February 2021 Newsletter

In February most ASX listed businesses reported numbers for the first half of Financial Year 2021. Results have been very positive with earnings upgrades, higher dividends and strong cash generation, an outcome few predicted this time last year. In January 2020 (pre-COVID) the market was rightly concerned about low growth, high household debt levels and …

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January 2021 Newsletter

2020 was a watershed year, and perhaps one of the greatest examples of the futility in predicting the future direction of the stock market. 2021 brings the usual cavalcade of those predicting the market to double or halve; regular readers will know what to do with these predictions. One of the most frequent questions we …

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December 2020 Newsletter

In a year which few are likely to forget, the market continued to provide salient lessons. Given the extra risk in the system, the recession, the likely diminution in profits, forecast increases in unemployment and general unrest, one would have predicted a dire share-market, and perhaps justifiably so. However, the great investors in history often …

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November 2020 Newsletter

Over the past 10-or-so months, many investors have sold the businesses they own for various reasons, including: Potential supply shock out of China Hospitals overrun due to covid Trump may get re-elected Biden may get elected There may be a stand-off after the election Interest rates may rise Interest rates may fall $A may rise …

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October 2020 Newsletter

The unusual paradigm in which markets have lived in the past 9 months continues unabated. The normal drivers of individual company performance (predominantly profits) are being largely ignored by the market and replaced by companies with an exciting ‘story’. The macro direction of markets is driven largely by stimulus and low interest rates with very …

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September 2020 Newsletter

The past month saw more consolidation in the market and ended broadly flat. The arm wrestle between in economic impacts of the COVID-19 response and central bank stimulus continues, with many and varied predictions about as to the outcome. In aggregate, corporate profits are linked to economic growth, and economic growth is significantly correlated to …

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August 2020 Newsletter

The month saw most ASX listed companies report FY20 numbers, with 75% of companies reporting a profit. This is the weakest outcome in a decade, but encouraging given the economic backdrop. On aggregate, earnings have fallen 37%.   Some stand-out sectors are: Gold – strong demand and record prices as investors sort a hedge against …

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July 2020 Newsletter

The new financial year greets us with the same challenges and uncertainties of the last. The recent movement in the sharemarket has confounded the skeptics and perennial bears, but that is not to say there will not be more short-term volatility. The correct action is to acknowledge the market is impossible to predict with any …

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June 2020 Newsletter

Imagine for a moment that you personally own a large mining conglomerate which consists of: Iron ore and nickel operations in Western Australia Copper & base metal operations in Chile; Potash operations in Canada: Uranium, copper, gold and silver operations in South Australia: Offshore oil operations. Coal mines in Queensland; Imagine also that your company …

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May 2020 Newsletter

The catchy finance industry adage of “sell in May and go away” has not been financially rewarding in 2020.  The banks are now benefiting from an improvement in sentiment – something almost unimaginable only last month or even last week. As stated by Burton Malkiel in his book Managing Risk in an Uncertain Era “Investors …

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