It’s been a fairly quiet week on Australian markets, but with the US rates decision next week, could it be the calm before the storm? Only time will tell. For investors in iron ore stocks, it has been a volatile week, closing up a massive 18.6% on Monday, then dropping 8.8% on Wednesday. The big news overseas for the week was the ECB meeting, with deposit rates cut further into negative and Quantitative Easing being extended to cover corporate bonds. Before you jump into next week's events, why don’t you catch up on what you might’ve missed and read the 3 wires I found interesting this week.
1) I’m neither an eternal bull nor a ‘permabear’ when it comes to Gold, but I do feel in the minority there. Gold is undoubtedly one of the most polarising investment choices available. It was refreshing, however, to read a balanced account of the state of the Gold market. That it comes from an expert on precious metals made it all the more interesting. Jordan Eliseo from ABC Bullion weighs in on Gold in this engaging and detailed blog entry: (VIEW LINK)
2) It’s one thing to know the theory, but another altogether to invest in the real world. Jonathan Wilson from Clime / StocksInValue has certainly experienced this in the last year. In this blog entry, he shares some valuable lessons that they don’t teach you in business school. Lessons numbers 3 and 5 were the standouts for me. (VIEW LINK)
3) When constantly consuming financial media it’s easy to get caught up in stock tips and macro predictions. I like to learn new things, and Hugh Dive from Aurora Funds has managed to teach me some. In his latest update, he talks a favourite subject of Warren Buffett’s: company management. Have a read to learn how to identify an ‘idiot-proof company’. As Buffett says, one day an idiot will probably run it. (VIEW LINK)
4) A lot has been written about negative interest rates in recent weeks. One thing I haven’t seen discussed widely is how this could affect Australian banks and mortgage holders. Everyone has focussed on European and Japanese banks, but with Australian banks sourcing around 30% of their funding overseas, negative rates directly affect bank shareholders. Read the update from Jamieson Coote Bonds to find out why they’re expecting the RBA to cut rates: (VIEW LINK)
I’ve got something a bit different for you in this week’s bonus content. Earlier this week we caught up with Ole Hansen, the Head of Commodity Strategy at Saxo Bank. He had some fascinating views on the recent resources rally, best heard straight from the source. Watch the video to find out if he thinks the rally in resources is real. (VIEW LINK)
We hope you enjoyed Livewire this week. As always, good luck in the markets next week.