clearly the guys at Perpetual feel otherwise. Also worth noting that they need to be invested as part of their mandate so they don't have the discretion that some individuals or firms might have to retreat to cash.
Hock, you would enjoy the article from Jim Vrondas on the currency - similar senitment.
we've seen investors really seek income assets in preference to growth assets. - Based on the recent reporting season you could argue the dominant iron ore exposures in Australia are likely to be viewed by investors as income exposures moving forwards. There are plenty of forecasts suggesting iron ore will $80 - $90, however, following the cost out process from the major miners and the debt reduction programs I would suggest they are braced for lower prices in the medium term.
Really enjoying these morning summaries Chris.
These deals need to get announced to the market but I often wonder if they actually add any value. They are never binding and the offtake partners often draw out and protract any negotiations if they eventuate.
There is definitely something skewed with the S&P ratings. However, I would say the impacts are even more pronounced at this point in time due to the scale of the decline in valuations for many resources companies. I would argue that the de facto sell/buy recommendations would be viewed by some investors who are benchmark/index unaware to gain some advantage.
The fact that the phone becomes the coupon is a great innovation. Very interesting stat from your article, we check our phones 150 times a day or about once every 6.5 minutes, it is with us all the time and helps us to discover new deals. With digital coupons you no longer need to carry around paper coupon cut outs for your purchases.
Henry that Donaco call has been excellent. I had a look over their website and some of their presentations to get more of a feeling for the business. Apparently there is growing demand/competition between tour operators in China to lock in hotel beds so they can bring tours into the country for gambling junkets. The poor man Macau... Big market right on their doorstep.
It is a good article, with all the additional money being spent on the malls I wonder if there is a precedent for expected returns for the retailers that end up letting the space. I would also suggest a fair assumption that the investors backing the developments are expecting a rosier retail environment in the coming years.
I think that will be quite a useful analysis for a number of people John, thanks for sharing.
Market has looked at those figures like a bit of a speed bump. A short sell off following the initial release and things have pushed on since then. Perhaps investors think that the China relationship is being diluted by positive outlooks in developed economies such as the US. Or expectations broadly are already lower than consensus forecasts?
Jordan, it is an interesting article but it looks to focus mostly on cash flow and some of the accounting nuances around describing this. The last few years has been about cost out so profits have been posted on the back of declining revenue in many cases. My understanding is that there is significant amounts of cash already sitting on corporate balance sheets that has been held back over the past few years. Although the last chart is definitely not showing new investment taking place.
Come on Alex - I think your getting carried away with all the baseball from the weekend ;-)
I am no where near as much of a gold bug as you guys but I did take something away from the Saxo Bank post from Friday. 1) No fresh buying since late February (i.e. only short covering 2) Physical demand tapered dramatically at the $1300 level. I am sure there is more at it than these two anecdotes but they both seemed to add up for me.
A few nice wins in their Henry, nicely done and nicely timed.
You could go on forever debating that question and when politics come into it the arguments become even more heated. You can't discount Government intervention, however, 2021 is a fair way down the line and a long way from the strong trend in data consumption that we are seeing today. The TPG result today along with the content piece from K2 both highlight how late NBN will be coming to the party. Myopic policy keeps nimble competitors in play.
Enjoyed your write up on Peter Birtles this morning Dean. Simavita is one that Alex Cowie has followed a little, I suspect he will have more to add on this front.
Nathan, thanks for sharing and a very interesting article. The rise of solar in Japan is a really interesting development in response to the Fukushima disaster and is a great example of the role that renewable energy can play. Your fifth point - on Carbon reduction is definitely the most politicized and conflicted when it comes to a consensus of opinions. Hopefully some other nations will be able to execute and demonstrate a path forward that will generate sufficient buy in from Australia.
Thanks for this Jay, very interesting to see the next round of earnings. I wonder if any disappointments will be put down to the weather?
Here is the link to the full report https://www.baillieuholst.com.au/publishedresearch/Sector%20Reports/SunsetStrip.pdf
I have definitely had that experience as an individual investor - particularly when there seem to be lots of really small parcels of shares on offer. Small parcels, big spreads and plenty of volatility. I just took it as part of the fate of being a retail investor
The presentation including slides are available on the following link: http://www.brrmedia.com/event/121891/ipresenters-i-bdr-chris-catonb-chief-economist-at-btfg-bcrispin-murraybhead-of-equities-at-bt-investment-management?popup=true&wl=660
Matt, thanks for sharing this. What were your thoughts on their results last week? Also, what are the implication on the corporate front of the Soul Patts shareholding?
