We’re keeping a very close eye on electronics retailers like JB Hi-Fi (ASX:JBH). Not only are they exposed to any slowdown in the economy, but they are also exposed to changes in conditions for real estate & renovation demand (especially The Good Guys) as well as credit conditions. Show More
Today's results from REA were in-line with consensus expectations demonstrating the well-known and widely-articulated platform’s ability to grow and raise prices. However, we think there are several things the market has yet to price in, as we outline here. Show More
Cochlear (ASX:COH) is one of Australia’s shining examples of technical adroitness and export attractiveness, an example to entrepreneurs of what can be achieved in Australia despite punitive wages and regulation. Show More
The Qantas share price has soared 600 per cent since 2014. This has surprised many long-term investors, who view airlines as a bit like the Bermuda Triangle – a place where money is lost and never seen again. So, what’s happened? Are airlines now a great place to invest? Show More
I have been calling an end to the Australian property price and construction boom/bubble for some time. And now property prices appear to be declining and auction clearance rates falling, the latter suggesting price falls are not over yet. Show More
Since peaking in March 2015, the share prices of our major banks have been plummeting. I fear there is more bad news ahead with the markets beginning to catch up with factors that will limit the banks’ ability to grow their mortgage books as quickly as they have in recent... Show More
I’ve been fascinated by the soaring trajectory of some of our smaller ‘new age’ companies – like A2M, PushPay, Afterpay and Kogan – whose share prices have rallied over 600 per cent since 2017. Show More
Is the current period of higher market volatility, which began in January, just a foretaste of a tougher investment landscape ahead? All the indicators point in that direction. Show More
Alas, there’s no magic signal to tell us when this market could savagely correct. The latest note of caution comes from famed US investor, Jeremy Grantham. He believes we are seeing a ‘melt-up’ in the stock market – the final stages of a great bubble near to bursting. Show More
Warren Buffett recently observed that markets can quickly turn from green to red, without pausing at yellow. It was a veiled warning that when valuations are at extremes – as they are today – it doesn’t take much to trigger something serious. Show More
In the last few days Opposition Labor Leader Bill Shorten has proposed a radical transformation of dividend imputation. Putting aside his mistaken belief that his voters are “Aussie Battlers”- when in fact they are hard-working small business owners and contractors, many of whom receive franked dividends from their business endeavors... Show More
Digital disruption is hitting the retail sector harder than most. But not all retailers have been affected to the same extent. Recent research by Citi sheds light on the winners and losers this latest reporting season. Show More
Recent experience excepted, corrections are typically more frequent and regular than many would prefer, so investing should not occur without acceptance of this. That said, it’s important to prepare, first by making the right investments, and secondly by adopting the right temperament. Show More
Only time will tell if a bull or bear market awaits investors in 2018. There’s plenty of ammunition for both scenarios. I think it will pay investors to look closely at the boundaries marked by the bull and bear cases, and treat them like the flags between which they must... Show More
Montgomery Global’s investment team is launching a new Exchange Traded Managed Fund that will be quoted on the ASX next month. Montgomery Global Equities Fund (ASX: MOGL) will share the investment strategy of the successful Montgomery Global Fund, which delivered an after fees return of 30.38% since inception, beating its... Show More
Right now, investors are facing two options: invest in the market’s momentum, while acknowledging that low returns are likely; or step aside, given the risk of low returns and higher volatility. Of late, we’ve chosen the latter option, as we are convinced it is the rational approach. But many investors... Show More
The increasing challenges faced by our retailers are well documented. But from adversity can come opportunity, provided a business is prepared to innovate. And from the US comes the story of a retailer that did innovate, and has done more than just survive – it has thrived. Show More
There’s a pithy marketing one-liner that has almost single-handedly produced a multi-billion dollar index-fund and ETF industry. It goes something like this; ‘Most active fund managers underperform the index.’ Show More
You may have noticed there’s a new paradigm being discussed in investment circles – that inflation and interest rates may never rise again. This paradigm has been accompanied by a wave of irrational exuberance, with prices of various assets breaking records by the day. At Montgomery, we are concerned this... Show More
We have long been supporters of the REA Group (ASX: REA) story with the company a longer term holding in both our domestic and global funds. Initially we were attracted to the very high rates of return on equity and little or no debt – a function of the company’s... Show More
Hi Patrick, its an estimate supplied by UBS.
It is true that the best businesses are those that have a competitive advantage and the most valuable competitive advantage is the ability to charge a higher price and cause people to still cross the road to buy that product. Consumer brands are often used as examples of this and A2 milk has achieved the ability selling what is basically milk. The question has always been about the price of the stock and the barriers to entry. If you believe that the company can continue to grow in the future, as fast as it has in the past, then the price might in fact be cheap. If however you believe that normal market and competitive forces will produce more modest earnings growth than the price is implying, the stock is expensive. By definition (we don’t own the stock), we believe the latter.
Thank you for sharing your view. Different views are precisely what makes a market, and indeed, we could be wrong. You are quite right when you point out that if your scenario transpires, the P/E would not be 40 times. Thank you again for providing the counter view.
Hi Rick $100 invested in the bond divided by 2.4 = 42
Thanks for listening K A.
Hi Carlo, you make a very good point. I too have been seeing flyers most weeks at a lower price. Price wars aren't great either (for the customer yes!)
Hi Glenn, we wrote our thoughts on our site about VTG. Even though the weighting of VTG in our funds was relatively minor, we are nevertheless enormously disappointed.