Patrick Poke

Patrick was one of Livewire’s first employees, joining in 2015 after nearly a decade working in insurance, superannuation, and retail banking. He is passionate about investing, with a particular interest in Australian small-caps.

Expertise

Key stocks and ideas from the WAM presentation

Patrick Poke

Wilson Asset Management held their shareholder presentation in Sydney today. Chris Stott, Catriona Burns, and Matt Haupt all took the stage this morning to share their view on the markets, their top themes, and a few stock ideas. Here are the highlights. Show More

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The ultimate guide to data feeds and stock tips

Patrick Poke

One of the biggest problems facing retail investors is accessing quality information. Sure, you can look through the last five annual reports and manually extract the data, but this is tedious and time consuming. Free services like Yahoo Finance offer some help, but the data quality is often low, and... Show More

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Berkshire AGM: Key quotes and take-aways

Patrick Poke

Berkshire Hathaway held its AGM in Omaha, Nebraska in the early hours of Sunday morning local time. The annual ‘Woodstock for capitalists’ continues to draw huge crowds hoping to hear the wisdom and wit of two of the world’s great investors. Show More

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10 LICs trading at a discount

Patrick Poke

There are a range of brokers and researchers who produce regularly monthly or quarterly updates on the LIC sector. While the quality and depth of the research available is excellent, providing complete coverage of over 100 companies and trusts takes can take several weeks. Show More

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7 pieces of wisdom from the 2017 Berkshire letter

Patrick Poke

The latest Buffett letter was released over the weekend. At 17 pages, it was shorter than we’ve become used to, but there was no lack of wisdom flowing from the 87-year-old from Omaha. Notably absent from this year’s letter was any discussion of the Wells Fargo debacle. Buffett has a... Show More

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Howard Marks: The Bull and Bear cases

Patrick Poke

Following Marks’ last memo, many media sources (though not this author) reported that Marks was ‘ultra-bearish’. Some even went as far as to report that he’d said, “it’s time to get out”, when he’d said quite the opposite. In an effort to set the record straight, Marks’ latest memo looks... Show More

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5 (and a half) educational articles you loved last year

Patrick Poke

Reading the latest stock tips and macro calls is fun and useful for generating new ideas, but educational articles offer real long-term value. As the proverb goes: “give a man a fish and you feed him for a day; teach a man to fish and you feed him for a... Show More

Charlie Munger on Bitcoin: “It’s totally insane”

Patrick Poke

Berkshire Hathaway Vice Chairman, Charlie Munger, is not known for his subtlety. In a recent conversation at the University of Michigan, Munger was true to style and has some fairly strong messages for cryptocurrency enthusiasts and novices alike. A transcription of his comments on Bitcoin is available below, or you... Show More

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The most popular company you’ve probably not heard of

Patrick Poke

For the last three years, I’ve sat down with the results of the Livewire Reader Survey in January to analyse the data. With over 2700 responses, this year’s generated four times as many responses as last year, and now marks it as the largest survey of active investors in Australia. Show More

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Themes and stocks from the WAM Funds’ portfolios

Patrick Poke

At today’s WAM Funds presentation, Chief Investment Officer, Chris Stott, shared some of the key themes and holdings from their current portfolio. He covers their views on the Australian economy, mining services, and retail. He also discusses a company that hadn’t received a visit from an analyst in two years. Show More

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Kerr Neilson: Risks and opportunities in today’s markets

Patrick Poke

In a recent presentation, Kerr Neilson, founder and CEO of Platinum Asset Management, told the audience that the current economic environment is in a “situation that is actually quite rare.” Almost all economic indicators are “extremely positive”; everything from global PMIs, to metal prices, oil prices, and even company earnings,... Show More

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Australia’s infrastructure boom is coming

Patrick Poke

As the housing construction boom comes to an end, the obvious question for investors is ‘where next?’ One potential opportunity lies in transport infrastructure construction, which is poised to double over the next few years. Between roads and rail, annual spend is expected to increase to $16B by 2020. Show More

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What year is it again?

