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14 Aug 2017 (AFR) – The next crash risk is hiding in plain sight

(14 August 207, AFR, p19, by Gillian Tett) ‘A decade ago, I spent a sleepless night worrying about a Spanish trash bin. The reason? On Thursday August 9 2007, financial markets suddenly seized up. Since I was running the Financial Times markets team, I spent two days frantically trying to identify the reason for the … Continue reading

12 Aug 2017 (AFR) – The Aussie sharemarket has an earnings problem

(12 August 2017, AFR, p31, by Patrick Commins) ‘Five months ago I asked whether valuations “matter any more”. Prices across assets have been sky-high for a long time, but keep heading higher. The answer was in that in one important way they do, and in another important way they don’t. Starting with the latter, they … Continue reading

12 Aug 2017 (AFR) – Bulls in hiding as earnings flutter in – Bullish business conditions unmatched by earnings outlook

(12 August 2017, AFR, p25, by Vesna Poljak) ‘Jubilant business conditions are at odds with reasonable but uninspiring earnings forecasts, strategists say, as another week of results fails to align upbeat business sentiment and market reality.’ ‘On Friday, Baby Bunting suffered a 18 per cent share price fall, to $1.60, upon weaker than expected trading. Soft … Continue reading

9 Aug 2017 (TheAge,MONEY) – IPO warning: more than half of floated companies are underwater a decade later

[COMMENT: The conclusion in this newspaper article is very similar to what I have reported previously on my Toolbox IPO web page, along with many share price charts to graphically show how an IPO stock performs over time.] (9 August 2017, The Age MONEY supplement, p2, Scott Phillips, The Motley Fool) ‘You’ve heard the hype. … Continue reading

7 Aug 2017 (AFR) – Dow’s dazzling rise sparks trend warning – Why the Dow is on shaky ground

(7 August 2017, AFR, p21, by Karen Maley) ‘All eyes were on the Dow Jones Industrial Average last week as it breached 22,000 for the first time after notching up records for eight consecutive days. But some analysts warn that headlines trumpeting the Dow’s dazzling rise have blinded investors to some disturbing trends beneath the … Continue reading

3 Aug 2017 (AFR) – Investor complacency has an eerie ring to it – Previous bull runs demonstrate dangers of complacency

(3 August 2017, AFR, p21, by John Plender) ‘The CBOE Vix index of implied equity volatility – the so-called fear gauge – last week hit the lowest point since its inception. To many, this will seem altogether perverse in the light of a welter of uncertainties hanging over the market. These range from worries over … Continue reading

2 Aug 2017 (AFR) – Apple, Google take down binary options apps at ASIC’s request

[COMMENT: Now this is an interesting article for retail investors who might want to trade in such financial instruments. (2 August 2017, AFR, p17, by James Eyers) ‘Australia’s corporate regulator says it has convinced two of the world’s largest technology companies, Apple and Google, to remove applications that offer unlicensed financial products to customers from their … Continue reading

1 Aug 2017 (AFR) – ASX records worst July performance for six years as Wall Street soars to record

(1 August 2017, AFR, p35, by Philip Baker) ‘The champagne corks might have been popping on Wall Street during the past month with the Dow Jones, S&P 500 and Nasdaq all closing at fresh record highs, but for local investors it was a case of dry July with nothing much to celebrate. Indeed, it was … Continue reading

29 July 2017 (AFR) – Compare how your superannuation fund performed

[COMMENT: As I always do when posting things like this funds performance table, I warn that past performance is no guarantee of future results. It is merely an interesting observation of the past performance of some funds and their own strategies which may change from time to time.] (29 July 2017, AFR, p27, by Sally … Continue reading

26 July 2017 (TheAge,SMH,MONEY) – How to turn $10,000 into a million dollars

(26 July 2017, The Age, MONEY supplement, p2, Marcus Padley) ‘I ask for Stupid Questions in my newsletter and I get them. “I have $10,000 and want to turn it into a million dollars. How do I do it?” You’re thinking “How Stupid” but it’s actually a really good question. So let’s try and answer … Continue reading

