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15 Feb 2018 (AFR) – ‘Everything looks expensive’: Morningstar’s Daniel Needham

(15 February 2018, AFR, p29, by Sally Patten) ‘Some investors might be dipping their toes back into the sharemarket after last week’s rout, but Morningstar isn’t one of them. The high-profile manager is sitting on a hefty pile of cash and has not begun to deploy any of it, despite the recent falls. “Valuations are … Continue reading

14 Feb 2018 (AFR,TheAge) – The Aussie funds hardest hit by the correction

(14 February 2018, AFR, by Patrick Commins) ‘Geared and trend-following managed funds lost as much as 15 per cent during this month’s sharp market correction, highlighting the potential risks of such strategies during bursts of intense volatility. At the same time, cash and fixed-income funds showed their resilience by recording a positive month to date, … Continue reading

12 Feb 2018 (AFR) – Volatility bets should not be available to retail investors

(12 February 2018, AFR, p19, by John Authers) ‘How much protection do people deserve when they venture into markets? After the longest period on record without a stock market sell-off — or “correction” — capital markets reminded last week that setting prices is painful. It involves the interaction of greed and fear, with markets rising steadily, … Continue reading

12 Feb 2018 (AFR) – ETF market smashes through $US5tn barrier after record month

(12 February 2018, AFR, p19, by Chris Flood) ‘Investors ploughed more than $US100bn in new cash into exchange traded funds in January, a record monthly inflow that helped drive assets held in ETFs globally above the $5tn mark for the first time. The surge in January follows four consecutive years of record breaking inflows into … Continue reading

12 Feb 2018 (AFR) – Stock market nose dive: ‘This is how QE ends’ – AXA Framlington’s Mark Tinker sees structured product rethink after VIX blow-ups

(12 February 2018, AFR, p13, by Sarah Turner) ‘AXA Framlington’s Mark Tinker says he wasn’t surprised by the role that shorting volatility played in the last week’s stock market rout as he took aim at the wave of structured financial products that have emerged since the global financial crisis. The $US2 billion VelocityShares Daily Inverse … Continue reading

9 Feb 2018 (AFR) – Millennials get a lesson in turmoil – Market unwind will be turbulent, says ‘bond king’ Jeffrey Gundlach

(9 February 2018, AFR, p32, by Karen Maley) ‘It’s been a tough year for Millennials who, for the first time in their investing careers, have learnt just how vicious markets can be. The first market lesson came from the Millennials’ market darling – the cryptocurrencies. After soaring to a peak of nearly $US20,000 ($26,600) per coin … Continue reading

9 Feb 2018 (AFR) – Surge in volatility – ‘Buy the dip’ mantra faces unexpected test

(9 February 2018, AFR, p29, by Nicole Bullock and Eric Platt) ‘It took less than a day to debunk the longstanding mantra that financial markets are in an era of low volatility. As the shockwaves ripple out from this week’s ructions, another truism of recent years — that investors should “buy the dip” — faces … Continue reading

8 Feb 2018 (AFR) – The role of volatility shorts in this week’s market sell-off

(8 February 2018, AFR, p27, by Robin Wigglesworth) ‘When excitable beliefs in new paradigms in markets are shattered it can be spectacular. The conviction that stock markets had entered a new era of tranquility has become the latest example.’ <snipped…> ‘On Wall Street, being “short” means you are betting against something, and “short volatility” is … Continue reading

7 Feb 2018 (AFR) – Stocks plunge as investors ponder the end of Goldilocks

(7 February 2018, AFR, p27, by Patrick Commins) ‘The good news from the steep sell-off in financial markets in recent days is that in terms of fundamentals nothing has changed. The global economy remains in rude health. The global composite purchasing managers’ index – considered a leading indicator for economic activity – remains at its … Continue reading

7 Feb 2018 (AFR) – Why defensive stocks may not save your bacon

(7 February 2018, AFR, p26, by Debra Cleveland) ‘If you thought you’d find shelter from volatile markets in classic defensive stocks, rising interest rates may have undermined your “insurance policy”. High-yield defensives like the telcos, infrastructure plays and real estate investment trusts (REITS) have done well over many years, says Shane Oliver, head of investment … Continue reading