Patrick Poke

Billionaire value investor and hedge fund manager, David Einhorn, said in an investor letter this week: “The market remains very challenging for value investing strategies, as growth stocks have continued to outperform value stocks. The persistence of this dynamic leads to questions regarding whether value investing is a viable strategy." Show More

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ASIC’s golden rules of investing

Patrick Poke

It’s ‘World Investor Week’ this week, and ASIC have put out some practical tips that are worth keeping in mind, even for experienced investors. “Smart investors don't rely on good luck; they plan, research and understand their investments and how they fit with their financial goals”, was the message from... Show More

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Avoiding the losers from self-driving cars

Patrick Poke

At their recent adviser briefing, Magellan CEO, Hamish Douglass, had cars on his mind. Specifically, driverless cars, and what they mean for investors. While many investors focus on the potential upside in companies like Uber and Tesla, Douglass’ focus on capital preservation means he was more interested in the flow-on... Show More

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Marks: 'I was wrong about Bitcoin'

Patrick Poke

Howard Marks expressed concerns over a range of different assets and indicators in his last memo, which caused quite a media uproar. So he’s expanded and clarified some of his views. More interesting though, was his change of opinion on Bitcoin. His key quotes from this new memo are below. Show More

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Is there value in the ‘tech titans’?

Patrick Poke

On the topic of valuation, Professor Aswath Damodaran is one of the greatest communicators of our time. Recently, he sat down with another famous NYU professor, Scott Galloway, to discuss the valuations of some of the world’s leading technology companies. Professor Galloway is known for his engaging TED-style talks where... Show More

Beyond the Jargon: Averaging down

Patrick Poke

A stock in your portfolio has fallen 30% since you bought it; is the market telling you something, or is it just better value than before? This is one of the most important questions an investor faces on a regular basis. Averaging down is when an investor buys more stock... Show More

On the ground at Dreamworld

Patrick Poke

It’s been about five months since the horrible tragedy at Dreamworld (owned by Ardent Leisure Group) claimed the lives of four Australians. I recently visited Dreamworld on holidays, but as a believer in the Peter Lynch philosophy, I couldn’t pass on the opportunity to have a look at how the... Show More

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Beyond the Jargon: Short Selling

Patrick Poke

Short sellers are not the most popular participants in financial markets. Investors may recall that during the height of the financial crisis in ’08 and ’09, short sellers were blamed for some of the volatile price movements, particularly in major banks, and short selling was subsequently banned in many developed... Show More

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Hi Mahala. I can certainly understand the frustration of not being able to access the Brunswick Fund. We look to provide interesting and valuable content for investors and try not to limit it just to funds that are currently open for investment. I hope you found value in the interview.

On The Rules of Investing: Peter Cooper’s next big idea -

Hi Chris. 5G will heavily rely on physical infrastructure, and fibre in particular. Some more information here if you're curious: http://www.ciena.com/insights/articles/5G-wireless-needs-fiber-and-lots-of-it_prx.html

On A remarkable company for the long-term -

Hi Bryan, I'm not overly familiar with ALF. The discount is quite large, and significantly larger than its long-term average discount so I'd want to know what's caused the blow-out before making any decisions. I suspect the poor NTA performance over the past year could be the problem. I note that the fees are at the higher end compared to competitors.

On 10 LICs trading at a discount -

Hi Melville, I can't speak for the contributors, but it's worth noting that APL is a Listed Investment Company. An LIC exposes you to the strategy of the manager, while PNI owns a stake in the management company itself.

On Buy Hold Sell: 4 stocks for buoyant markets -

Great point Carlos. When the market runs out of skepticism it's time to be worried. Not sure if we're there yet or not though.

On Howard Marks: The Bull and Bear cases -

Adam, the company issued a detailed statement (many thousands of words) at the time, but their summary of the issue was: "The key reason for the withdrawal of the offer is due to the requirement of the ASX, that Bitcoin Group procure a working capital report from an independent accounting firm, a report not specifically required for a listing on the ASX. In preparing the working capital report, Grant Thornton, the independent accountant was required to factor in the reduction of newly minted bitcoins released on the occurrence of block halving in July 2016, without regard to the expected increase in bitcoin price."

On The most popular company you’ve probably not heard of -

Not sure if you saw the news this morning Alex, but Kodak released a cryptocurrency yesterday and saw an intraday price rise of up to 105%...

