Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Register

13 November 2026

Home / 343

Welcome to Firstlinks Edition 343

  •   6 February 2020
  • 1
  •      
  •   

Please note that some readers who should be linked to Edition 344 have been sent to this Edition 343. The correct link to the latest edition is here.

Apologies for the inconvenience.

 

This is Edition 343.

There are three words that most experts are unwilling to say. In complex circumstances with many unknowns, 'I don't know' is often better than hearsay and guesses. With coronavirus, we suddenly have a plethora of experts on pandemics and how diseases spread around the world, and much of the economic analysis is guesswork.

At first, the market reacted badly and fell, and one newsletter headlined 'Australia faces calamity'. Now, the Australian market is up over 2% since the day the virus was announced. Yesterday, AAP reported:

"The Nasdaq hit a record high on Tuesday and the S&P 500 posted its biggest one-day gain in about six months as fears of a heavy economic impact from the coronavirus outbreak waned after China's central bank intervened."

Ray Dalio, Chairman of Bridgewater, was the most honest in a LinkedIn post:

"First of all let me be clear that I’m a 'dumb sh*t' when it comes to pandemics because what I don’t know about them is more important than what I do know. I, and we at Bridgewater, don’t have a clue as to what extent this virus or 'pandemic' will spread, we don’t know where it will spread to, and we don’t know its economic or market impact."

We should not conflate the obvious importance of China, especially to Australia (Bridgewater provided the chart below) with the uncertain and unknown impact of coronavirus. Without underplaying the seriousness, it's too early to opine on the impact with authority.

The analysts highlighting the $36 billion wiped off the value of Australian shares in one day should reflect on the stories which caused similar falls in 2019, a wonderful year for the sharemarket:

  • "Stocks fell sharply on concerns over health of the global economy" (22/3/2019)
  • "Stocks plunge of trade fears" (7/5/2019)
  • "Dow tanks after bond market sends recession warning" (14/8/2019)
  • "US stocks dropped sharply after Apple warned it will badly miss sales forecast" (3/1/2019)

How many Apple shareholders missed the boom in Apple last year based on that warning?

While acknowledging it is early days, Morningstar has summarised what we know and outlined some Australian and global companies that might be affected.

Our articles start this week with two doyens of Australian publishing who have sold millions of books between them. Hugh Mackay reflects on our generous response to the bushfires by asking why the community does not always function this way.

Then in recognition of his recent 80th birthday, the sprightly and young-at-heart (who wouldn't be with 11 grandchildren!) Noel Whittaker provides a classic on staying invested for the long term, and his 20 commandments of wealth for retirees.

Since we published OK Boomer and its survey results, another 600 people have taken the poll, pushing responses to 2,400. The new comments are too heartfelt and honest to keep to ourselves.

Still on reader polls, our survey on selling fees paid to advisers on listed entities has attracted about 700 responses, and we provide the results and comments. As Survey Monkey went down just after publication, we will leave the survey open until Monday next week to give a chance to those who missed out [Note: This survey is now closed]. Then we will collate the results with our articles and send a package to the Treasurer's public consultation. Advisers should prepare for a ban on stamping fees.

Jeremy Cooper reports on National Seniors' research revealing most people are worried about running out of money in retirement. Better to focus on investing early, saving, educating yourself and then enjoying the fruits of your efforts.

Australians tend to invest in large cap, familiar local names, but Ned Bell shows there are gems to uncover in the global small to mid-cap space.

The Future Fund has released its latest asset allocations, and the changes over 2019 show how a large investor is protecting its capital. CEO David Neal has just resigned after 12 years to move to the industry fund's IFM Investors, perhaps a pointer to their future plans.

There is a growing 'flight-shaming' movement against air travel with implications for all infrastructure. The White Paper from First Sentier Investors looks at how to fly guilt-free.

Finally, to see how New York Life Insurance used a Super Bowl spot (cost over $8 million for 30 seconds) this week, watch this video. Do divine love and acts of generosity sell insurance?

 

Graham Hand, Managing Editor

For a PDF version of this week’s newsletter articles, click here.

 

  •   6 February 2020
  • 1
  •      
  •   
1 Comments
John K
February 08, 2020

Regarding the paper on 'How to fly guilt-free'.