18 July 2017 (AFR) – ASIC’s Greg Medcraft warns hybrids are ‘ridiculous’ for retail investors

(18 July 2017, AFR, p1, by Tony Boyd) ‘Billions of dollars of hybrid securities issued to retail investors by the major banks will eventually cause problems for the financial system, according to outgoing chairman of the Australian Securities and Investments Commission Greg Medcraft. In an interview with The Australian Financial Review to mark his six-and-a-half … Continue reading

22 June 2017 (AFR,SMH) – ASX sheds $27 billion as global investors sell out

(22 June 2017, AFR, p15, Myriam Robin, SMH) ‘Selling by foreign investors exacerbated the biggest single-day fall in the benchmark S&P/ASX200 since Donald Trump’s election last November, with $27 billion, or 1.6 per cent, wiped off the value of the local market on Wednesday. The vicious sell-off took the index convincingly below the 5700 mark and erased all its gains this … Continue reading

21 June 2017 (TheAge) – Macquarie bank faces class action over advice on worthless Brazilian mine project

[COMMENT: Whether this purported class action proceeds or not, the allegation that is described in this news article is an interesting eye-opener for retail investors, because it might be possible for any market participant to engage in such conduct. The various Holywood movies of recent years portray that such things might really happen.] (21 June … Continue reading

21 June 2017 (AFR) – Watch out Warren Buffett, value investing is dead

(21 June 2017, AFR, p32, by Philip Baker ) ‘Warren Buffett, and all the armchair Warren Buffetts out there, you’ve been warned. There is so much change going on in the world that value investing, as a strategy, is on its way out. Buying stocks with the lowest valuations is just not working. It’s a major reason why so … Continue reading

21 June 2017 (AFR) – Morgan Stanley sees ASX200 falling 10pc: how to trade an economic downturn

(21 June 2017, AFR, p31, by Myriam Robin) ‘The S&P/ASX200 will shed 10 per cent of its value over the next year, according to Morgan Stanley. But a falling market needn’t spell disaster. Morgan Stanley has one of the most bearish views of the Australian sharemarket, having significantly downgraded its 12-month index forecast earlier this month … Continue reading

19 June 2017 (TheAge) – Last week for tax-loss selling before the July bounce

(19 June 2017, The Age, BusinessDay, p18, Jessica Sier) ‘Tax loss selling has hammered some shares over the past two months, but the strategy is gearing up to have one last wash through the ASX this week. The popular strategy involves disposing of underperforming shares as well as crystallising a loss to offset any capital … Continue reading

19 June 2017 (AFR) – Robots are cashing in – for now; The machines taking over Wall Street

(19 June 2017, AFR, p28, by Philip Baker) ‘There was a time when what happened in the sharemarket had more to do with investor emotion than anything else. But not so much these days. The machines armed with making all the investment decisions these days don’t have any emotion, don’t get nervous and don’t worry … Continue reading

19 June 2017 (AFR) – Positive skew that exists in equity markets – Most sharemarket gains come from a very small subset of stocks

[COMMENT: There are two thoughts that come to mind here. Firstly, the investment period quoted below of 90 years is not relevant to many retail investors, and it is easy to cherry pick a start and end date for comparative purposes to suit the hypothesis. But secondly, and of more interest, is the notion that … Continue reading

17 June 2017 (AFR) – Exchange traded fund opportunities and risks

(17 June 2017, AFR, p29,  by Tony Featherstone) ‘Australia is a long way from having “biblical” exchange traded funds (ETFs), as the US does, that exclude companies that support lesbian, gay, bisexual or transgender rights. But a rush of new ETFs in this market is creating controversy. Local issuers expect a massive conversion of investors … Continue reading

15 June 2017 (AFR) – Credit Suisse sees eight ASX stocks activists should target

[COMMENT: The debate continues about active versus passive funds management. It seems as though there is something to be said for an active investor who remains nimble. But do note the details of the accompanying bar chart “Returns for different hedge fund styles (%pa)” (From 2005 till now, and Past 10 years) – with Activist, … Continue reading