On Chiming in on Crypto Madness -

Great article Tim, a genuinely balanced view! I'm not sure I agree that Bitcoin could ever become a gold/usd alternative in its current form. Personally, I would ascribe a very low probability to this i.e. less than 1%. The main reason for this is the amount of power that mining would end up consuming. Current estimates stand at around 37TWh of power consumption per annum. At the current rate of increase, Bitcoin mining would consume the entire world's in a few years time. The amount of carbon dioxide this is producing is scary - the estimates I've seen suggest over 100kg of CO2 per transaction is produced. These are only estimates based on asssumptions, so should be taken with a grain of salt, but I think it's a serious issue that's worth considering.

On Is Bitcoin a rational investment? -

That quote from the American Airlines CEO reminds me of my favourite quote of the year , from the WeWork CEO: "Our valuation and size today are much more based on our energy and spirituality than it is on a multiple of revenue."

On Hold ‘em or fold ‘em? The 2 choices facing investors today -

great analysis Hamish. Those mobile margins should be interesting to watch!

On Telstra Revisited -

Hi Jeffrey, the CPI basket breakdown is updated every six years by the ABS to more accurately reflect the spending habits of consumers. The breakdown was last updated in 2011, and is due to be updated again shortly. Here's the full, detailed list of all the weightings: http://www.abs.gov.au/ausstats/abs@.nsf/Lookup/6470.0Appendix22011 and here is the higher level breakdown if you don't want all that detail: http://www.abs.gov.au/ausstats/abs@.nsf/Lookup/6470.0Main+Features142011

On What's hurting your hip pocket? -

Hi Simon, Petrol is included under the Transport section of the basket, whereas electricity and gas fall under the housing section. As far as I know, the ABS has never treated energy separately. The data series are taken directly from the ABS so we can't speak for the accuracy or inaccuracy of the data. House prices make up less than half of the Housing section, with utilities, rents, rates, and maintenance also accounting for significant portions.

On What's hurting your hip pocket? -

Great read Martin. I think it's particularly interesting that the share prices appear to begin moving in the correct direction a few days before the announcement.

On Markets Take Time to be Efficient -

A great read Jonathan, thanks for sharing. I'm always fascinated to read the unusual topics you write about.

On Would You Lend to Tajikistan? -

Thanks for sharing your thoughts, Graham and Harry. It should be interesting to see how it plays out from here.

On Telstra: Dog or darling? -

Interesting point Patrick, though I would suggest that for those of us currently catching trains and buses, a dirty taxi might be an improvement.

On Avoiding the losers from self-driving cars -

Good question James. Given the data discussed above, as well as weak vehicle sales, and weak wages growth, I believe the chances currently stand around 1 in 3 of a second successive negative GDP reading.

On Could GDP surprise to the downside once again? -

Thanks for sharing Steve. I've been reading Maubossin's 'Expectations Investing' on my train trips recently, looking forward to checking out the podcast.

On Is GTN Worth Three Times Macquarie Media? -

Great article Jonathan, worth the read. Many financial planners in Australia are now using forward return assumptions many percentage points below even the new Calpers rate.

On The Dallas Pension Fiasco Is Just the Beginning -

Half-way through listening to this now and it's good stuff. Though the DMP valuation might be divisive for investors, I think almost everyone would agree Don Meij is one of the best CEO/MD's around.

On Morgans Executive Series - Podcast with Don Meij -

Thanks for sharing Alex. I remember wondering the same thing after reading Aswath Damodaran's valuation of Uber a while back. How do you think Google fits into all this? They seem to have been working on self-driving the longest and presumably, have the most well-trained AI.

On What if ride-sharing companies are like airlines, where no-one makes money? -

Very interesting article, thanks for sharing. I have a family member who's Deaf, and another who works for VicDeaf. Anecdotally, it seems many of the adults who've grown up Deaf are not interested in the Cochlear implant - the surgery is not without risks, and many are quite happy without it. My own family member was told he risked losing the residual hearing he has so he didn't proceed.

On Three new drivers of change in Healthcare -

Great stuff Joe, thanks for sharing. My nominations would be: 1) Focus on the long term; 2) Don't follow the crowd; and 3) Invest in what you know.

