There are only two times in history that the market has been more expensive than today; March of 2000, and in 1929. Students of financial history would recognise these ominous dates, as they preceded two of the largest crashes in the last 100 years. Disconnects like this require a major... Show More
There can be little doubt in any professional fund manager’s mind that prices for many companies listed on major developed exchanges around the world can only be justified by assuming rates of growth that few companies have ever sustained. Show More
10 years into the recovery, and with valuations close to or at historical highs, there’s little denying that we’re getting late in the cycle. However, Amit Lodha, Portfolio Manager at the Fidelity Global Equities Fund, says that valuations are only half the story. Show More
Over the last few years, valuations have generally become expensive in our universe of quality companies. Valuations reaching these levels remind me of the mistakes I made running into the 2008 crash. While it is hard to predict a market turn like that, some of the signs look eerily similar. Show More
All major value equity indices show that the last five years, and in particular the last 12 months, have been a challenge for value as a style. If we look at any relative valuations or relative performance between value and growth in Australia, globally or the US, we see that... Show More
The US stock market is on its longest bull-run in history. It began on 9 March 2009 and, so far, has lasted nine years, five months and 13 days. As of today, it beats the great equities performance of the 1990s. Show More
A question I am being asked a lot at the moment is: Where are we in this most atypical of economic cycles? I tend to think we are in the late cycle of the economic recovery, as suggested by data points such as the Fidelity Leading Indicator. Valuations only tell... Show More
Disruption continues to be the word of the moment. The media sector highlights how new business models can decimate the value of old platforms. Investors are rightfully alert to the redundancy risk associated with established business models and rightfully eager to invest in the leaders of the future. Yet some... Show More
The markets continue to look like Louis Vuitton – where the glamorous and sparkly are eye-wateringly priced compared to the ordinary. Wealth inequality means an increasing percentage of the population will baulk at the ridiculous price of anything, and the same should apply to stock prices. Show More
In the last part of this video series, we discuss how we are finding opportunities in Asia that may be surprising. Show More
Finding the next a2 Milk is no easy task; there’s no sure-fire way of identifying which stock will go up 500%+. However, each year there are a number of small caps that at least double, and these stocks have some defining features that investors can look for. Show More
This week it's the PE10 and the impact of the financial crisis. Specifically what we're looking at is how the PE10 or CAPE (Cyclically Adjusted Price to Earnings) ratio would look like if you excluded the impact of the crash in earnings during the financial crisis. The bottom line is... Show More
The rhythm of life is no different to the rhythm of economic and corporate cycles. The optimism of birth, the excitement of growing up, the cynicism arising from the compromises that come with maturity, the tumult of unfair turns and the joys of victory, all in turn impacting upon performance.... Show More
Little on the face of it, but from an investment perspective quite a lot. They are both second-order beneficiaries of someone else’s investment boom. The jeans manufacturer grew out of a dry goods business set up in San Francisco to supply the thousands of hopeful miners who flocked to California... Show More
A2 Milk has posted great results with an almost 50% increase in revenue, but it strengthens the perspective that many valuations of businesses remain disconnected from whatever levels of cashflow are evident. It’s as if a bunch of birds in the bush are better than one in the hand. Show More
I’m going out on a limb and calling it now: 2018 will be the year of the unloved asset. In particular, investors in the oil and the energy sector will be well placed for a reasonably strong bounce back in the first half of this year, a shift that’s already... Show More
Here's an updated scan across countries and regions to find the top (and bottom) PE10, and follows on from a previous version I shared back in August last year. Briefly on methodology, the PE10 is a stock market valuation metric which compares the stock index to the average earnings of... Show More
Guns N’ Roses released their first debut album titled “Appetite for Destruction” in July 1987. Three months later one of the most violent and unexpected equity market corrections in US history occurred. The Dow lost 22.6% of its value on Black Monday, and the causes behind the dramatic fall are... Show More
We often read that Abenomics continues to divide people as to whether it is working, and if this policy platform advocated strongly by Prime Minister Abe since his election in 2012 will ever achieve its objective of moving Japan’s economy forward. We believe that Abenomics is working, however we feel... Show More
In his excellent new quarterly letter, ‘Oh, the good old days’, Legendary value investor, Jeremy Grantham, rips into the reasons and ramifications of the richly valued S+P500 that has had an average PE 65% higher in the twenty years since 1997 than the period before. He blames abnormally high US... Show More