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3 key risks facing growth stocks

Andrew Mitchell
Andrew Mitchell Ophir Asset Management

With high quality, growth-focused Australian small cap businesses enjoying a stellar run of recent outperformance, this month we have shared with investors some thoughts on macro risk identification and how our portfolios are currently positioned should we see an unexpected shift in the current investment climate. Show More

High Returns, Low Volatility – What Could Possibly Go Wrong?

Jonathan Rochford
Jonathan Rochford Narrow Road Capital

Economic news was strong in October, led by US Q3 GDP coming at an annualised rate of 3.0%. Quarterly earnings and sales for S&P 500 companies are beating estimates by more than usual. One standout was bellwether stock Caterpillar, which after four years of declining revenue has seen sales up... Show More

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The truth about our debt

Stephen Koukoulas
Stephen Koukoulas Market Economics Pty Ltd

Much is being made of the record level of household debt in Australia. The media is full of stories screaming about the risks of debt for the economy. Here I look at the truth about our debt. Show More

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BIS Nails the State of Global Corporate Debt

Jonathan Rochford
Jonathan Rochford Narrow Road Capital

The Bank for International Settlements (BIS) quarterly report is always worth the read. Whilst it is academic in style and length, it consistently raises material that matters. Taken from the September report, the graphic below highlights the big issues for global corporate debt. The rest of this short article explains... Show More

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Austerity isn’t Dead, it will Come Back with a Vengeance

Jonathan Rochford
Jonathan Rochford Narrow Road Capital

There’s been a steady stream of recent articles claiming that austerity is dead. This one from James McCormack at Fitch argues that populist politicians are responsible for killing off pragmatic economic policy. Whilst I don’t deny the medium term tide is against austerity, the very high levels of sovereign debt... Show More

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Gold – and the Very Large Debt Elephant in the Room

Gavin Wendt
Gavin Wendt MineLife

It's worth reflecting upon the staggering level of international debt. Financial crises are invariably caused by debt. The Bank of International Settlement (BIS) has recently warned that a new financial crisis is looming. Part of this is simply its job and it's routinely warning against this. But it does have... Show More

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For China, this Time is Different

Jonathan Rochford
Jonathan Rochford Narrow Road Capital

Last month I wrote about how we are ten years on from the beginning of the credit crisis, but are seeing many of the same signs of hubris that were present then. There’s no reason to believe that this time is different, highly priced assets and easy credit are likely... Show More

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May Market Commentary

Jonathan Rochford
Jonathan Rochford Narrow Road Capital

Another month of small gains in equities and credit, whilst commodities continued to fall back. Equities were up in Japan (2.4%), China (1.5%) and the US (1.2%) with Europe pretty much flat (-0.1%). Australian equities (-3.4%) were the standout loser. High yield and investment grade credit in the US and... Show More

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7 Things To Look For On A Balance Sheet

Glennon Capital
Glennon Capital ASX:GC1, ASX:CMI

While the profit and loss statement is doubtless very important for investors, the balance sheet should not be underestimated; it may even be more important. Below we run through the top points to consider when coming face-to-face with a balance sheet. Show More

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Why is volatility so low?

Simon Doyle
Simon Doyle Schroders

It is widely acknowledged that the outlook for economies and markets is unusually uncertain, given the huge political changes that we are witnessing globally. It is also widely acknowledged that most assets are expensive and priced to offer sub-normal prospective returns. Why then is volatility (the VIX) so low? History... Show More

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The Outlook for Global Growth

Romano Sala Tenna
Romano Sala Tenna Katana Asset Management

We recently attended the well supported Capital Economics (CE) Conference on The Outlook for Global Growth. In total there were more than 90 slides and charts presented. At the risk of over-simplification, 6 key points stood out to us: Show More

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Howard Marks & Henry Kissinger on Investing...

Christopher Joye
Christopher Joye Smarter Money Investments/Coolabah Capital Investments

In The Australian Financial Review I relay chats with billionaire Howard Marks and former US secretary of state Henry Kissinger that can help shape the way we think about investing; highlight that Aussie inflation expectations have surged to 4%-5%, which is way above the RBA's 2%-3% target and the highest... Show More

The three ’I’s that drive the gold price

Hedley Widdup
Hedley Widdup Lion Selection Group

The fundamentals of gold remain strong; inflation should outpace interest rates and global debt remains high. I think gold will find a floor at some stage, and when it begins to move up again it could be quite aggressive. Key catalysts will be ‘the three I’s: Inflation, interest rates, and... Show More

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Spiralling debt is pouring fuel on investor anxieties

Roger Montgomery
Roger Montgomery Montgomery Investment Management

These days, it’s not easy for investors to feel relaxed and comfortable. Pouring more fuel on investor anxieties is a report by the Bank of International Settlement that shows global debt spiralling out of control. Show More

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China’s debt-fuelled economy expands 'oh so smoothly'

Fidelity International
Fidelity International Fund Manager

Higher wages are making China a less attractive hub for manufacturing exporters and foreign companies are pulling production from China or relocating planned plants elsewhere. Foxconn from Taiwan, for instance, which has long made iPhone components in China, plans to build 12 factories in India that will employ one million... Show More

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Das: 3 ingredients for a financial crisis

Livewire Exclusive

Satyajit Das, author of “A Banquet of Consequences,” sees a crisis brewing in financial markets. "There's a lot of kindling, and people are walking around flicking lighters." Das says there are three basic ingredients required to cook up a crisis. 1) Overvaluation. "You can take PE ratios, you can look... Show More

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May Review: Steady Markets Deliver Small Gains

Jonathan Rochford
Jonathan Rochford Narrow Road Capital

Equities and credit delivered gains in May, commodities were mixed. Japan, France and Germany posted good GDP numbers, forward looking data for the US is weak. US equities are looking overvalued and a range of prominent investors have come out as selling down or going short. High yield credit is... Show More

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Fortescue – A Lesson in Volatility for Credit Investors

Jonathan Rochford
Jonathan Rochford Narrow Road Capital

When I started Narrow Road Capital in 2012 many people would question why an Australian credit manager was so negative about lending to commodity linked companies. Australia has a plethora of miners so why wouldn’t I want to lend to at least some of those? The journey that Fortescue has... Show More

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Corporate credit unwind has begun

BT Investment Management

We believe are in early stages of a credit event where increasing Corporate defaults translate into higher unemployment, weaker consumption and dampened business sentiment. For the past 15+ years, a number of emerging market and commodity-driven countries have been rewarded by the secular upturn in resource prices. Foreign capital soon... Show More

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Chinese deleveraging could get very ugly

Jonathan Rochford
Jonathan Rochford Narrow Road Capital

The biggest risk for the global economy is that debt levels are elevated. Rather than deleveraging after the financial crisis debt levels have continued to grow, particularly government debt. In 2009, governments bailed out banks, corporates and consumers with a range of capital injections, guarantees and stimulus measures. The risk... Show More

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