I have a friend who is mildly wealthy but not gainfully employed. He has been a customer of the same bank for the past 40 years. Like me, he doesn’t own a house. Unlike me, he has been thinking about it. Show More
In this short interview, Charlie Jamieson from Jamieson Coote Bonds discusses his outlook for Australian mortgage rates, and explains the impact that the Fed is having on them. He also touches on what he expects from the RBA, and one potential driver of much tighter lending. Show More
In our first monthly letter for the year, we highlighted that 2018 was unlikely to be a ‘set and forget’ year for investment strategy. As we approach the second half of 2018, macro uncertainty and cascading geo-political risks continue to impact markets and seem likely to befriend us for the... Show More
Macquarie Infrastructure fell 41% in a single session in February, a direct result of the elephant in the room investors have overlooked, as outlined here by Charlie Jamieson from JCB. Charlie explicitly warns of the ‘train having left the station’ for a potential ‘down-the-firepole type pricing moment’ that all investors... Show More
While the global economy delivers on growth, the signs are there from the US regarding the pressure of inflation as the Fed raises rates, coupled with indications of wage pickup across the world. The RBA remains in a holding pattern on rates, and won’t move until the unemployment rate drops... Show More
September 27th, 1983. What comes to mind? What if I include the quote from Bob Hawke? “Any boss who sacks a worker for not turning up today is a bum”. If you are over 45, you will know straight away. It was the day the yacht Australia II won the... Show More
The US economic expansion has just become the second longest on record. If it continues beyond mid-2019, it will be number one. Its longevity is probably due to a mixture of circumstances, judgement and luck. The severity of the recession following the global financial crisis (GFC), coupled with the slowness... 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
Most investors and economists accept that interest rates around the world have bottomed and are heading up. This matters not just for macro-traders, but will affect all investors and all asset classes. As interest rates go up, so does the cost of holding cash, which is fundamental to the value... 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
A couple of weeks ago, I suggested that 2018 would be the year in which we waved goodbye to Goldilocks. By that, I meant that the unusually favourable conditions investors enjoyed in 2017 - solid growth, lower for longer interest rates, subdued inflation and a lack of volatility - could... Show More
The volatility genie has now been released and is unlikely to go back in the bottle as late cycle fiscal expansion in the US combined with higher global funding rates from the US Federal Reserve will have markets on their toes going forward. 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
While in Taiwan this week, meeting with executives of the technology/smartphone value chain, my hotel room shook with earthquake tremors. It struck me that nature has a unique way of sending us mortality messages every so often. In a similar vein, hidden in all the volatility last week, ‘Mr Market’... Show More
The age of Quantitative Easing is coming to an end (at least until the next crisis). The Federal Reserve in the US has already tapered their purchases and begun raising interest rates. The European Central Bank is expected to follow suit later this year which just leaves the Japanese. As... Show More
The average variable home loan rate in Australia has fallen from 8.3% to 5.1% in the past ten years, enabling households to borrow more and drive house prices higher. Despite higher levels of household debt, Australians’ level of mortgage stress is quite low. But what if interest rates go up?... Show More
Yet again another quarter and another CPI miss. The RBA has no reason to move rates on the back of these soft numbers. Despite oil prices rallying throughout the quarter and the global economy and risk in general being bid to the moon, we are still yet to see the... Show More
There’s an overwhelming sense of déjà vu as far as the gold market is concerned. Two years ago during December 2015, we witnessed the first US Fed rate hike since the 2008 GFC – a 25-basis point increase. This followed years of promises, threats and jawboning by the US Federal... Show More
Markets have ‘baked in’ expectations that interest rates and inflation will stay low for a long time, but Simon Mawhinney, Chief Investment Officer at Allan Gray, thinks that assuming low rates for an extended period could be dangerous. Show More