7 Feb 2018 (AFR) – Wall St’s VelocityShares ETF crashes 80 per cent as volatility strikes back

[COMMENT: Here is one good example of the sorts of things that can catch the uninitiated and unwary when playing in the financial markets.] (7 February 2018, AFR, p25, by Patrick Commins) ‘The rapid unwinding of complacent markets may have claimed its first victim after a Wall St exchange-traded fund which gains from falling volatility crashed … Continue reading

6 Feb 2018 (TheAge) – Bill Lewski pays zero to walk away from $190m suit, investors get zip

[COMMENT: This news story provides an interesting insight into what can go wrong with investments, and the extent to which the investors’ funds might be at risk.] (6 February 2018, The Age, p11, Sarah Danckert) ‘Controversially forgetful businessman Bill Lewski has paid nothing to walk away from $190 million in civil claims brought against him, … Continue reading

6 Feb 2018 (AFR,FT) – Crypto crazy Japanese mystified by virtual heist

[COMMENT: Here is one eye-opening lesson, from the world of crypto-currencies in recent years, which indicates some of the risks to be aware of.] (6 February 2018, AFR, p27, by Leo Lewis and Robin Harding) ‘As she sat in her office on Friday, January 26, Komugi Yamazaki, director at a celebrity news website, former “idol” … Continue reading

2 Feb 2018 (AFR) – Xerox, an innovator hit by digital revolution, cedes control to Fujifilm

[COMMENT: Over the years, as technology develops, some major companies fail to keep up with technology and come across tough times. This happened to Kodak in recent years – a company well known to many people around the world, but not perhaps amongst the younger generations. Now it is Xerox’s turn. This can be a … Continue reading

31 Jan 2018 (TheAge) – Deutsche Bank says investing in bitcoin could lead to ‘total loss’

(31 January 2018, The Age, Business, p29, Stephan Kahl) ‘Deutsche Bank AG’s Wealth Management currently doesn’t advise investing in cryptocurrencies, according to Markus Mueller, Global Head of Chief Investment Office. Problematic issues include high volatility, possible price manipulation and data loss or data theft, he told Bloomberg News in an interview.’ Read more at TheAge.com.au

24 Jan 2018 (AFR) – Signs the ETF party is starting to sour

(24 January 2018, AFR, p24, by Rachel Evans) ‘Welcome to the big leagues, ETFs. With trillions of dollars now being held in thousands of different products, exchange-traded funds have gone from a sideshow of the financial world to the centre stage. No where is this more apparent than at this week’s annual schmooze-fest in Hollywood, Florida, called … Continue reading

24 Jan 2018 (AFR) – The share price will get there in the end – Because the share price knows best

[COMMENT: This article provides an interesting insight. Some market participants think like this (described below), while many do not. Some people would even say this line of thinking is speculation – investing on an opinion which might be little more than gut-feeling.] (24 January 2018, AFR, p23, by Elio D’Amato) ‘There is a common belief … Continue reading

24 Jan 2018 (AFR) – Manufacturing and construction sectors set to be winners in 2018

(24 January 2018, AFR, p22, by Paul Taylor) ‘As the benchmark S&P/ASX 200 continues its upward march in 2018, it is worth a brief look back at 2017. Last year the local market delivered strong returns despite considerable headwinds. Global political instability, rising US interest rates, increasing levels of government intervention and subdued GDP growth … Continue reading

23 Jan 2018 (AFR) – US hedge fund Glaucus blasts tax breaks for MIS after Quintis joins failures

(23 January 2018, AFR, p13, by Vesna Poljak) ‘The hedge fund that brought down listed sandalwood grower Quintis has urged Australian policymakers to rethink tax incentives for managed investment scheme investors after the former TFS Corp became the latest failure in a long line of forestry-linked collapses. Quintis appointed administrators on Saturday, ending a months-long … Continue reading

19 Jan 2018 (AFR) – Carillion shows ‘dumb money’ knows no borders

[COMMENT: This is a very informative article about some of the financial instruments that have been created and peddled, and which might produce large-scale problems.] (19 January 2018, AFR, p28, by Patrick Jenkins) ‘There will be many victims of Carillion’s collapse — from the British infrastructure specialist’s workers and pensioners to UK taxpayers, who may end … Continue reading

