Australian Banks have enjoyed a generational “stronger for longer” that dwarfs anything the resources market enjoyed before the consequent fall. BHP this year will make the same ebit it made a decade ago; CBA made $5b pre tax a decade ago and will make $13b this year. The driver for... Show More
Nothing propels the highs, higher, nor the lows, lower. Consider the oil sensitives - Qantas as a winner and Origin Energy as a loser. Woodside has of course underperformed because it shares a reliance upon the oil price for its economics, but its underperformance has been half of Origin’s. Part... Show More
At last, some diversity. The March quarter for the ASX saw a myriad of stocks and sectors lead and lag in performance. A motley lot – South32, Medibank Private, Newcrest, Vicinity, Santos and Transurban – were the best performers, whereas Macquarie, Incitec, the major banks, Computershare, Woolworths and Caltex were... Show More
Since 2003, the relative growth difference between the (unloved) BHP and the (loved) CSL is approximately 1% per annum compound (on a book value and dividends basis, and even after BHP’s large write offs). That sounds low, but remember that CSL has directed most of its investment in recent years... Show More
Despite recent market events, not that much has actually changed in China. It’s more a case of the “chickens coming home to roost” as policy mistakes and major policy contradictions come to a head. Overall we will use further falls in Asian equities as an opportunity to invest in good... Show More
Much as we might prefer otherwise, the market price of every listed equity investment is an amorphous blend of human behaviour, macroeconomic and corporate fundamentals. Share prices do not conform to a precise mathematical theorem. Investment returns over any period will comprise an element which reflects investors’ assessment of the... Show More
Over the past year the ASX200 Index is slightly down, but Resources and Energy are down 25% to 35%. Every other sector is up. Last month the bifurcation in returns stretched, again, to a record extent, as has been the case for several months through 2015. Many sectors are now... Show More
“Superforecasters”, those that consistently beat the crowd, tend to be methodical, analytical and collect information from a variety of sources. They are unlikely to be relying on emotive predictions from CNBC presenters. In examining things from every angle, they invariably start by trying to establish rough probability of an outcome,... Show More
Market volatility continues to create opportunities, particularly for our approach which combines fundamentally-based stock selection criteria (Value and Quality) with daily evaluation of opportunities to rebalance portfolios. The healthcare sector is one such area which has been through a period of extreme optimism and is now seeing the impact of... Show More
Forecasting is a tough game. Trying to assimilate seemingly endless data points into a coherent view of the future (at a company, industry and country level) is far more challenging than it seems. In “Taking Stock: Thank you sir, may I have another?” http://www.schroders.com/en/SysGlobalAssets/schroders/sites/australia/news-items/articles/20151103-taking-stock_thank-you-sir-may-i-have-another.pdf Martin Conlon, Head of Australian Equities,... Show More
Sometimes, the best meaning theories have a perverse real world effect. Unfortunately, corporate investment is the single biggest driver of investment returns through the past year. Those that have invested, have suffered; and vice versa. The irony as a shareholder is twofold. You can read further at http://www.schroders.com/en/SysGlobalAssets/schroders/sites/australia/news-items/articles/20151008-taking-stock_animal-spirits.pdf Show More