Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 380

Welcome to Firstlinks Edition 380

  •   22 October 2020
  •      
  •   

Weekend market update

The US market delivered a solid performance on Friday in the wake of a more civilised Presidential debate, with the S&P500 and NASDAQ both rising 0.4%. However, over the week, the broad index was down 0.5% as stimulus talks stalled and new virus cases grew around the world, especially in Europe. Locally, the S&P/ASX200 was flat both on Friday and over the week. The opening up of Victoria shows Australia is in better control of the virus than most other countries, especially as we head into summer while the US and Europe face chillier times.   

***

When I was responsible for alliances at Colonial First State, in 2007 we introduced Al Gore's Generation Investment Management to the Australian retail market (and it has performed well since under the guidance of Co-Chief Investment Officer, Mark Ferguson, son of Sir Alex). On a couple of occasions, I hosted the 45th Vice President of the US to dinners with investors and advisers, and he was always engaging and informative. His care for the environment was genuine, and the world would have become a different place if the US Supreme Court had ruled in his favour to become President in December 2000 instead of George W Bush.

One time, I asked Gore about political funding and its implications. He said when he first went into politics, he raised US$70,000 of his own money and from friends and family, but if he wanted to run for the same position again, he would need at least US$100 million. And that was 13 years ago.

To an Australian, the numbers spent on political advertising in the US are unbelievable. Joe Biden will spend twice as much as Donald Trump by election day, the combined total reaching an estimated US$2.8 billion just on TV advertising. Facebook produces an ad tracker which shows in Texas alone, each spends around US$200,000 a week on the social media site. 

There are 12,000 registered lobbyists in Washington, and promises of money and favours are traded every day. That's the democratic system. 

Our local news has been dominated by shady deals with property developers, cash for visas, sports rorts, overpriced airport land, questionable defence contracts and former ministers taking outside jobs relating to their prior portfolios. But we are babes in the wood compared with the influence billions of dollars buys in the US. Al Gore told me he would never stand for office again.

With non-compulsory voting in the US, the challenge is to convince people to make the effort, although this time, there are already massive pre-polls and data showing more people than ever care. This time it really matters.

Back to all things investing and our stellar line up ...

Kate Howitt has been voted one of the leading female fund managers in the world, and she reveals the stocks she likes, unique insights into how the investing world has changed in 2020, plus a great tip for inexperienced investors.

In this edited extract, Hamish Douglass answers client questions posed by Frank Casarotti, including how Magellan still plans to deliver on its 9% aspiration over time, and why unlimited government debt is akin to believing in the tooth fairy.

Roger Montgomery rounds out this fund manager trio with a study of what Warren Buffett is probably thinking about technology, and the search for sustainable earnings over a decade, not near-term popularity.

The leading futurist Phil Ruthven gives some big picture analysis and charts on Australia's debt in a global context, and he asks if we can afford it and what are the future consequences.

Continuing this bumper edition, Lex Hall delves into the Morningstar stock screener to find 18 Australian companies rated cheap relative to their estimated value. A great selection for a watch list.

Then a highly-informative article by actuary Tony Dillon, who answers a question many people ask: why don't more fundies use options to protect the downside on their share portfolios? It's easy enough in theory but what does it cost?

Finally, Grant Berry says that listed property has recovered better than expected and many sectors offer the yields that have become increasingly scarce elsewhere.

This week's White Paper from Capital Group is a guide to market recoveries, and the benefits of staying invested for the long term, including three mistakes that investors should avoid.

 

Graham Hand, Managing Editor

 

Latest updates

PDF version of Firstlinks Newsletter

ASX Listed Bond and Hybrid rate sheet from NAB/nabtrade

Indicative Listed Investment Company (LIC) NTA Report from Bell Potter

Plus updates and announcements on the Sponsor Noticeboard on our website

 


 

Leave a Comment:

banner

Most viewed in recent weeks

Simple maths says the AI investment boom ends badly

This AI cycle feels less like a revolution and more like a rerun. Just like fibre in 2000, shale in 2014, and cannabis in 2019, the technology or product is real but the capital cycle will be brutal. Investors beware.

Why we should follow Canada and cut migration

An explosion in low-skilled migration to Australia has depressed wages, killed productivity, and cut rental vacancy rates to near decades-lows. It’s time both sides of politics addressed the issue.

Are LICs licked?

LICs are continuing to struggle with large discounts and frustrated investors are wondering whether it’s worth holding onto them. This explains why the next 6-12 months will be make or break for many LICs.

Australian house price speculators: What were you thinking?

Australian housing’s 50-year boom was driven by falling rates and rising borrowing power — not rent or yield. With those drivers exhausted, future returns must reconcile with economic fundamentals. Are we ready?

Retirement income expectations hit new highs

Younger Australians think they’ll need $100k a year in retirement - nearly double what current retirees spend. Expectations are rising fast, but are they realistic or just another case of lifestyle inflation?

Welcome to Firstlinks Edition 627 with weekend update

This week, I got the news that my mother has dementia. It came shortly after my father received the same diagnosis. This is a meditation on getting old and my regrets in not getting my parents’ affairs in order sooner.

  • 4 September 2025

Latest Updates

Shares

Why the ASX may be more expensive than the US market

On every valuation metric, the US appears significantly more expensive than Australia. However, American companies are also much more profitable than ours, which means the ASX may be more overvalued than most think.

Economy

No one holds the government to account on spending

Government spending is out of control and there's little sign that Labor will curb it. We need enforceable rules on spending and an empowered budget office to ensure governments act responsibly with taxpayers money.

Retirement

Why a traditional retirement may be pushed back 25 years

The idea of stopping work during your sixties is a man-made concept from another age. In a world where many jobs are knowledge based and can be done from anywhere, it may no longer make much sense at all.

Shares

The quiet winners of AI competition

The tech giants are in a money-throwing contest to secure AI supremacy and may fall short of high investor expectations. The companies supplying this arms race could offer a more attractive way to play AI adoption.

Preparing for aged care

Whether for yourself or a family member, it’s never too early to start thinking about aged care. This looks at the best ways to plan ahead, as well as the changes coming to aged care from November 1 this year.

Infrastructure

Renewable energy investment: gloom or boom?

ESG investing has fallen out of favour with many investors, and Trump's anti-green policies haven't helped. Yet, renewables investment is still surging, which could prove a boon for infrastructure companies.

Investing

The enduring wisdom of John Bogle in five quotes

From buying the whole market to controlling emotions, John Bogle’s legendary advice reminds investors that patience, discipline, and low costs are the keys to investment success in any market environment.

Sponsors

Alliances

© 2025 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.