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Thursday, 6 August 2020
Recently trending A hard dose reality check on vaccinesAfter 30 years of investing, I prefer to skip this partyHow we have invested during COVID-19Welcome to Firstlinks Edition 367Is the '4% rule' for retirement broken?
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It is better to miss a results bounce and buy after the company has delivered than it is to step on a landmine. With such uncertainty, avoid FOMO by following these result season investing tips.
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?
With central banks injecting as much liquidity as the market needs, the fundamental price signal has been lost. But the evidence is this does not help sustainable and long-term economic growth.
How does an analyst value a stock which has traded between $8 and $50 in two months? Regardless, Afterpay has delivered Australia's youngest billionaire, and thousands have enjoyed the wild ride.
Handling extreme winners is a complex task. Conventional wisdom such as “you never go broke taking a profit” often leaves a lot of money on the table as strong growth stocks continue to run.
Profits results in August 2019 were overall poor, and other factors are in play that influence share prices. It is difficult to jump aboard a profit announcement and make money in the short term.
What is it about shares that most investors want to buy as they become more expensive, then sell when the price falls? We don't do that with other goods. There are four main choices when reacting to a market fall.
The intuition is that stock markets should perform in line with an economy's GDP, but a look at the last decade shows little relationship, and perhaps the opposite is more accurate.
Understanding how credit spreads relate to share prices and what they can reveal about where we are in the stock market cycle can be useful information for the long-term investor.
The beginning of 2016 has not been kind to investors holding Australian shares in their portfolios, but that's not necessarily a bad thing. If you take the recommended long-term view, the poor start is history.
Investors who want to limit equity market losses while retaining the upside may use put options. The cost for banks seems relatively low at the moment, but understand what you're doing.
Anchoring refers to a common human tendency to make judgements based on the first piece of information received. In relation to investing, it makes us focus on irrelevant factors when making decisions to buy or sell equities.
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.
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.
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 is a similarity between the current health crisis and economic crises of the past. For COVID-19, record amounts of biotech funding from government agencies and private companies are looking for a vaccine. Likewise, central banks once struggled treating recessions but the 'vaccine' now is record amounts of financial stimulus to ensure liquidity. While the world awaits a COVID treatment, markets are purring along, at least until side effects hit.
The traditional 4% rule was designed to ensure retirees do not run out of money, but low interest rates and expensive equity markets question the sustainability of the level. What are the alternatives?
It’s not only products and business models that create wealth. Management teams make decisions on how to deploy capital and such actions drive vastly different outcomes over time.