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Sunday, 6 December 2020
Recently trending Five ways the Retirement Review points to new policiesGraeme Shaw on why investing is at a pivotal momentRetirement Review gives strong views on hoarding of super11 key findings on retirement dreams during the pandemicBank scorecard 2020: when will the mojo return?
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On the sidelines of the Morningstar Conference, the Magellan co-founder reflects on the pandemic and which sectors are set to gain and lose. He says we were lucky the pandemic hit when it did (videos and transcripts).
The Retirement Income Review demonstrated limited understanding of the risks faced by self-funded retirees implementing rational human behaviour. Spending to qualify for the age pension is not a solution.
Much has been written about the rise of 'zombie firms' which should have gone bankrupt, but new research should be comforting to economists and investors alike, with focus on a particular segment.
When Australian companies are marked against their role in tech disruption, stock market returns are higher for companies with higher tech disruption scores. They also benefit when valued using low interest rates.
Much investing is misguided by spurious measurement fixations. What really counts in the long run is authenticity, resonance and imagination rather than sticking to index weights and short-termism.
Over the last 20 years, smaller Australian listed companies have outperformed larger companies but with greater volatility. Following a strong run in the last six months, the smaller end is looking expensive.
A Morningstar stock screener reveals a cross-section of companies with competitive advantages that are trading at material discounts to estimated value. This is a list of 18 highly-rated names worth watching.
The global tech run paused in September but the boom is driven by rising prices rather than actual profits. It will end when global confidence in the prospect of endless monetary and fiscal stimulus runs out.
The unrealistic value creation through lowering discount rates while assuming high growth shows a sensible link is critical. Interest rate assumptions need as much valuation focus as the cash flows of the business.
As fewer professionals actively research the merits of a company’s prospects, stocks become disproportionately driven by capital flows. Prices disconnect from fundamentals and there's no better example than Tesla.
As more Australians tilt their investments to global equities, they often overlook the exchange rate risk and fees. The move from US57 cents to US73 cents in six months shows the unhedged impact.
A global financial casino has been created where investors ignore realistic valuations in the low growth, high-risk environment. At some point, analysis of fundamental value will be rewarded.
The Retirement Income Review goes much further than an innocent-sounding 'fact base', and is sure to guide policies in the run up to the next election. It will change how we think about retirement incomes.
Company profits have not improved for many years but higher valuations have been driven by falling rates and excess liquidity. Conditions do not suit a value and contrarian manager but here are some opportunities.
The Review includes some profound findings, most notable that retirement income should include drawing down far more capital. Expect post-retirement products to proliferate under a Retirement Income Covenant.
A mid-pandemic survey of over 1,000 people near or in retirement found three in four are not confident how long their money will last. Only 18% felt their money was safe during a strong economic downturn.
Banks severely cut dividends in 2020 but are expected to improve payments in 2021. History provides clues to when the banks will return to their 2019 levels of profitability, but who is positioned the best?
It's not only that 60 is the new 40, but 80 is the new 60. Many Baby Boomers spend up in retirement and are less inclined to leave a nest egg to their children. The ways wealth transfers will affect all investors.