Fed chair surprises waxing uber-hawkish
The Fed continued its extreme tightening this week with another monster 75-basis-point rate hike. While that was universally expected, the Fed chair surprised waxing uber-hawkish at his post-FOMC-meeting press conference. That yet again shocked the US dollar and gold into sharp opposing moves. But the Fed’s ability to keep doing that is ending, since the…
Is a global recession looking likely?
Economics is confusing at the best of times. But, at the moment, it’s downright counter-intuitive. Inflation is at its highest in decades, and we’re feeling the pain of the lower real wages that brings. Meanwhile, unemployment is its lowest in half a century, with virtually anyone who wants a job able to get one. Interest…
Will Tech Stocks Rebound in 2023
Global inflation began its ominous rise early in 2021, initially fueled by massive infusions of fiscal and monetary stimulus measures to combat the rising tide of the COVID 19 Pandemic. In short order, lockdowns and labor shortages in the global manufacturing sector ignited an equally ominous supply shortage. By the dawn of 2022 inflation had…
The end of coal-fired power is in sight
If future historians pick a point in time when Australia comprehensively turned its back on coal-fired generation, they may well point to AGL’s decision to bring forward the closure of Loy Yang A, the cheapest (excluding emission costs) power generator in the energy market spanning eastern Australia. AGL announced on September 29 that Loy Yang…
Now is the time to myth-bust investment truisms
For pretty much all of my working life, we have been able to hold onto a handful of truisms about investment. Expressions like ‘time in the market not timing the market’ become investment adages because their truth endures through the ups and downs of the cycle. But sometimes, as Jim Callaghan noted about politics in…
The impacts of deforestation on investors
Just as humans have towns and cities, the living world has forests. They are nature’s melting pot – home to countless forms of animal and plant life. What’s more, they play a critical role in stabilising our climate. Trees, plants, and bushes absorb carbon dioxide, sunlight and water, then convert the water into oxygen and…
52 Week Highs in the Eye of the Storm
The Australian Stock Exchange has managed to escape a plunge into official Bear Market Territory but there are some market experts of the opinion it is only a matter of time before we follow the lead of US markets into the abyss. All major US exchanges are in Bear Market territory and still falling. In…
The energy crisis is likely to last years
An overreliance on vanishing Russian fossil fuels will torment Europe. Europe is restarting mothballed coal-based power plants because the benchmark electricity price has exceeded 1,000% above its average of the past decade (where prices are set by the marginal cost of the last unit – essentially, the most expensive unit – of energy purchased to…
The importance of portfolio diversity
One thing we can usually rely on as investors is that things don’t all go wrong at the same time. If there are losers, there are generally some offsetting winners. We illustrate this with something we call a smarties table. It’s a grid in which each column represents a year within which each row shows…
From Squid Game to semiconductors
Since the late 1990s, the Korean Wave, or “Hallyu”, has been gaining momentum. The country has enjoyed phenomenal success in exporting its popular culture around the world, benefitting from growth in the internet, smartphones, and online video streaming along the way. Many will be familiar with K-pop and K-dramas, in particular last year’s Netflix hit,…
