Today I review research that shows if Labor eliminates negative gearing and increases capital gains tax by 50%, national house prices could fall 9-12% on top of the current declines; parse new analysis from CoreLogic highlighting a spike in the share of apartment owners realising losses when they sell their... Show More
Today I bust a bunch of big myths relevant to the current price action: specifically, I show why bonds are, contrary to popular belief, a terrible equities hedge (the oft-mooted negative correlation is incredibly unreliable and often positive); why the popular low-rates-for-long meme is completely bogus; why you should not... Show More
Overnight falls of 3.2% for the DOW (3.30% for S&P, 4.40% NASDAQ) are reminiscent of January-February 2018, and just like then it feels very unpleasant. However as always perspective is required when trying to ascertain whether this is a transitionary correction or the start of something more sinister. Show More
In the rough and tumble of investment markets its very easy to get distracted: by talk of the next best thing that will make you rich, by the ever-present predictions of an imminent crash, by the worry list that constantly surrounds investment markets relating to growth, profits, interest rates, politics,... Show More
In the AFR today I argue that we are not "late-cycle" as so many commonly claim, but rather mid-cycle, which has profound ramifications for how one should optimally allocate capital (AFR subs can click here). Brief excerpt: Show More
US CLO issuance is at record pace but credit quality is slipping. US high yield bond covenants are at their worst since records began in 2011, even B and CCC rated bond covenants are weak, but in Europe high yield bond buyers are starting to push back on terms. US... Show More
The ‘balanced’ portfolio has become an institution in the financial world. Equities and bonds are the main ingredients and the ‘mix’ determines the categories of balanced funds commonly used. Here we discuss this approach, and look at another option. Show More
Schroders Australia has completed its third broker insights survey, diving into how brokers are investing. Volatility has pushed the need to protect capital to the top of the priority list. Show More
April was a volatile month indeed – or so you would think if you have been following the news. While sensationalised reporting generates readership, a comprehensive assessment of the data often doesn’t support the narrative. Show More
This week it's the Fed's bank loan officer survey and the S&P500. The US Federal Reserves's loan officer survey provides insight into bank lending standards, and can give an important cross check against the markets. So much so, that you could easily call this chart the bear market warning indicator.... Show More
Royal Dutch Shell’s valuations make its stock look very tempting despite concerns over electric cars taking over. Show More
This week it's a chart of US REIT ETF Assets Under Management, but basically as a prompt to talk about some previous and upcoming changes to the ubiquitous GICS system. The previous change was implemented in September 2016 and saw the new Real Estate sector split out from financials. Sure... Show More
In my AFR column I reflect on Xi Jinping's masterful manipulation of Donald Trump and why a profound change in global hedging costs could radically reduce the returns Australian investors receive when allocating to US equities and US bonds (click on that link to read for free or AFR subs... Show More
On the back of the worst March quarter since 2008, indicators show the end of the current cycle is in sight. Trump’s jostle with China is more of a concern than his ‘war of Tweets’ with North Korea, and coupled with the inability of investors to rely on central bank... Show More
In my AFR column I argue that Donald Trump's "tape bombs" are the tail wagging the global financial market dog right now, and this volatility begets opportunity (click on that link to read for free or AFR subs can click here for direct access). Excerpt enclosed: Show More
Most investors have polarised portfolios bifurcated between cash deposits and equities. Few appreciate that these two very different securities span a rich corporate capital structure that allows for a much more continuous distribution of risk and return experiences. Show More
This week the "Chart of the Week" shows the equity risk premium across a couple of key developed economy stockmarkets. The equity risk premium provides a unique perspective on valuation, which brings in not just what's going on with absolute valuations, but also reflects the opportunity cost or trade-off vs... Show More
On the 9th March 1987 U2 released the Joshua Tree, the fastest selling British Album of all time that went on to sell over 25 million copies. Joshua Tree is still acclaimed as one of the greatest albums of all time. Interestingly Bono considered pulling the album prior to its... Show More
Have you ever pushed the limit? Sure you have, just that little bit further, just that little bit faster. It’s the secret to success. But also sometimes disaster… Perhaps nowhere is breaking that limit as obvious as on a race track. Yet how many of us, as amateurs, love to... Show More
In my AFR column I explain how we faded the recent equities shock picking up $159m of cheap assets but why in the longer-term equities and property are likely to be subject to more serious corrections as higher wages growth and inflation inevitably become the dominant investment dynamic, forcing discount... Show More