investing

How short sellers profit from price plunges

A few weeks ago, Gautam Adani was indisputably India’s richest man. Now his fortune is slipping away as the stocks of his many companies crash, thanks to the efforts of a relatively obscure US company named after the 1937 Hindenberg disaster (in which a hydrogen-filled airship caught fire, killing 98 people). Adani’s personal fortune was…

When the Experts Get it Wrong

Risk averse investors in share markets in many cases rely on mutual or exchange traded funds managed by experts. The assumption behind this strategy seems obvious – experts have the training and the time to thoroughly research both macro and micro economic conditions and the markets in which the stocks they add and subtract from…

4 value stocks for equity investors

Value stocks can be found in many areas of global equity markets, but four areas in particular are catching our attention. 2022 was a difficult year for markets with the MSCI World index returning -18%. Declining markets offer opportunities for stock pickers like ourselves to hunt for bargains that may have become unjustly caught up…

Emerging markets debt, a new dawn?

Recent years have called for caution on emerging markets debt, but we now see an increasing number of enticing opportunities. Emerging markets (EM) have recently faced an extremely challenging environment characterised by slowing global growth, geopolitical disruptions, persistent inflationary pressures and a severe tightening in global financial liquidity conditions. Such a global backdrop warranted a…

Stamp duty isn’t going anywhere

Nearly all economists and most politicians seem to agree stamp duty is a bad tax. But nearly all state and territory governments rely on it to keep the lights on. It’s a bad tax because it taxes homeowners every time they move, merely because they have moved. At A$40,000 per move on a median-priced home…

Back in bonds

With fixed income now standing out to us as offering good absolute and relative value, and the cycle potentially turning in favour of bonds, we are confident 2023 will look significantly different for this asset class. The last 12 months have delivered the worst returns for fixed income in decades – worse than the famed…

What will 2022 be remembered for?

Annual nominal returns of S&P 500 and US 10y Treasuries 1870-2022; data for 2022 is year to 01/12/22. Source: pre-2021 data from Òscar Jordà, Katharina Knoll, Dmitry Kuvshinov, Moritz Schularick, and Alan M. Taylor. 2019. “The Rate of Return on Everything, 1870–2015.” Quarterly Journal of Economics, 134(3), 1225-1298, post-2020 data from Refinitiv, Fidelity International, December…

Reflecting on US markets and the year ahead

I have mixed memories of my first Thanksgiving, soon after I went to study in Massachusetts in 1985. Kindly invited to a friend’s family celebration, I was driving my clapped-out Chevy station wagon (1971, beige, $200) through a snowstorm when one of the back wheels quite literally fell off. I was grateful, I suppose, that…

Can super secure women’s future?

Here are some stark numbers on the difference between men and women at the point when they retire: 80% of women are retiring without the super balance they need to fund a comfortable lifestyle. On retirement, women’s average superannuation account balance is around $70,000 less than men.[1] To be balanced, we should remember there are…

Equities Outlook 2023 – Market uncertainty to remain high

We expect a high degree of volatility and uncertainty for global equities in 2023, as stubbornly high inflation and interest rate rises lead to a rough landing for large parts of the global economy. However, earnings expectations are diverging across different economies, allowing investors to capitalise on select opportunities. Markets continue to expect central banks (led by the Fed)…