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9 Oct 2018 (AFR) – Tech stock rout could bring about value buying opportunity

[COMMENT – Now I have a real problem with this article. It talks about buying opportunities in the market, even though the share prices of some stocks might still be falling. This is crazy “advice”.] (9 October 2018, AFR, p28, by William McInnes) ‘Investors keen on snapping up a bargain could use recent falls in technology … Continue reading

6 Oct 2018 (AFR) – The tide may be set to turn for equity markets

(6 October 2018, AFR, p27, by Sarah Turner) ‘A spike in US 10-year bond yields to seven-year highs this week is sending a clear signal that the days of equity market strength may be numbered. Treasury yields moved over 3.2 per cent this week for the first time since 2011 after a flurry of upbeat … Continue reading

4 Oct 2018 (AFR) – Six signals tougher times are on their way

(4 October 2018, AFR, p24, by Simon Evans) ‘Australia has managed to avert a recession for 27 years, and the extent of a house price surge in Sydney and Melbourne after the country came out of the Global Financial Crisis relatively unscathed, had many experts baffled. But there are some worrying signs starting to emerge … Continue reading

2 Oct 2018 (AFR) – Eley Griffiths points to market euphoria over correction

(2 October 2018, AFR, p27, by Joyce Moullakis) ‘Small and mid cap fund manager Ben Griffiths has an unequivocal view that sharemarkets are at the start of a euphoric stage, offering plenty of upside rather than teetering toward a correction.  He draws on the theory coined by the late Sir John Templeton, a legendary stockpicker, that bull markets have four … Continue reading

20 Sept 2018 (AFR) – Wall Street’s enduring bonuses jar as GFC recovery eludes many

(20 September 2018, AFR, p33, Lex Column, Financial Times) ‘Americans who resent Wall Street are not just angry towards the people who helped crash the economy a decade ago. They are also annoyed by the ability of finance professionals to benefit from a recovery that eludes others. The Office of the New York State Comptroller … Continue reading

19 Sept 2018 (AFR) – The ASX sectors that are set for the biggest growth, in charts

(19 September 2018, AFR, p24, by Elio D’Amato) ‘The dust has settled after the reporting season, with most pundits saying it was a winner. Seasoned investors will know, however, that being flippant is not the way to establish a view as to whether the recent run in the market is sustainable.’ <snipped…> ‘Most investors focused … Continue reading

18 Sept 2018 (AFR) – Westpac tightens terms for property borrowers ahead of variable rate rise

(18 September 2018, AFR, p17, by Duncan Hughes) ‘Westpac will announce a new round of residential lending policy changes for existing borrowers on Monday as it prepares to become the first of the majors to lift standard variable rates. It is the fifth round of tightening in the past six months aimed at ensuring borrowers … Continue reading

17 Sept 2018 (AFR) – Regulators probe Nasdaq’s derivatives market safeguards after damage from losses

[COMMENT: An interesting insight into the world of financial market derivatives, and the Nasdaq.] (17 September, 2018, AFR, p19, by Philip Stafford) ‘Swedish markets regulators are to investigate the Nasdaq as the exchange and its customers began rebuilding their defences against defaults in the derivatives markets, after they were badly damaged by soured bets from … Continue reading

14 Sept 2018 (AFR) – Labor election win to hurt high dividend stocks

(14 September 2018, AFR, p5, by John Kehoe) ‘The stock market’s most popular dividend-paying stocks including the banks, miners and Telstra could have billions of dollars wiped off their valuations if Labor wins the next federal election, as polls suggest. A new report by Citigroup financial analysts finds that Labor’s proposal to curtail the generosity … Continue reading

14 Sept 2018 (AFR) – Active fund managers failing investors, survey shows

(14 September 2018, AFR, p31, by Sarah Turner) ‘Most Australian active fund managers in a majority of categories failed to beat their benchmarks in 2017-18, lending further ammunition to the case for passive investing in the enduring active versus passive debate. Over the past year, general Australian equity funds recorded an average return of 12.3 … Continue reading