On 9 Ways to Improve Your Investing Performance -

Hi Steven, I thought you might find a piece I wrote interesting. It discusses this subject and two other factors that can influence company performance: https://www.livewiremarkets.com/wires/32756

On Investing in family companies -

If anyone who's commented here is interested, Marcus just posted an update on this story looking at some of the suggestions mentioned here: https://www.livewiremarkets.com/wires/32411

On The Dividend Aristocrats -

Very true James, and the last 5 years have been a very different market than the years leading up to the GFC. It's worth remembering Chad's comment (was it a quote?) that bull markets are born in pessimism, grow in skepticism, mature in optimism, and die in elation... There's definitely two very different stories being told about markets, I wouldn't claim to have the foreknowledge to see which is correct.

On Markets aren’t always quick to react -

Thanks for the comment Jordan. And good point about waiting for inflation. Macquarie Equities seem to be agreeing with us too, they issued a note with similar sentiments at lunchtime, going as far as to say economies in future would be "completely dominated by the state."

On Financial markets in a state of confusion -

Great point Patrick, though if you go back further and look at 1687-1900, it was usually in the mid-teens. Given there's around 17.5 times as much silver as gold in the earth's crust (according to USGS), one could make the argument that it deserves to be lower. I wouldn't rely on it, but it's worth considering. Add in the expected increase in demand as the PV industry grows and it seems silver is a space worth watching.

On More to Go on Silver Adjustment -

Interesting perspective Graeme, I hadn't thought of that before. Thanks for commenting. Great point Jordan.

On Buy high, sell low? -

Thanks Steve. I've not seen anything similar in Australia, but it would be fascinating to find out. It goes to show the importance of educating your investors.

On Buy high, sell low? -

I have to admit to a healthy amount of skepticism on the claims they're making. If they really have developed a commercial process for making high-quality graphene, as they claim, it could be equally as big as their battery technology (claims). The claims they're making about the improvements over Li-ion batteries are quite astounding, if proven correct and they can make it commercial and scalable, it would be very exciting. One to watch maybe.

On LWP Technologies Targets $1 billion Market Value -

Interesting insight Jonathan, this doesn't seem to have made big news, but it seems significant. I can't help but be reminded of collateralised debt obligations (especially with the agencies rating them AAA), but I guess the big difference is that these loans were written down before they were collateralised...

On Three Lessons from the First NPL Securitisations in China -

Great interview on Bloomberg Gavin, I caught it earlier today. It's interesting to see how 'commodities' still seem to get grouped in together by many. The outlook for commodities such as lithium, graphite, zinc, gold, silver, cobalt, and depending who you ask, uranium, seem fairly positive. On the other side though, bulk commodities look like they've got a long way to go before any kind of recovery.

On Base Metals Outlook - Is the Worst Behind Us? -

Hi Bill, I can't speak for Pie Funds at all here, but my own personal view (not that of Livewire Markets) is that the appeal here comes from the reduced amount of administration & work for the doctors office. It's definitely something that can be done in house, from what I gathered that seems to have been the traditional way, but ICS seem to offer a better way of managing it. I don't own shares in ICS but it has been on my watchlist for a while... Judging by my earlier comment, it might have been after reading this.

On ICS Global: An undiscovered gem -

Great read. I love that Klarman piece about cash - always wanted to read Margin of Safety but I don't want to re-mortgage the house to get a copy.

On Why cash isn't trash -

Great article Jonathan. It's amazing that mainstream economics still doesn't consider debt... Personally, I'm of the view that a universal basic income could offer answers to some of these issues - I would argue that it could be funded by asset and estate taxes, but others might prefer the 'helicopter money' approach...

On Monetary and Fiscal Stimulus has Failed – What Next? -

I hadn't noticed Surfstich, but I certainly saw what was going on with BLX. Very questionable indeed. ASIC really should be paying closer attention to issues like this in my view.

On ASX Companies Need to Report Quarterly -

Bill, I in no way meant to question your personal experience. I understand that these figures can vary greatly depending on whether the cows are grain fed or grass fed, and whether irrigation is used. Thanks for engaging with us here, your input definitely adds another dimension to the conversation.

