Opinion
Marcus Tuck

Bloomberg keeps a regularly updated list of the world's wealthiest billionaires on their website. The current Top 10 can be seen below. What is interesting besides the sheer scale of the numbers, is the dominant influence of technology companies. They are responsible for 6 of the Top 10 fortunes, specifically... Show More

Equities
Marcus Tuck

Around this time of year, for the past two years, we have published on Livewire the results of our quant screening of Australian stocks, in search of companies that meet our particular metrics around valuation, expected EPS growth and balance sheet safety. One thing they all have in common is... Show More

Marcus Tuck

Following the traction Citi achieved with their Global Bear Market Checklist, which is based around the MSCI All Country World Index, Citi have introduced a similar Bear Market Checklist specifically for the US S&P 500 Index. It is built around the same framework of 20 key variables designed to help... Show More

Marcus Tuck

Equity markets are inherently volatile. The flip side of a higher long-term return is higher risk. Circa 10% corrections are not uncommon for equity markets. When they happen they are invariably accompanied by calls of a bear market coming ahead of an impending recession. Occasionally, those calls are right, but... Show More

Marcus Tuck

The S&P 500 Index has finished lower in September more than any other month, or 55% of the time, for an average return of negative 1.01% according to Dow Jones Data Group. Their seasonality chart reproduced below shows the average monthly returns for the Dow Jones Industrial Average, the S&P... Show More

Marcus Tuck

As Warren Buffet put it best: “Price is what you pay. Value is what you get”. And just as an individual share price can be disaggregated into earnings per share (EPS) times its PE ratio, the same thing can be done at a market index level - as we discuss... Show More

Marcus Tuck

When looking for growth opportunities in the equity market, a common approach is to look for sectoral growth themes expected to provide a tailwind to revenues for years to come. However, in many instances, the “new age” sectors with the brightest growth narratives are populated by companies that are not... Show More

Marcus Tuck

John D. Rockefeller once said: "Do you know the only thing that gives me pleasure? It's seeing my dividends coming in". Mr Rockefeller was perhaps a little too fond of his dividends, but they are an important component of total equity returns, particularly in a high-dividend-paying market such as Australia's... Show More

Marcus Tuck

Buybacks can support stock prices by reducing share counts and boosting earnings per share, although that is no guarantee of producing a rising share price. Fundamentals such as revenues, underlying earnings trends, competitive prospects and interest rates still count for more. Show More

Marcus Tuck

The FAANG stocks (Facebook, Amazon, Apple, Netflix and Google/Alphabet) led the market up and participated in the recent correction. Their latest profit reports are an important guide to the sustainability of the tech sector's rise. Here we argue that on a Price Earnings Growth basis, they still look sharp. Show More

Marcus Tuck

The problem with most economic data and company profit announcements is that they are backward-looking, while the share market is forward-looking. That is why we place so much emphasis on leading economic indicators that are designed to lead the business cycle by up to a year. Show More

Marcus Tuck

The All Resources Index in trend terms has been outperforming the ASX 200 Index since the start of 2016. In this note we compare the performance of the big Australian mining stocks against their international peers on a common-currency basis, as well as comparing their current valuation metrics. Show More

Marcus Tuck

The copper price is often regarded as a barometer of the world economy because of its wide-ranging applications in industrial production and electrical equipment. Copper is used everywhere from homes and factories, to electronics and power generation and transmission, so demand for copper is often viewed as a reliable indicator... Show More

Marcus Tuck

This time last year we published an article on Livewire called ‘Screening for low-risk equity investments’. Of the seven stocks we discussed, most did well, with an average gain of 90% across them. Livewire got in touch and asked us to reflect on the original research, and reapply the strategy... Show More

Marcus Tuck

Three key indicators we focus on for a health check of the US equity market are: 1) The direction of US leading economic indicators (as a guide to future earnings); 2) The slope of the US yield curve (as an early warning of recession risk), and 3) The US equity... Show More

Marcus Tuck

Straw hats are cheaper to buy in winter, and the best time to repair a leaking roof is when it's not raining. In a similar vein, when market volatility is low and inexpensive, it's often a good time to buy some protection for equity portfolios to guard against "X-factor" downside... Show More

Also worth reading the company's response in this announcement to the ASX: https://www.asx.com.au/asxpdf/20190326/pdf/443s4gcpwv1yvk.pdf

On The only 4 stocks to pass our filters -

Thanks Michael. Yes, the Conference Board publish leading economic indicators for several countries, including Australia. You can see them at : https://www.conference-board.org/data/bcicountry.cfm?cid=1 Regards, Marcus

On Why the equity market should resume its advance -

It’s a fair question about Jumbo’s economic moat. Whilst it’s true that the lion’s share of JIN’s revenue is Tabcorp-related lotteries business, it appears to be reasonably secure. In May 2017, JIN expanded its decade-long commercial relationship with Tatts Group, with an extension and expansion of its existing lottery reseller agreements. All current reseller agreements (NSW, Victoria, SA, NT and Fiji) have been extended for five years and then continue on a 12-month rolling basis beyond 2022. The relationship was further strengthened by Tatts subscribing for a substantial shareholding in JIN. Tabcorp is currently the second-largest shareholder in JIN (12.64%), which should encourage strong alignment of long-term interests. The former COO of Tatts is now the MD of Lotteries & Keno for Tabcorp, where JIN had a close relationship with the previous Tatts executives. A competitor, Lottoland, which offers derivative-style products on lottery outcomes, was recently banned from offering any products on the outcomes of Australian lotteries, further strengthening JIN’s competitive position. A small but fast-growing part of JIN’s business is Charity Lottery sales, which represents a key growth area away from traditional lottery offerings. Regards, Marcus

On The only 6 stocks to pass our filters -