14 Sept 2018 (AFR) – Regal’s Phil King says growth stock valuations could move a lot higher

(14 September 2018, AFR, p31, by: Sarah Turner, Jonathan Shapiro) ‘One of Australia’s most esteemed short sellers, Phil King of Regal Funds, believes growth stocks have entered ‘bubble’ territory but says they could inflate even more before the inevitable correction comes.  “It’s possible some of the growth stocks in Australia are in a bubble but equally, … Continue reading

7 Sept 2018 (AFR) – Weight of passive money to blame for earnings season’s wild share price swings

(7 September 2018, AFR, p9, by: Sarah Turner, Ben Potter) ‘Superannuation funds turning to passive investing styles to lower their costs may have contributed to wild swings in company share prices during the latest reporting season, according to Goldman Sachs. The US bank’s Australian equity strategist, Matthew Ross, noted a very large increase in the … Continue reading

31 Aug 2018 (AFR) – High earnings per share stocks reaching bubble levels – Market minds: Why it’s critical to look at growth through a value lens

(31 August 2018, AFR, p31, by Olivia Engel) ‘There is something very interesting about the acceleration of the value theme’s current underperformance during 2018: it has largely occurred within high earnings per share growth stocks. This isn’t the first time this has happened. We’ve observed this phenomenon before, during the global financial crisis, beginning at … Continue reading

20 Aug 2018 (AFR) – ‘Nothing has blown up’: investors buoyed by solid earnings season

(20 August 2018, AFR, p1, by Patrick Commins) ‘Investors are feeling confident that a better than expected earnings season will extend into its third and busiest week as anticipated weakness in companies exposed to soft consumer spending has so far failed to translate into poor profit results. August has proved “a lot better than people had … Continue reading

13 Aug 2018 (AFR) – Bruised absolute return funds are dumped by investors

(13 August 2018, AFR, p19, by Owen Walker) ‘London |Investors have pulled billions of euros from Europe’s biggest absolute return funds this year as sentiment has turned against a strategy once heralded as the future of active asset management. The controversial move by GAM, the Swiss asset manager, to prevent clients withdrawing money from its … Continue reading

11 Aug 2018 (AFR) – IOOF super fund staff raided member reserves

[COMMENT: Talk about having trust in our large financial institutions. Some even lie to the regulator.] (11 August 2018, AFR, p1, by James Frost) ‘Staff at wealth manager IOOF raided a reserve fund to fix their own bungle then lied to both customers and the regulator about what had transpired, the Hayne royal commission heard … Continue reading

9 Aug 2018 (AFR) – ‘Cloud cuckoo land’: Brookes lashed in Myer profit guidance class action

[COMMENT: Some investors are firm believers in particular stocks. Over the years, some investors in Myer Holdings would have been firm believers. Many of these investors ignore warning signs that things are not right, and continue to hold the stock. I am sure there were many investors in Myer throughout time. But some investors would … Continue reading

8 Aug 2018 (AFR) – Lessons from investor’s attempt to claim $11m in share losses against income

[COMMENT: This news story covers a perplexing topic that frequently puzzles (share market) investors and traders – How do we account for the proceeds from trading activities?  Is it regarded as income, or a capital gain? This is a very grey area with accountants offering differing opinions from time to time. This news article reports … Continue reading

8 Aug 2018 (TheAge,SMH) – How lazy financial planners get money for nothing

(8 August 2018, The Age, MONEY supplement, p2, Marcus Padley) ‘Superannuation funds are in front of the Hayne royal commission into banking and financial services this week and have been asked to reveal their entire fee and cost structures for the first time. The suggestion is that retail funds controlled by big institutions have been … Continue reading

3 Aug 2018 (AFR) – Stocks, priced for perfection, are vulnerable to shocks

(3 August 2018, AFR, p29, by John Authers) ‘Whatever else there might be to worry about, US earnings are a source of comfort. This earnings season has picked up very much where the last one left off and was locked into positivity long before Apple’s very strong results this week. At the latest count, according to … Continue reading