Mathan, thanks for sharing these reports. I am sure that these are going to be a great addition for our audience who are keen to get a comprehensive wrap on the days activities. Much appreciated, James
Jay, what about seasonality in consumption trends in the US? I read an interesting piece a month or so ago saying as the weather improves through summer there is a seasonal (and noticeable) increase in consumption. Is seasonality going to be outweighed by supply?
I tend to agree with you on this one Dean, however, the one point that gets me concerned is interest rates. Given they are at historically low levels the capacity for individuals to borrow has gone up dramatically. Additionally, with the fierce competition between banks for mortgages I would hazard a guess that lending standards may be getting a little loose in some areas. Should inflation kick in, followed by rising interest rates there would be a substantial cooling in property prices. This scenario feels a little way off yet - but certainly not out of the question.
Thanks for sharing Pete - a long call on the AUD at these levels would probably have surprised quite a few people if you were to have told them this would be in play late last year. Interesting to hear comments from the RBA today
BTW welcome back, hope you had a good trip.
I have read a couple of quite bullish reports on CSR of late, although the broker community appear to be divided. It sounds like they have some optionalility with respect to divesting a number of assets within the business (they have a holding in a non listed Aluminium business caled Tomago). Additionally the balance sheet is incredibly strong with vbery little debt. The stock is up 191% since July 2012 - still well short of the pre GFC high of $8.66.
Try getting in to Sydney airport on a Sunday evening - nightmare with the traffic. I don't know a single person that likes the experience with the taxis either.
Chris do you have personal view on the payrolls figure? I note you have been pretty spot on with the past few reports.
This is a great little video package and excellent access to this presentation. Hopefully you have a few more of these to come over time!
This is the correct link: https://www.youtube.com/watch?v=Rmj3g3WAi7k&noredirect=1
Here is the article: http://www.cnbc.com/id/101395956
I suspect market is also focused on user acquisition and retention. This article was from late Feb but the essence is that Twitter was priced for perfection as a mass market platform. Latest user acquisition numbers was less than perfect and raised a few alarm bells.
That stock overhand would definitely be a concern, seems like a very short escrow period,
Good information from that survey John, this anecdotal style information certainly helps to build the picture on top of the other data points such as the jobs report.
At our launch in October last year I was interested to hear Peter Morgan say he was lucky/happy if he got 7 out of 10 calls right. Over the weekend Colin Bell told the AFR he thought Charlie Aitken did a great job by having 6 from 10 good ideas a week. Hindsight is very forgiving, but I am sure there are just as many people who appreciate getting a wide range of opinions - even if there are a few clangers in there. Interesting fact - Buffett underperformed the S&P 4 out of the last 5 years.
Can we speak with Kevin or Paul to get some more info on the fund and the raising? Have you appointed a lead manager?
Matt, is this a trade based on fundamentals or more a case of their being a trigger that could bring technicals into play? Any reason as to why the stock has been languishing of late?
It is interesting if you look at the other bids over the past few months they have been hotly contested with plenty of offshore interest. But is retailing strategic/growing in Australia? No doubt DJ's is a premium brand but is Aussie retail that strategic? If it is just a property grab perhaps HVN is also being looked at?
This is great - how do you think the offer stacks up Pete? Do you think another bid id likely to emerge?
I thought you were mad at the time.
With commentary like that the Fed really is just giving markets no reason to take a breather. Unbelievable.
So Dean I spoke with Scott Power - on the escrowed shares. His view is that not all come out of escrow in August (only some). The holdings are mostly with the practitioners who are business owners and operators. He says that whilst there may be some selling it is unlikely they would look to dispose of all their shares. He was looking into this further himself, but didn't believe it was a cause for concern.
On 3 views on Virtus -
We didn't touch on it Dean, but it sounds like a fair question. I'll see if I can get a few answers/views for you.
On 3 views on Virtus -
With the funding issue faced for cleantech in Australia I really would have thought many of these industries such as Geothermal, Solar etc should be looking at aggregation of resources. There simply isn't enough Govt or Private sector support for these projects to operate individually.
That is well above many of the forecasts and definitely looks to rule out the chance of rate cuts. Almost seems too strong to be true...although pleased to see job creation. Very interesting
Two back to back bullish days, take over activity followed by those jobs numbers.
It is hard to replicate once in a cycle discoveries - think about how much money gets put into exploration across Australia yet so few discoveries get up and into production.
