Analysis & Opinion>Trends & Opportunities

US senate result could reverberate for decades

The US senate result could reverberate for decades if under Democrat control the filibuster goes. Any quest to alter the constitutional order would be more proof of how primary contests are destabilising US politics. Mitch McConnell, first elected to the US senate in 1984, became senate majority leader in 2015 when Republicans regained control of…

Irrational Exuberance on Steroids

Investors old enough to remember the bursting of the dot.com bubble at the beginning of the 21st century may recall the observation made by former Chairman of the US Federal Reserve, Alan Greenspan, that irrational exuberance explains a market driving asset valuations beyond their fundamental worth. When the March bear market abruptly ended, the emerging…

Healthcare Stocks in the News

News moves entire markets and stocks within a market, both up and down. Today that core investing assumption is arguably more apparent than ever as any positive news on a potential vaccine for COVID 19 can send an entire index into an upward trend. However, it is equally true that current market conditions have produced…

Huawei’s window of opportunity closes

When the United Kingdom completed its telecom supply chain review last year it gave a green light to Huawei by concluding that nationality-based bans did nothing to improve network security and could actually harm it by weakening competition. Executives at Huawei celebrated what they saw as a victory for evidence-based decision-making. The decision also seemed…

Saudi Arabia eyes total dominance in oil and gas

Saudi Arabia’s Energy Minister Prince Abdulaziz claimed last week that the Kingdom will be the world’s biggest hydrocarbon producer “even” in 2050. “I can assure that Saudi Arabia will not only be the last producer, but Saudi Arabia will produce every molecule of hydrocarbon and it will put it to good use … It will…

Investing in Gold on the Dip

In September of 2018 clouds darkened the horizon of global economic growth with a seemingly never-ending US/China trade war and lowering growth forecasts from economists around the world. On cue, the price of gold rallied, as it generally does in uncertain times. Uncertainty was the watchword as economic indicators bounced back and forth with some…

Monetary Intervention Isn’t Quite Going To Plan

As interest rates approach zero in much of the western world, the linear relationship which economists expect from their monetary intervention isn’t quite going to plan. Rather than igniting animal spirits and spurring spending, declining rates are creating insatiable demand and stratospheric prices for safe haven assets whilst doing nothing for the velocity of money…

Markets Require Regulators Not Watchdogs

Markets require regulators. As Adam Smith, the champion of the invisible hand, notes in The  Wealth of Nations, when individual interests are left unregulated they work to turn competitive markets into monopolies. But what happens when regulators meant to check individual interests fail to promote the public interest? Consider Australia’s banking sector. The banking royal commission has…

New Silver Bull Coming?

Silver has been dead money over the past year or so, relentlessly grinding sideways to lower.  That weak price action has naturally left this classic alternative investment deeply out of favor.  Silver is extremely undervalued relative to gold, while speculators’ silver-futures positions are extraordinarily bearish.  All this has created the perfect breeding ground to birth…

RBA rates decision stuck between jobs growth and household debt

Is the Reserve Bank of Australia’s monetary policy on a collision course with itself? Quite possibly. The key data and evidence this week were employment figures in Australia, retail sales in the United States, and minutes from the Reserve Bank of Australia board and US Federal Open Market Committee (FOMC). First, the data. ABS figures…