9 June 2017 (AFR) – Bell Potter’s Richard Coppleson tips Blackmores, Domino’s while the bears are out

(9 June 2017, AFR, p32, by Philip Baker) ‘It’s that time of the year again when all the bears come out to play. Hot on the heels of May, which is usually a bad month for shares, the history books show that June isn’t much better. Blame it on the confession season, tax loss selling … Continue reading

8 June 2017 (AFR) – Stockspot survey highlights the hidden dangers of some passive funds

(8 June 2017, AFR, p28, by Myriam Robin) ‘Investors who put their money in small exchange traded funds that lack sufficient market liquidity could receive less than market value when they want to sell, according to Chris Brycki, the CEO of roboadviser Stockspot. Stockspot this week released its third annual survey of the Australian passive universe, rating … Continue reading

27 May 2017 (AFR) – ASIC chase MFS directors for record $615m fines

[COMMENT: Here is an interesting case study for investors and traders to study to help minimise investeing risk going forward.] (27 May 2017, AFR, p5, by Patrick Durkin) ‘The corporate regulator says “all options are on the table” for chasing the former rich listers behind one of Australia’s largest financial collapses who have been ordered … Continue reading

17 May 2017 (AFR) – US, Asian and European bourses hit record highs but ASX lags behind

[COMMENT / LESSON: Some interesting observations from this article are that we should always look to the bigger picture – much bigger – before drawing conclusions. The figures and charts quoted here since 2007 will look very different over different time periods. ALSO, regarding accumulation indexes – that some of the world’s indexes are actually … Continue reading

12 May 2017 (AFR) – China’s dysfunctional sharemarkets an opportunity for Australia

[COMMENT: This is an interesting insight into the little-know workings of the Chinese share markets.] (12 May 2017, AFR, p14, by Angus Grigg) ‘In all the opportunities thrown up by China’s rise, the one never mentioned is the dysfunction of mainland stock markets. These casino-like exchanges in Shanghai or Shenzhen are hardly pillars of corporate … Continue reading

6 May 2017 (AFR) – Passive investing is lobotomised investing

[COMMENT: I don’t normally reproduce this much text from a news article; but this is compelling reading because it will challenge the beliefs of some investors. I urge you to click-through and read the entire article.] (6 May 2017, AFR, p25, by Christopher Joye) ‘Buying a “passive” or “indexed” fund is lobotomised investing, predicated on … Continue reading

26 Apr 2017 (AFR) – Star active fund managers fall on hard times – Active fundies struggle as passive index huggers deliver

[COMMENT: I cannot help but comment on this, as regular readers will know – I don’t invest in managed funds based on past experience and ongoing news and research like this news story.] (26 April 2017, AFR, p1, by James Frost) ‘Australia’s most successful and well-known stock pickers are under pressure as active managers fail to … Continue reading

30 Mar 2017 (AFR) – Stake lifts the bar for trading US stocks and ETFs

(30 March 2017, AFR, p17, by James Eyers) ‘It was during a three-year stint in Chicago, working for market maker Optiver, that Matt Leibowitz realised Australians were getting gouged buying international equities through the brokerages owned by the big banks and the customer experience was woeful. ‘ <snipped…> ‘…The culmination of his thinking is Stake, an … Continue reading

28 Mar 2017 (AFR) – More institutional investors to add ETFs to portfolios

(28 March 2017, AFR, p29, by James Frost) ‘Assets managed by Australian exchange-traded fund providers are poised for their next leg up with more than half of institutional buyers indicating plans to ramp up their allocation to the investment vehicles in the future. The survey of 35 institutions, which included five of the top industry … Continue reading

23 Mar 2017 (AFR) – Global fundies warn shares are overvalued

(23 March 2017, AFR, p25, by Jens Meyer) ‘An exit from equities for big money could be on the cards after a record number of global fund managers reckon that stocks are overvalued, according to a survey. In Bank of America Merrill Lynch’s monthly survey of 200 global investors representing close to $US600 billion in assets … Continue reading