On Slim pickings for the tree-crop investor (approved community submission) -

Hi Bill and Patrick. I thought you might be interested in another source I came across as well that seems to support the other Patrick's claim. "Producing 1 kg rice, for example, requires about 3,500 L water, 1 kg beef some 15,000 L, and a cup of coffee about 140 L" Source: World Water Development Report 2012. http://www.unwater.org/topics/water-and-food/en/

On Slim pickings for the tree-crop investor (approved community submission) -

Very true John, it seems everyone wants a piece of the lithium story at the moment. I comment a little about Silver City Minerals in my weekly which will go out tomorrow. If you missed it, they jumped from 3c to 12.5c in one morning by using the word 'lithium' in an announcement.

On Lithium! -

Is this an additional or initial investment? I thought I recalled seeing Vinomofo on their investments list already. Either way, very interesting company. Definitely one I'll be keeping an eye on. A niche is a pretty good place to be in my view.

On Vinomofo - funded today for $25m by Bluesky Venture Capital -

I've not seen yields like that on Aussie banks for a long time! One of our contributors said a while ago that if the yield is over 10%, it's probably an illusion (paraphrased). I wonder if that's true here?...

On Hope is Not a Plan -

Do you think this could be due to the quality of the Australian listed U3O8 miners compared with their global counterparts?

On Uranium Stocks Fail to Keep Pace -

Hi Tony, Mark Burgess is the former head of Australia's Future Fund, he founded and ran his own asset management firm for many years, and currently consults on the board of a number of Australian funds. We thought he was great too, we're glad you enjoyed his comments. Regards, Patrick (Livewire Market Analyst)

On Burgess: No apparent crisis, so no political will -

12% pay cut, 51% decline in underlying earnings, reported loss... something definitely doesn't add up there.

On Rio Tinto 2016 AGM -

A terrible business is a terrible business, regardless of whether it goes through an up-cycle. A missed opportunity is not a mistake if no capital has been committed - in my opinion.

On How did we get Qantas so wrong? -

Blockchain is definitely some interesting technology, I doubt the size issue will stop it, but it could certainly slow down development.

On The blockchain business -

Great read. I had initially thought that the questions being raised about Deutsche's capital adequacy were overblown, but it looks like they could be in a more challenging position than I'd realised.

On Deutsche Bank: Free Falling Without a Parachute -

A very interesting point Kym. Management can make poor capital allocation decisions in boom times and blow investors' cash, but then not share in the pain when asset writedowns comes. Seems rather one-sided doesn't it?

On Another day, another impairment -

The only time I ever watch free-to-air is when the tennis majors are on, and it's awful. It just serves (pun not intended) to remind me why I can't stand commercial TV.

On Millennials cut the cord, kill TV networks -

It's not even 10 am and there's already another one. South32 have just announced a $1.7b write down in their South African Manganese operations...

On Another day, another impairment -

Some great points in this, well worth the watch. Just as a side note, Amalgamated Holdings is now known as Event Hospitality and Entertainment.

On The outlook for the Travel sector in 2016 -

"estimate of 20% of all high yield debt defaulting in the next five years. This equates to US$527 billion of defaults" That is a scary scenario! That's almost as much as Lehman...

On The US High Yield Debt Canary is Silent -

Great article Nathan, just a couple of points regarding the turbo engines. Firstly, I think as the F1s are now using turbos, they'll be more acceptable to high end buyers; a lot of the appeal of Ferrari comes from its racing heritage, particularly F1. Secondly, modern turbos have greatly reduced lag, as we've seen from Porsche over the past few years with their twin-scroll turbo. Ferrari is claiming that the engine in the 2016 488GTB has "zero turbo lag".

On Ferrari – The race to separate is almost over -

Ah ok, I see where you're coming from - it's the way in which it's calculated rather than the absolute figure.

On Hamish Douglass' new pay -

It does seem like a very generous remuneration package, but the amazing performance of MFG over that period seems to justify it in my opinion.

On Hamish Douglass' new pay -

Why do you think there was such a strong showing against Hunter Hall for the proxy votes? Presumably these would be the most informed voters (I assume most proxy voters would be professionals like yourself?), and the 'against' vote was very strong. It seems hard to believe that after 64% of proxies could be voting against yet the resolution would still pass.