Nice wrap Mathan, from an anecdotal point of view our morning note has been getting more out of offices during the course of this week with a clear peak today as people check out for Easter.
I think that is a better sign than being financed from offshore via an off-take partner. I have seen too many examples whre these negotiations become quite protracted and then the terms of the deals shift and the junior companies (which Padbury is) end up getting stranded. Interesting to see how this plays out and quite a bullish sign for longer term commodity demand.
This is a very significant development for the region and there are plenty of assets sitting in the mid west that need a path to market. Any detail on who the financiers are? How secure are these funding agreements?
Were you able to work out a win rate for a positive return over this period? I.E. Out of the 32 observations how many times did the 20 and 40 day returns deliver a positive result?
Handy little interview on that link.
John, I followed this stock very closely for a long time. I must say I didn't realise how much expectation was built into the offshore drilling in Vietnam. I was really surprised at how heavily the stock got sold off post the failure of the offshore drill program. Like many investors I tuned out following the disappointing results. I'll need to have a look over the new strategy - sounds most unlike management.
The other outcome that we are observing now is more Australian managers created options for investors to get access to investments offshore via the ASX. There have been three possibly four new LIC's offering international exposure listed in the past year. The more articles like the one above that get published the more comfortable Australian investors will become with investing offshore. However, I concede the point that the weight of money going into Super is likely to outpace a significant shift in investment flows.
It is all there Mathan - at least for a short term wobble
This is a great little chart John, it actually draws a nice parallel to the commentary that Tom shared via JP Morgan.
It's great to see a good result, couple this with the DJS bid and there are some pretty bullish signs. I just was a little surprised to see such a strong reaction after a number of pretty soft/muted floats at the end of 2013.
That was was always expected to go well, but I didn't think it would run as hard as it has. Is that reflective of a lack of supply or could the pricing have been a bit sharper?
MG nice debut and thanks for sharing your blog. What is you definition of a fogey? Is this something that used to be a tech stock but has stood the test of time and is now part of our everyday lives?
I was thinking to myself as I sat in a cab this morning that the airport we have in Sydney is underwhelming for the population/demand. 6 lanes go into 2 lanes and at 545am it was jam packed trying to get into the airport. The lines at both JetStar and Virgin were ridiculous - it really felt like a squeeze.
Folks apologies on this one - the new listing mentioned above was Virtus not Sirtex.
I enjoyed that one as well Matt, quite a good little summary.
Tim, thanks for sharing. Kennards and Storage King are two of the big names that come to mind in this space. It seems like the baseline offering across most of these businesses would be pretty similar and therefore I imagine there would be some benefits in scaling up as much as possible - does the sector lend itself towards consolidation?
UBS upgraded Woolworths to a buy rating on Thursday with a price target of $39.20. Some of the points they noted were lifting sales on a square meterage basis, new store roll outs and improving margins at existing stores (through volume and cost outs). Interestingly UBS see inflation kicking in leading to increased food prices in the years ahead - this is a god thing for food retailers (not so great for the consumer).
Interesting John, can you break this out into individual commodities? Or is there too much volatility?
Good result overnight as well, looks like it may have turned the corner
Folks this link is broken - you can access the State of the States report on the following micro site: http://www.investing.commsec.com.au/stateofstatesapril2014/index.html
Jason, I really enjoyed this blog post, thanks for sharing.
Bank results later this week will be interesting. In the absence of really regular corporate updates and with the weighting these stocks have within the markets they will definitely be a point to focus on - looking forward to seeing how these results come in.
Tim, I have a question on the yield with these REIT's. In your view is there an explanation for the higher yield often seen with REIT's compared to other dividend paying stocks? I.E. Does the market discount the reliability/safety of their distributions? If so is this justified? Thanks, James
Great read on short term rates Tim, interesting observations on the jobs market and some useful charts.
Dan - quick note to say great work on the Bloomberg Visual Data piece that you shared yesterday. I always enjoys those pieces when they come through.
PT - does this scenario hold strong even after a clanger like today?
Mathan, I take it you guys have moved to a bearish position across most discretionary retail for the moment?
The Morningstar forecast is pretty bleak - Analysts at Morningstar are extremely bearish on the stock. Not only have they slapped a sell recommendation on JB Hi-Fi, but fair value is estimated at $11, a discount of nearly 50 per cent to the company's current trading range, which is broadly in line with the consensus 12-month price -target of $20.68.
Nice work guys great to see another raising via the Book Build
Interesting to see that BHP and RIO seem to be holding up relatively well compared to pure iron ore plays like FMG, AGO and BCI.
