Investors should be aware that another tech boom appears to be underway. Exuberant valuations, zero profits and knowledgeable private equity owners lining up to sell their stakes are painting a cautious picture for technology stocks. This time the boom surrounds the conga line of technology unicorns that have filed to... Show More
There’s been a lot of talk of inverted yield curves in the US and whether they portend a recession or a stock market crash. But, I wonder whether we need to watch the yield curve as much as exuberance in stocks themselves?US yield curve inversionCurrently about 3/5ths of the US... Show More
The share market may be hovering around an all-time high but that doesn't mean that every stock has been in winning form. While it's always important to select stocks that are going to make you money, it's just as crucial to know what you should do with the "strugglers". In this... Show More
As the market comes to terms with what is increasingly looking like an odds-on Labor election win in May, pundits and investors are assessing how some dramatic policy shifts, including the scrapping of excess franking credits as well as changes to capital gains tax discounts and negative gearing, are going... Show More
Investors will often be confronted with rip-roaring stocks that are on a high and show no signs of arresting their ascent. In this episode of Buy Hold Sell, we take a look at companies which have witnessed some serious momentum that has been driving their share prices higher. Up for discussion... Show More
Around the world, car sales are declining. From the United States to China, car lots are suffering from increasing unsold inventory. In China, for example, automobile sales fell 13.9% in November from a year earlier, the steepest such drop in more than six years, and for 2018, car sales recorded... Show More
Let's take a step back from the monthly housing data and ask ourselves: What's happening in the market and are we seeing a bottom in prices - or are there further falls to come? Show More
ASX-Listed crowdsourced data company, Appen (ASX:APX) has just announced its intention to purchase Figure Eight for its “Leading Tech Platform.” Appen will pay US$175 million upfront, which is circa 5.7 times 2018 revenue. It will also pay up to another US$125 million in March 2020 on outperformance of incremental 2019... Show More
On the surface, it appears JB Hi-Fi (ASX:JBH) is trading at a small discount to our estimated intrinsic value range. A deterioration in the outlook and the rate of that deterioration is something however that cannot be quantified and therefore is unlikely to be factored into comments by management. We... Show More
For every company that upgraded their outlook during the Confession Season, for the first half of the 2019 financial year, five companies have downgraded. For the same period a year earlier, that ratio was three-to-two. Show More
Dan, electric vehicles "everywhere"? Often our dreams of an electric future fail to recognise the reality of billions of combustion engine cars still on the road for many decades. Think through each case for a car purchase; from farmers to those who can only afford a cheaper second hand car there will be many that will own combustion engine vehicles for a long long time. Unless government compels people to own electric, the cheaper second-hand values of conventional vehicles will also delay the transition to a fully electric national fleet of cars. It will be decades and decades before all cars on the road are electric.
Carlos, we have done so elsewhere on our blog at: https://rogermontgomery.com
Hi Albert, amid a belt tightening version of Deleveraging (which I believe I am first to call for Australia) people also delay/defer/discount repairs unless they are compulsory.
Thanks for sharing. I am not sure I agree with the conclusion of what the impacts will be on the market make-up from the proposed NG changes by Labor. Given NG will still be available to property investors in new or off-the-plan purchases, there are other dynamics at play.
Thanks for your comment Shaishav. The peak in interest only was June quarter 2015. APRA’s changes followed David Murray’s financial system inquiry in 2014. The changes shown in the table are between 2017 and 2018.
Hi all, appreciate you taking the time to share your thoughts and comments. Thanks.
Hi Paul, my apologies for the delayed response. ARQ, since 2014 have invested a lot more than they have generated with a consequent increase in debt and equity raising. ROE is not impressive however the price has pulled back towards something closer to ‘value’.
Yes Carlos we do have an Active ETF. My paper was not about active ETF strategies, it was as Chris tried to point out about passive market cap index investing.
Hi Carlos, I was referring to the concern for property investors who will come off 5-year interest-only (IO) loans, and couldn't refinance again on IO, would potentially be forced on to unaffordable Principal & Interest loan terms in 2019 and 2020, this might cause them to sell the investment property. Hope that clears that up. All the best
Hi Parth, I think you will find many of the fintechs will fizzle. Something or one thing will eventually break through to disrupt the majors but most will fizzle out and picking the winner and when is almost impossible.
Thanks Ed, appreciate the comment and thanks for sharing.
Yes great point Sathyan
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.