18 Jan 2018 (AFR) – Bitcoin extends selloff amid rising threat of regulation – Falls 25 percent in two days

[COMMENT: Some people might suggest that the massive rise and fall of a number of cryptocurrencies is little different to the Tulip mania in Holland in the 1600s.] (18 January 2018, AFR, p9, by Eric Lam and Todd White) ‘The price of cryptocurrency bitcoin has careered down to a fall of as much as 25 per … Continue reading

17 Jan 2018 (AFR) – China is now too big to ignore for investors – Mark Tinker: This is the fourth industrial revolution and Asia is the heart

(17 January 2018, AFR, p26, by Mark Tinker) ‘The two big thematics for this year seem to be a general bullish consensus on economic growth and an expectation of an end to quantitative easing. Most economists are relatively sanguine on inflation, so avoiding being too bearish on interest rates, although with China now increasing global … Continue reading

16 Jan 2018 (AFR) – JB Hi-Fi caught in a big short – Ellerston Capital’s Ashok Jacob backs JB Hi-Fi against Amazon

[COMMENT: This is something that many investors don’t hear much about – the big business and ramifications of stock shorting. And this helps to explain what happens when parties have different opinions about the perceived inherent value of a company’s shares. Read about short selling at ASX.com.au. You can also see a list of shorted … Continue reading

16 Jan 2018 (AFR) – Why Glennon Capital’s Michael Glennon is ‘bored of bitcoin already’ (Cryptocurrencies are an inherently useless quasi-ponzi scheme?)

[COMMENT: Now this article might cause quite a stir.] (16 January 2018, AFR, p27, by Michael Glennon) ‘One of the great things about the Christmas and new year break is being able to relax away from the market and reflect on the year gone by. Bitcoin was the hot topic for 2017, particularly in the … Continue reading

15 Jan 2018 (AFR) – Cracks in the $2.5 trillion superannuation system – Super is riskier than you think

[COMMENT: This article might be of great interest to anyone with monies invested in superannuation.] (15 January 2018, AFR, p40, by Karen Maley) ‘Do people have any idea of the risks lurking in their superannuation savings? The issue has surfaced again, after The Australian Financial Review‘s Sally Patten last week revealed accusations that many super … Continue reading

12 Jan 2018 (AFR) – UK pension funds sell down stocks on market bubble warning

(12 January 2018, AFR, p28, by Sarah Jones) ‘If the basic tenet of investing is knowing when to buy and sell, the stock market boom has taken that decision out of the hands of some money managers. The $US2.9 trillion British pension fund industry is yanking money at an accelerated pace as company valuations forge … Continue reading

9 Jan 2018 (AFR) – Is the next financial crisis looming: Ross Barry

(9 January 2018, AFR, p26, by Ross Barry) ‘The strong performance of many share markets around the world has led many to speculate that another major correction may not be too far away. History has shown us, over the past 300 years or so, that major corrections have occurred every nine to 10 years, on … Continue reading

5 Jan 2018 (AFR) – Investing in popular stocks may not be a sensible strategy; Auscap’s Carleton on the hidden dangers of comfortable investing

(5 January 2018, AFR, p27, by Tim Carleton) ‘Investing in the most widely held stocks in the Australian market is often viewed as a low-risk approach to investing. By the very nature of these companies, they are well known, very large and typically well-capitalised businesses.’ <snipped…> ‘Analysis of the Australian market makes clear that it … Continue reading

4 Jan 2018 (AFR) – HFT: The high-frequency trading bonanza is over. Here’s why.

(4 January 2018, AFR, p24, by Gregory Meyer, Nicole Bullock and Joe Rennison, Financial Times) ‘… The rise of HFT means that ordinary investors buying or selling stocks, bonds, exchange traded funds or futures are likely to be transacting with an algorithm on the other side. But the bonanza has now ended. Trading firms are … Continue reading

2 Jan 2018 (AFR) – Last year’s losers, this year’s stars? – Why one of 2017’s ASX dogs will howl in 2018

[COMMENT: This is an interesting insight into some real life studies of the “Dogs of the Dow” approach and the Australian share market.] (2 January 2018, AFR, p30, by James Thomson) ‘Could sifting through this year’s ASX 100 dogs unearth next year’s gems? That’s the question posed by Hugh Dive from Atlas Funds Management, who … Continue reading

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