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Tuesday, 4 August 2020
Recently trending A hard dose reality check on vaccinesSix ratios show the market is off the chartsAfter 30 years of investing, I prefer to skip this partyWhat super changes should you know from 1 July?How we have invested during COVID-19
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It seems counterintuitive, but share prices rose during 17 (85%) of the 20 economic recessions in Australia in the past 150 years as markets tend to anticipate the bad times and recover early.
Coronavirus is a particular worry compared to past epidemics because the world is now so interdependent, but the stockmarket has a habit of exaggerating threats as well as opportunities.
While Australian businesses generally achieve returns below global comparisons, our Best 50 have delivered results well above the accepted world best practice level, and they come from a diversity of industries.
Although some domestic cyclical companies currently offer value, the attraction of offshore growth is a key factor for investors, including strong Australian companies with global aspirations.
One of Australia's senior economists expects local cash rates to remain unchanged through 2019 and 2020, and consumer spending looks weak. By 2020, US growth may be down below 2%.
Australian credit markets have had a good run, and any investor tempted to exit the sector should consider whether a move now is too early in the cycle. A period of range-bound stability is the more likely outcome.
A war between the United States and North Korea is unlikely, but with Donald Trump and Kim Jong-Un turning up the rhetoric and mad fingers on the red buttons, anything is possible. What happened last time?
Australia has enjoyed a remarkable 25 year run without a ’recession’, but our stockmarket has badly lagged the US in recent years, and company earnings are still some 30% below the level of 10 years ago. Will it improve soon?
Australia’s net inflow of immigrant millionaires is large and growing. With a lack of premium housing stock, major cities are struggling to meet demand, but this does not necessarily feed into the broader economy.
Australia's reliance on raw material exports combined with imports of manufactured goods is ensuring that the Australian dollar remains closely pegged to commodities prices.
The Australian economy faces many challenges from both global and domestic influences, and while opportunities exist for Australian businesses and investors, it's a time for caution.
Long term investors look forward to market-wide falls because good companies are sold off along with the rest. It gives a chance to buy into companies that were previously considered too expensive.
With 160 programmes underway and billions of dollars spent on COVID-19 vaccines, investors are drawn to optimistic news. However, the company that has developed most new vaccines has a sober view.
There is an infinite variety of financial charts an investor can watch, with many spurious claims about factors and causality. But here are six common charts that are at historical extremes.
Eventually, prices become so extreme they bear no relationship to reality, and a bubble forms. I believe we are there today, not for all stocks but for many in the technology space.
A few rules have changed, one is caught up in the legislative stage, and it's worth revising a couple of others. Around the age of 65, there are specific super opportunities every retiree should know.
With signs that the economic recession will not be as deep as first feared, many companies will emerge strongly with robust business models. Here are the sectors with the best opportunities.
There are plenty of reasons for pessimism as the market has recovered too strongly, but quality stocks with good earnings growth and strong cash generation and balance sheets are still available.