Reading an article right now that names BCI as a top 10 yield stock in the mid cap sector. The stock is nearly yielding 10%. Either the market is still overlooking this one or they don't believe the yield is sustainable.
could be a replay of yesterday
Thanks Mathan, drop us a note when you swing through Sydney on the road trip.
Nathan, I really enjoyed this wire on energy efficiency. Do you think you could put together a wire covering a specific stock thesis in this space that you are happy to discuss? Perhaps an example of a domestic stock that has the attributes you describe in your energy efficiency discussion?
There are definitely some pretty polarised views in there. The call on unemployment spiking in the US is an interesting one particularly given last nights FOMC minutes seemed pretty calm on that front.
Jay did you watch the video from Frank Shostak? Quite a polarised view from what the data seems to be saying right now. Are you aware of similar contrarian views being discussed over in the US?
Jason, I note at the bottom of your article Decisive doesn't currently have a position in LVS? Are you working through a process on this particular company or is a new theme that you are following?
This is clearly a game for the big oil and gas companies. The cost of technical failures on junior companies is too much of a burden for them to sustain.
Good news for Tiger Resources, I saw this release come out yesterday and there is a little video of the production process here: https://www.youtube.com/watch?v=hDvAJkdNrj8 . Does Canaccord have a view on the outlook for Copper?
An interesting point John. Take a side step into the medical industry where doctors are increasingly fearful of litigation and as a result the health system is being clogged up with unnecessary and referrals so that doctors are covered on all fronts. This is coming out of tax payer money in most cases and causing congestion in the public health system. So much scrutiny that the system no longer works.
Rudi, some interesting trends in the results. Thanks for sharing and writing up the results. Out of interest from the historical surveys it doesn't look like the cash balances vary too much? Have you seen periods where cash balances fluctuate dramatically from this survey?
One of my favourite posts every month!
Mathan, with the timing of your calls in the attached report (pg.3) I am assuming the green lines reflect long calls and the red short calls?
ok so based on that can I pick up your short term changes in positions from the language in the Sunset Strip? I.E. when you turn positive or negative intra month is that effectively when you are calling those short term position changes?
Indonesia is a tough sell for investors, they seem to make a real habit of staying in the headlines for the wrong reasons, especially when it comes to resources.
activity on the market right now suggests the theme is well and truly in motion already.
Mathan, I note that FLT had a little run up despite the recent mild earnings downgrade. Do events such as the downgrade have an impact on quant targets? If so have you adjusted this latest update?
I suspect it may be a little tongue in cheek
The proposition for development of this asset really looks challenging in the current environment. It is hard to see negotiations and commitments on the infrastructure side to move quickly with the current weakness in iron ore prices.
This stock has performed pretty well over the past month or so. What was the feedback from the recent investor presentation?
From memory Gav they have spent quite a bit of time and money exploring the region already. I know it can take a long time for discoveries to eventuate - but they have given that Springfield project a good run so far. I guess it is all in context to the size of the land holding.
interesting move on this one in the past few days. Looks like Sandfire are moving pretty quickly with their first diamond hole.
Good article John and an interesting read, thanks for sharing. The tin market is also pretty opaque which I think adds even further complexity to this discussion. Peter Kettle and the team at ITRI seem to be the only regular voice on price forecasting in this market.
Good article Gavin, it certainly makes it difficult for explorers and even mid tier operators to attract capital. I think numbers like this must really underpin the logic behind growth strategies such as the one being employed by NST. So much cheaper to buy these operating assets than to dicover and develop new resources. Probably a good long term sign for the gold price
I thought it was ironic that the KMD downgrade comes as we get hit by massive snow storms and cold winds. I suspect KMD will do decent trade over the next few days.
Good chart Jordan. That period from 2000 - 2010 really stands out on the expansion of debt. Also looks like a significant period in growth for gold ownership.
Great article Rudi and the charts feature looks to be a good addition. Very timely ahead of reporting season!
Gav, with the remote nature of this project I get the impression GOR is more vulnerable to gold price fluctuations than some other stocks due to the large capex likely to be required. What sort of scale (in terms of ounces) is the Company targeting and likely to need to justify progress toward development scenarios? Is the resource good enough to attract a major?
Interesting as rates is the one thing investors down here are suggesting is one of the big potential issues the equities markets face.
Folks it looks like the link in the article above isn't working - please try this one: http://shares.intelligentinvestor.com.au/articles/394/10-Lessons-from-the-past-10-Years-10623356.cfm
Very serious photos Steve!