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
In recent months, interest rates have been rising globally, exerting a downward gravitational pull on the value and price of most assets. It’s a trend that’s likely to play out for some time. Show More
Slowing growth and tightening profit margins, customers entering financial stress and falling asset values; It sounds like the recipe for a disastrous investment but what if the price of the investment has factored in something even worse, which failed to eventuate? Show More
It’s always a relief to wake up from a nightmare and while we believe that the nightmare for property investors may have only just begun, there may be relief, or even a silver lining, in the form of lower bank share prices. Show More
If the last few months has reinforced anything, it is that the market can remain irrational for a very long time. Despite already being expensive, the disparity between the cheapest and most expensive has widened even further in recent months. Show More
There can be little doubt in any professional fund manager’s mind that prices for many companies listed on major developed exchanges around the world can only be justified by assuming rates of growth that few companies have ever sustained. Show More
Is the next US downturn years away, or just around the corner? Either way, leading US economist, Professor Jeffrey Frankel, says it will be severe. And the reason, he says, is the Trump administration’s relentless pursuit of fiscal expansion and financial deregulation. Show More
Recently, New Zealand-based TradeMe (ASX:TME) reported its FY18 results. Think of this business as a combination of Ebay, Seek, Realestate.com.au and Carsales.com.au. Show More
Australian property prices are falling at their fastest rate for five years, thus putting a definitive end to the debt-fueled housing boom. My concern is that this reversal has only just begun. Show More
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
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.