Green shoots emerging on the East Coast

Green shoots emerging on the East Coast. Rhett Khessler says whilst low interest rates have continued to support yield plays he feels these tailwinds have now largely run their course. I think we are all getting a little complacent about where interest rates are. 85% of the worlds market cap is in now in interest rate environments that are less than .5% or even negative. Interest rates may stay low for a while longer but they won't stay low forever. Khessler says this dynamic has forced him to work a bit harder to find businesses with growth. One indicator he uses to gauge the health of the economy is pokie turnovers. After 5 years of flat results his field research speaking to floor managers at clubs suggests the last six months have been exceptionally strong. He attributes this to higher amounts of cash now sitting with investors who have had good returns and paid down debt. Khessler says his own fund has experienced good inflows and suggests listed managers like Perpetual, BTIM and Magellan are also likely to benefit. (VIEW LINK)


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