3 Aug 2018 (AFR) – Wells Fargo agrees to pay $US2b to end GFC-era mortgage probe

(3 August 2018, AFR, p16, by Hannah Levitt and Kartikay Mehrotra) ‘New York/San Francisco | Ten years after faulty mortgages upended the global financial system, Wells Fargo & Co has agreed to pay $US2.09 billion to settle a US probe into its creation and sale of loans that contributed to the disaster. The long-anticipated penalty, … Continue reading

2 Aug 2018 (AFR) – Stakes are high for passive funds after Faang sell-off

(2 August 2018, AFR, p27, by John Plender, Financital Times) ‘If value investors have been on the rack in recent times, their experience has stemmed, at least in part, from inadequate exposure to Faang stocks — the fabled Facebook, Amazon, Apple, Netflix and Google/Alphabet. Since last Thursday’s spectacular $US120 billion fall in Facebook’s market capitalisation … Continue reading

1 Aug 2018 (AFR) – What professional investors watch for in earnings season

(1 August 2018, AFR, p26, by Stewart Oldfield) ‘Professional investors are clearing their desks and sharpening their pencils ahead of the onslaught of the 2018 reporting season. Over a period of about six weeks managers will first  pore over published data, then participate in follow-up result conference calls and finally meet with the management of … Continue reading

31 July 2018 (TheAge) – Big data backlash: Consumers wise up to Facebook, Twitter

(31 July 2018, The Age, Business, p21, By Stephen Bartholomeus) ‘Last week something, two things really, happened that would have sent a frisson of concern through those monetising “Big Data’’. First, Facebook shares plummeted on Thursday, wiping more than $US120 billion off its market capitalisation. Then, on Friday, Twitter lost 15.5 per cent of its market … Continue reading

28 July 2018 (AFR) – Find your super fund in the top performers

[COMMENT – Regular readers of my comments will know that I always caution about reading too much into the performance of managed funds and super funds, because the performance value and rating can change significantly by simply analysing over a different time period. Especially in the complilcated and poorly defined field of super funds that … Continue reading

28 July 2018 (AFR) – Retirees set to feel the pinch as major banks cut term deposit rates

(28 July 2018, AFR, p3, by William McInnes) ‘Self-funded retirees could face further pressure as the the big four banks look at cutting their already low term deposit rates in order to offset rising funding costs. The major banks are facing increasing funding pressure due to increased funding costs squeezing net interest margins.’ Read more … Continue reading

28 July 2018 (AFR) – Are we ‘mid cycle’ or ‘late cycle’?

(28 July 2018, AFR, p31, by Christopher Joye) ‘I hear a lot of ostensibly smart people relentlessly recite the meme that we are “late cycle”, with the implication that a recession is right around the corner. In this vein, there are many overpaid equity investors spruiking the next financial crisis. That’s interesting given investment-grade credit … Continue reading

25 July 2018 (AFR) – says earnings to rise more than 90pc

[COMMENT: Even with positive news and company profit reporting, if the actual numbers are less than the analysts predicted and expected, then the share price can take a hit. Here is a good case study example.] (25 July 2018, AFR, p16, by Sue Mitchell) ‘Shares in fell to seven-month lows after the online retailer missed profit … Continue reading

21 July 2018 (AFR) – Value investing is consistently being beaten by growth

(21 July 2018, AFR, p48, by Chanticleer) ‘The divergence in performance between the leading fund managers focused on investing for value and those investing for growth is now so entrenched that it may prompt the true believers in value investing to think again. A longer-term analysis of value and growth funds by Lonsec Research prepared … Continue reading

20 July 2018 (AFR) – Selector, Bennelong, Platypus are Mercer’s top three Australian funds for 2018

[COMMENT: Another report on fund manager performance, with the usual warnings: be careful about interpreting these results over particular time windows, and noting that some fund managers cannot repeat their performance year after year.] (20 July 2018, AFR, p15, by: Sarah Turner, Vesna Poljak ) ‘What you didn’t own mattered just as much as what … Continue reading