On Daily AGM Note 25 November 2015 - first strikes at Kimberley Diamonds, McAleese, Oilex, Troy Resources, Valence Industries; Goodman Group security holder dissent on grants to executive directors -

Bennelong already has the Bennelong ex-20 Australian Equities fund if that's what you're looking for, but some investors may still want to have exposure to the top end of the market. It might also be appealing to financial advisers as it can reduce their workload - rather than separately recommending 2 funds, they can just recommend 1 which achieves both.

On Combining passive and active to get the best of both worlds -

What a great idea! Achieving outperformance in the top 20 is a very difficult task, so I've always said it's better to index the top end of the market; once you get outside the top 20 though active management becomes worthwhile. I'm just annoyed at myself for not thinking of it first!

On Combining passive and active to get the best of both worlds -

The idea of social investing and investors copying others seems to just be asking for bubbles. Not saying it won't happen, but I'm not sure that it's a good thing for the markets... I am excited by the prospect of the traditional brokerages being disrupted though, it's about time.

On Financial firms better shape up or ship out -

Thanks for the explanation. I can certainly see why you avoid investing in unprofitable companies, trying to put a value on them is nearly impossible.

On The Uber effect -

I'm curious how you define value and growth stocks, is it the same way as Fama/French with book to market, or some other metric?

On Global Shares – Healthy value -

Wow, those are some impressive results from Peel! If it weren't for Sandfire's Monty project, it'd be one of the best in Australia drillholes all year.

On Livewire Exploration Watch -

Interesting perspective Anthony. Do you think it's easier to invest in the disruptors, or short the disrupted?

On The Uber effect -

Challenger is one of the highest quality businesses on the ASX in my opinion, and the multiple tailwinds assisting its growth should continue for years to come. Already more than doubled my money, no signs of a sell in sight yet though.

On Challenger (CGF): Housing retirement funds in annuities -

Useful info regarding Seek's remuneration, that's certainly not a good way to encourage management to build value in the company.

On Week ahead in AGMs: 23-27 November 2015 -

For me, one of the reasons I was willing to pay what looked to be a high PE was OFX's wonderful ROE, and its ability to grow earnings with relatively small investment. This of course would largely be because of the qualitative factors you've discussed here. Even at this price it does appear to be a good buy for Western Union, a lot of buyouts and mergers talk about synergies, but here it looks to ring true.

On How to find the next OzForex for Investment? -

It's interesting to see how different the returns are when you strip out mining and energy companies and just look at small industrials. Unfortunately I've been unable to find the data publicly, but I know I've seen it before.

On Don’t judge all small companies by the poor index returns -

It's interesting to see that with all the commodities discussed, whenever the price has dropped below the production cost of the 50th percentile it has rallied soon after. Not suggesting this is a sign we all should go start buying commodities, but it will be interesting to see if the relationship holds.

On Where to for commodity prices? Beware the three D's! -

Looks like a quality business with a bright future, definitely putting this on the watch list for further investigation.

On ICS Global: An undiscovered gem -

It's interesting that while Japan's economy has been one of the worst performing (if not THE worst performing) developed economy in the world for many years now, yet it is able to maintain full employment across the cycle.

On Chart: Australia's jobless rate -

Great article again Steve, probably the easiest to understand and clearest criticism of index funds that I've seen to date. To me the idea of encouraging herd behaviour even further seems counter-productive to returns, and the efficient operation of the market. I guess it does create opportunities for value investors though!

On The problem with index funds, especially in Australia -

I wonder if the cause of this crowd-following behaviour might be related to the rise of index funds..?

On Beware the market darlings -

While you are technically correct Patrick, in practice what Steve said would be right. With a sample size that large, the returns of active managers would likely be almost identical to market returns.

On The problem with index funds, especially in Australia -

Thanks Karl, I've generally found that for retail investors, assessing management can be one of the most difficult tasks. It's easy enough to read a balance sheet and a cash flow statement, but reading people is much harder - especially if you don't have any personal access to them. One method I've been using the past year or so is to go back and read 5-10 years worth of letters from the CEO and Chairman, taking note of the promises they've made and whether they've kept them. Of course this only works where management has been with the company for a long time, but so far I've found it very helpful.

On Our Investment Approach to Assessing Management -

congratulation on your new role, I look forward to hearing from you again - I'd been missing your posts from Intelligent Investor.