Swedes have the luxury of being able to travel with ease and comfort to and through a large number of countries in Europe and beyond by train. This makes it easy to smugly wag the finger at those who are able to do likewise only by air travel.

Nevertheless, the appeal to self-regulation and to self-abnegation, by way of voluntary carbon offsets and the like, to attack the problem of carbon emissions from aviation (“How to fly guilt-free” 5 Feb 2020) is an unacceptably deficient response to the environmental damage caused by aviation.

Indeed, such a dilettantish approach to the relentless power and market appeal of price-competitive consumerism in an expanding global middle class is likely only to compound the damage caused by aviation emissions by delaying and prevaricating on the need for serious non-voluntary environmental pricing and other regulatory measures – just as a laissez-faire appeal to self-regulation in the financial and construction sectors has compounded the harm from bad behaviour and delayed the introduction of regulation with teeth in those industries.

Moreover, the need to address environmental harm is much more serious and urgent than the need to deal with bad behaviour in the financial sector. Unlike a fee-for-no-service in finance, environmental harm cannot be reversed by a simple contra entry.

 

Leave a Comment:
Firstlinks is sponsored by:
banner

Most viewed in recent weeks

Division 296: the initial moves to make before the windows close

What if the best superannuation strategy isn't about earning more, but acting before your options disappear? Several overlooked planning windows are narrowing, with consequences that can last for decades.

The retirement scorecard: how many of these questions can you answer?

From the maths of retirement, estimating spending and picking the right asset allocation to survive a poor decade, here are the questions every retiree – current or future – should be able to answer for themselves.

Testamentary trusts: Treasury has picked the wrong reading

A decades-old estate planning tool has survived one tax crackdown only to be caught by another. The surprise isn't who the reform is targeting, but who could end up paying the price for drafting choices made years ago.

Superannuation’s structural failings

Politicians are fighting over access to super, but they may be arguing about the wrong thing. The system’s three fundamental flaws have been hiding in plain sight for decades, costing Australians far more than they realise.

Avoid unnecessary CGT with this estate planning clause

A simple estate plan can create a ticking time bomb. One overlooked clause can pit spouses against children, delay inheritances, and potentially leave a family facing an unexpected tax bill worth hundreds of thousands of dollars.

Higher yields are creating opportunities in global bonds

Bond markets are adjusting to a new reality, but not in the ways investors expect. With markets repricing and capital competing for attention, investors may need to rethink where resilience and opportunity lie. 

Latest Updates

Retirement

The retirement account that Australia should have

Our retirement system asks one account to do two very different jobs. A dedicated "rainy day" account separating income from emergency savings could deliver better outcomes and greater peace of mind for retirees.

Investing

What the US midterm results mean for investors

Democrats have regained control of Congress, changing the equation in Washington. Whether that proves positive for investors will depend less on the result itself and more on what happens next for growth and markets.

Taxation

Should the capital gains tax reward risk?

A reader query on the recent CGT reforms has revealed a bigger issue. One overlooked feature of the old system may have done more than compensate for inflation. As we move to indexation, are we forgetting to reward risk?

Investment strategies

Bonds: The income and diversification trade-off

Rising yields have made bonds attractive again, but that does not mean they will behave as expected. As inflation, fiscal pressures and geopolitical risks reshape markets, the role of bonds may be more complicated than it appears.

Investment strategies

Why high-dividend investing deserves another look

Income investors have endured several lean years, but signs of a recovery are emerging. As opportunities improve, investors face an important choice between chasing headline yields and building a reliable source of income.

Investment strategies

Why 'overvalued' has been such an expensive word

Investors love simple rules, especially when markets appear stretched. Yet some of the strongest returns have arrived when the outlook seemed least attractive. This leaves an important question that history struggles to answer.

Investment strategies

AI – A good kind of bubble or just a bubble?

Investor obsession with AI is attracting unprecedented amounts of capital and confidence. But beneath the excitement lies uncertainties about returns, funding and risks that enthusiasts may not be paying enough attention to.

Sponsors

Alliances

  • ASA-Logo-RGB-ActiveGreen-web.png

Site Map

About Firstlinks

© 2026 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.