Insights

We come to the end of another unusual financial year. Over the years we have encouraged investors to avoid predicting markets, and understand the shares they own are real, operating businesses. Commensurately, the long-term success of the investment will be predicated on the success of the underlying business. In the short-term the success of the […]

The past month has been disruptive for many readers, who have been subject to lockdowns. We hope you have been managing well during this period.   An eagerly anticipated reporting season commences in August, with most ASX listed companies reporting FY21 numbers. We anticipate robust earnings results reflecting the ‘V-shaped’ recovery of the economy given (1)

During May, the market was broadly flat. The outlook for the domestic economy appears robust: Household and corporate balance sheets are strong. Elevated retail spending. 20-year high job vacancy rate should result in lower unemployment. Australian government debt remains manageable. Interest rates are at record lows. Business forward orders recently reached multi-decade highs; and Strong

Much has been made of the market hitting all-time highs recently; accompanied by the normal predictions of pending catastrophe. Many great investors have discussed the folly in making market predictions.  Amongst the many comments on this exercise of looking into crystal balls is one from John Templeton: “The influence on stock prices are so numerous

Two strong opinions have been at loggerheads recently: The first says, ‘the end of the world is nigh’, and that inflation, interest rates and unemployment are about to skyrocket. This prediction is often couched in terms of gloom and doom for markets. The second points to the US, which looks like spending over $9 TRILLION

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

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

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

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

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