On A cheaper way to own Sirius XM -

This reminds me of something I often tell my colleagues - missing out on potential gains is not a mistake in investing, but losing money is. There's thousands of missed opportunities around the world every day - you can't catch every winner. By avoiding the losers though, you preserve your capital and live to fight another battle.

On Is your fear of missing out hurting your returns? -

Wow, I had no idea there were ASX companies showing such blatant disregard for JORC standards. I'll certainly be taking a closer look for these issues in future.

On Companies Flouting JORC Code Requirements -

I've got many years of first hand experience with Link's technology platform, it is reasonably good and functions well, but that's about as much as I could say for it. However, I do acknowledge that building a platform like that is quite capital intensive (it sent SuperPartners broke), and none of Link's (well, AAS' actually) competitors in the superannuation space seem to be able to keep up with them here. This is from the perspective of a (former) employee however; I did get the impression from a number of client's that it was more impressive from their point of view.

On How to get a rerating on your average industrial stock -

That sounds like quite a unique funding arrangement, I have never come across an ongoing (presumably underwritten?) equity finance facility before.

On How do you find the next microcap superstar? -

Great read. Do you think that there are any unforeseen (by regulators) risks created by the high percentage of domestic deposits compared to other funding sources? A bank run seems unlikely, but intuitively it feels like this should create additional risks.

On No corporate bonds? Time to reconsider -

You're right that the increased capital requirements don't affect the income statement, but that's not what's driving the decrease in value. If you value on an earnings per share basis, then increased capital requirements mean more shares have been issued without a corresponding increase in earnings, lowering earnings per share. Alternatively, if you're looking at ROE, it increases the equity, without a corresponding increase in returns, lowering ROE. I enjoyed the read nonetheless, it's always good to hear a different view on popular issues.

On Weekly Impressions - Competition amongst banks and supermarket retailers intensifies -

Amazingly, the DSH short position is not as strong as I expected. 0.72% of issued capital is short at COB yesterday. 1.7m shares short compared to avg daily volumes of 2.85m. I guess the question is whether the money has already been made on the short side or if it's going to zero.

On Dick Smith is the Greatest Private Equity Heist of All Time -

I'm having trouble commenting on your site (not sure if it's worked or not), so I've copied my comment here also: Interesting article David, and I agree on most points, though not all. You said: "Even if active managers were able to consistently outperform the market, moreover, their degree of outperformance would need to exceed their management fees to beat some of the very low cost ETFs and index funds available. As but one example, a fund that charged a 1% p.a. management fee plus a 10% outperformance fee would need to generate a return of 10.95% p.a. to offer the same return to an investor in an index product that rose by 10% in the year and charged a management fee of 0.15% p.a." Unless you're quoting before-fee returns (which would be very strange) in your table, this would not be true. Most managers in Australia quote their returns after fees - in fact it is the fees that usually drag the 'average' managers to below-market returns. You've also looked at the 3 year returns, I don't think that 3 years is anywhere near long enough a time period to be looking at. 5 years is an absolute minimum to get any indication, and Fama and French have suggested that to get a reliable indication you need longer than this. I think we can both agree however, that there are active managers who can consistently outperform the index (as Warren Buffet taught us with his Superinvestors of Graham and Doddsville speech in '84), the difficult part is identifying in advance who they might be! Past returns are not a good indicator, but other factors could be. Some of the factors which I think show potential (though their reliability is questionable, and I think they need further investigation) include 'active share', portfolio concentration, value bias, small-cap bias, and portfolio turnover. I've seen research on each one of these factors which suggests that in isolation they are indicative of the potential to outperform (of course a 'closet index' fund is never going to outperform, especially after fees), however they cannot be relied upon to predict fund performance. Many of the fund managers with highly concentrated portfolios and high active share are just as likely to underperform.My own expectation is that, when multiple boxes are ticked, one may be able to produce a more reliable indicator of fund performance. Of course this is just my hypothesis at this stage, I hope to do some proper research on the subject in the final year of my Master's degree.

On Thoughts on the Active vs Passive Debate -

I've really been enjoying these posts Kym, thank you for the interesting insights. I think executive remuneration is an area which gets ignored by far too many investors (myself included), largely because we don't know what we should be looking for. It's great to see what the professionals are looking at in this area so I can improve my own analysis.

