Here I argue that anyone who tells you they know what's driving markets right now is lying or fooling themselves, which begets opportunity (click on that link to read the full column or AFR subs can click here). Excerpts enclosed: Show More
Today I write that it's not often you come across a major bank hybrid that is genuinely cheap, which CBA’s new Perls XI preferred equity security (ASX: CBAPH) undeniably is given an expected maturity (or “call” date) of 5.36 years (click on that link to read the full column or... Show More
I've written a column summarising our valuation views on NABHA, which are excerpted below (click on that link to read the full column or AFR subs can click here). We look at scenarios where NABHA remains perpetual and others where it is called with both converging around the $85 mark.... 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
Today I explain how ScoMo (and Turnbull) saved Australia's AAA rating, and in the process also saved borrowers from a certain 10bps per annum rate hike worth over $10,400 over the life of a typical home loan. Last week S&P shocked the market, but not us, by upgrading Australia's AAA... Show More
The recent by-elections should serve as a warning to investors reliant on franking credits for income. Significant swings to Labor while the Liberals stand by corporate tax cuts, increase the chance of a Labor victory and, with it, Labor’s stated policy of removing franking credit refunds to investors who do... Show More
In the scramble for customers, some fund managers and superannuation providers are taking on additional risk, investing in a range of assets and deeming them ‘cash’ when clearly they are not. Show More
Two quick charts looking at the risk and return trade-off between ASX equities and ASX major bank hybrids. The first chart considers the current cash (unfranked) and fully franked dividend yield on the ASX200 index versus a range of major bank hybrid yields in both franked and unfranked terms. The... 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
Switching out of senior bonds and hybrids to invest in Australian residential mortgage-backed securities (RMBS) while house prices are falling---and likely to remain weak for years---is one of the more surprising trades I have seen of late. It is right up there with selling major bank hybrids on the ASX... Show More
In the midst of a bull market, there’s no shortage of commentators, brokers, and friends with the latest tip on what to buy. However, nobody ever says much about selling. Baron Rothschild said the secret to his success was “I never buy at the bottom and I always sell too... Show More
Labor's Batman by-election win in Victoria makes its proposed changes to franking rules more promising. It's a good time to reassess your investment decisions and potential loss of income, especially if you are invested in hybrids. These securities are expected to be less attractive and prices to be more volatile Show More
Labor leader Bill Shorten is certainly bold when it comes to assaulting the financial heartlands of Australian housing, equities and super. Show More
In my AFR column I speculate that sanity could prevail and the mooted CBA hybrid that is expected to be launched next week could actually be attractive, offering a much higher margin and shorter maturity than Wesptac's latest issue (ASX: WBCPH) (click on that link to read for free or... Show More
If you already own Hybrids you’ll be familiar with some of their benefits: attractive yields, access to franking credits and lower volatility relative to equities. However, as terms and conditions differ from security to security, Hybrids can be a complex and admin intensive asset class for investors. Show More
In the AFR today I explain why long-term forecasting is a waste of time; why Australia's jobless rate in December 2018 will likely be 0.75% to 1.0% lower than the 5.5% rate the RBA is currently forecasting; why the enigmatic Guy Debelle might one day make a great governor; and... Show More
In the AFR I argue that Westpac's landmark US$1.25 billion hybrid issued into the US market this week, which was initially 11x oversubscribed, will reduce the bank's need to issue future hybrids on the ASX and thereby choke domestic supply. This 10 year hybrid was also priced at a credit... Show More
In the AFR I review the government's latest monthly financial data, which shows that Australia's budget deficit is the smallest since 2013 and currently running much better than expected care of strong commodity prices, corporate profits, and asset price appreciation. I also present new research that prices the downside risk... Show More
In my Weekend AFR column I offer my latest analysis of relative value investment opportunities across the banks' capital structures in the context of the recent AMP subordinated bond deal, highlighting what appears to be dysfunctions between senior bonds, subordinated debt and hybrids (click on that link to read for... Show More