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Tuesday, 14 July 2020
Recently trending 11 lessons from my lousy $50K profit on AfterpayHow much bigger can the virus bubble get?Which companies will do well in the turmoil of 2020?Share trading is the new addictionWhat is happening with SMSFs? Part 1
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Even when the virus is finally contained, the business landscape will look very different. A critical issue is the ability of consumers to find product substitutes. Many people like what they find.
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.
Despite signs of optimism, market valuations are stretched and recovery is fuelled by government support. Some companies are doing well but stimulus cannot continue to prop up consumers for too long.
It is always easier to see the challenges and risks while underestimating ingenuity and positive possibilities. It's likely to be the case this time, too, as long as we move quickly to open economies.
We cannot throw our hands up in the air and say 'this time around, it's simply too hard'. Having no macro view is unhelpful, but many of the baseline scenarios are overly optimistic, says the former CEO of Westpac and now Chairman of Chi-X Australia.
Downside risks remain and we expect another leg down, but active managers should take advantage of market dislocations. In the current context, humility and risk management are key.
The performance of the Australian sharemarket has been surprisingly weak in recent years, not only relative to the US and other developed markets, but also relative to previous major bear markets.
Current economic policy is failing to revive the corporate sector's animal spirits, as spending by consumers remains weak except for a few sectors like food, cafes and restaurants.
Continuing our series on the best performing stock markets since the GFC, the recoveries of the US and the UK place them on the podium, thanks in part to brain power and the strength of their huge global companies.
At a time when Australia is worrying about the loss of manufacturing jobs, Denmark's gold-medal economic recovery since the GFC has some interesting policy implications for us.
In some countries, stock markets have already surpassed their pre-GFC peaks. There are some surprising winners, and Australia lags despite our recent economic growth being the best in the developed world.
Afterpay listed at $1 in 2016 and traded recently at $70. How should an investor treat a small holding in a 70-bagger when each new level defies the experts? Should true believers let the profits run?
Stocks have rallied hard creating a virus bubble, but will this run for years or collapse in a matter of months? The market is giving a second chance to leave so head for the exit before there's a rush.
While the shutting of Australia’s borders to international travellers and quarantine measures is damaging to certain sectors of the economy, it is not uniformly negative for all companies.
The ability to buy and sell cheaply and quickly in small parcels is both the biggest drawback and benefit of shares. But it encourages people who should not go near the market to use it as a casino.
Taking a realistic view of the median ‘operating expense’ of an SMSF shows they cost less to run than previously claimed. Look at this granular breakdown and see how the costs of running your SMSF compare.
Investors tend to overstate the impact on investments when something significant happens and they assume the future will be different. COVID-19 has been dramatic, but is it really that unusual?