On New CEO for Insurance Australia Group -

Very interested in the Link IPO as I worked for Link for 6 years and have an intimate understanding of how it operates. I think they can exert incredible pricing power with their near-monopoly on the industry fund administration, and the share registry customers are very sticky, despite the competition from Computershare. Their size and assets are almost impossible to reproduce (as SuperPartners would attest to), and as mentioned in the video, their income is going to be very stable and predictable. As always with PEP though, the price will likely be too high.

On The outlook for IPOs -

Very interesting read, in particular: "The data is best summarised by the most recently reported GDP number, which saw growth of just 1.8% in the year to June. Measured on an annual basis, this is the lowest nominal growth since 1962, below even the recession years of the early 1980s and early 1990s, and below even Greece." Wow, I would not have expected that! Also: "These studies in fact reveal there is no correlation between GDP growth and a market’s return, and to the extent that there is a relationship, it is slightly negative." This surprised me even more!

On Where art thou growth? -

I'm holding off at the moment in the hope of buying at lower levels, my small amount of capital is precious and I like to see big margins of safety on the value front before I deploy capital. There are some high quality names which are looking closer to the buy zone now than they have for a while though.

On A call around the grounds -

Was a holder of HFA, sold it because I was uncomfortable with the poor quality of the Australian business. 2 weeks later they sold Certitude to Ironbark and the price jumped 18% over the next 2 weeks. Oh well, I guess luck can't always go my way.

On HFA offers strong yield and opportunities for earnings growth -

I've held SFR and NST for a while now, and I've recently opened positions in S32 and WSA. Commodity producers are CHEAP - there is blood in the street and everyone is convinced that there's no hope in sight; sounds like a textbook buying opportunity for value investors. I'm looking to buy quality producers in safe jurisdictions, with low costs, long-life assets and strong balance sheets, and I'm finding them at massive discounts to their intrinsic value.

On Aitken: Nobody has mentioned the rally in commodities -

Looks very interesting Adam, I just had the briefest of looks at their most recent drilling results and they looks quite encouraging. It's too early in the development for me if they haven't finished their PFS yet, but their resource looks nice - 2.3MOz of gold at a reasonable grade is not something that comes along every day in WA. I couldn't immediately spot whether the resource was JORC compliant though?

On Initiation Report: Blackham Resources (ASX:BLK) -

Agree that resources is a scary place to be, but in my opinion, this is a 'blood in the streets' moment. Things could potentially get worse before they get better, but I'm looking at low cost producers with long asset lives and strong balance sheets - these kinds of companies will survive, and thrive when the upturn eventually comes.

On Winners and losers from reporting season -

I've been using both Livewire and Sharesight for some time, both are great. Every retail investor should have a look at what they have to offer.

On Welcome to Livewire -

Great read, although I'm sure this is stuff that most value investors should be aware of, the reminder is timely and important. Number 1 is so important, for this reason I'm sinking my spare cash into companies I already own.

On 6 Things To Do When Markets Tumble -

This was a really useful and interesting report. I really enjoyed the profile on FGG (especially as a shareholder in FGX who intends to take up the offer), the section on the options outstanding was great too - I learned the hard way how much it can hurt the share price (not to mention the earnings dilution) when the shares on issue doubles in a short period of time.

On LIC Quarterly -

The thing that concerns me is the user response to actually using the app. On the Google Play store it's only got an average rating of 3.4, and a number of the top comments are quite critical. You can have lots of registered users, but if none of them actually use the application due to frustration with the functionality, it's not going to be easy to monetize.

On Why Rewardle will be a household name... And the share price could soar ..(if you can get any) -

I'm not sure if it's the intention of the author, but the first sentence seems to imply that overseas equities are riskier than Australian equities. This seems an odd view as it disagrees with the idea that diversification reduces non-systemic risk.

On Australian investors chasing GFC losses offshore -

Have been looking for exposure to India for my personal portfolio, still reading the prospectus, but this looks like an interesting option.

On New LIC taps India for growth and yield -

Interesting article. Counter-intuitive at first maybe, but not very surprising when you really think about it. Quality is always more important than quantity though. I would think after reading this that return on incremental capital should be a better indicator for these companies as it would give a clearer idea of how much of the R&D they're turning into profit growth.

On R&D it's not the size that counts but what you do with it. -