It's been a quiet week on the ASX as companies are in blackout pre-reporting, many fund managers take a break for school holidays, and LIC providers prepare for their monthly updates next week. The ASX 200 was relatively flat, down 0.4% at the time of writing, having not risen or fallen more than 2% at any point. Gold miners have been the stand out performer yet again, with the gold miners index up more than 5%. In NSW, the premier announced they were banning greyhound racing, hurting TAH and TTS, while in Italy, the banks received a $190b 'rescue package' - will it be enough? This week Australia’s AAA credit rating got called into question, AUD gold hit fresh highs and four big-cap stocks for your watchlist. Here are three wires you should read this weekend.
What’s a rating agency opinion worth?
On Thursday, Standard & Poors, the world’s largest rating agency, cut Australia’s outlook to negative stating a “one-in-three chance that we could lower the rating within the next two years.” While this seems concerning, Bank of NZ analyst Jason Wong said: “the fact the rating wasn’t actually downgraded was positive.” Debt analyst and portfolio manager Jonathan Rochford from Narrow Road Capital has provided some timely insights into the murky world of credit ratings. In this piece, he explains some of the criticisms levelled at rating agencies, as well as the merits of ratings for different types of debt. Read more: (VIEW LINK)
Aussie Dollar gold scaling new heights
Australian Dollar Gold has had an amazing first half of the year, rallying ~22% between 31 December and 30 June. For gold juniors, the ride has been even wilder, up an amazing 122% in the first half. With all these gains, it’s easy to assume that the boat has been missed. However, as the team at Paragon Funds Management point out, AUD gold equities are still trading well below their long-term average on a price to free-cash-flow basis. They make a case for investing in Australian gold producers and provide an update on two stocks in their portfolio that take advantage of this theme. Read more: (VIEW LINK)
Image source: Hedley Widdup, Lion Selection Group
Four ASX100 stocks to buy in July
Morgans Financial’s High Conviction list has been updated for July following the Brexit fallout in the not-so-United Kingdom. Last year the High Conviction list produced a 13% total return in less than six months, and it’s proven to be a popular read on Livewire this year. In July they’ve removed the UK-based Clydesdale Bank and added BHP. The monthly update now comes in video and text format, so see which large-cap stocks they like on Livewire today. Read more: (VIEW LINK)
What’s been Trending this week?
Buy Hold Sell: 5 stocks undergoing change
Ben McGarry from Totus Capital and Chris Stott from Wilson Asset Management discuss Crown, BT Investment Management, and Smart Group. Also includes two bonus stocks - a 'Buy' and a 'Sell.' (VIEW LINK)
Buy high, sell low?
In this short wire, I point out the poor track record most investors have when attempting to time the market, and look at the effect this can have on a portfolio over 20 years. (VIEW LINK)
Why this market can continue to go higher
Paul Taylor is the Portfolio Manager for Fidelity’s Australian Equities Fund and a member of the Australian Fund Managers Foundation Hall of Fame. In this video, he explains why he still thinks the ASX has room to run. (VIEW LINK)
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Patrick was one of Livewire’s first employees, joining in 2015 after nearly a decade working in insurance, superannuation, and retail banking. He is passionate about investing, with a particular interest in Australian small-caps.