|Why Codan Satisfies My Inner Geek|
Added On - 3/16/2018 7:08:18 PM
In Adelaide, well away from Australia's better known tech centres, is a small, innovative company that is leading the world in the technology it creates. Itís called Codan (ASX:CDA). And once you read about it, I think youíll agree that this is a company thatís worth a second look.
|Australia's Foreign Debt Problem|
Added On - 3/16/2018 7:05:27 PM
At almost $1 trillion, Australiaís net foreign debt is close to 60 per cent of GDP and renders us extremely susceptible to rising global interest rates.
|Dividends. What's All The Fuss?|
Added On - 3/15/2018 1:24:47 PM
In the last few days Opposition Labor Leader Bill Shorten has proposed a radical transformation of dividend imputation. It's worth looking at what all the fuss is about.
|U.S. IT Spending Growth is Coming Back|
Added On - 3/14/2018 9:05:25 AM
For the last two decades, U.S. IT spending, as a percentage of total fixed investment, has been oscillating in a narrow range, no longer growing like it did over preceding decades.
|Video - Global Equities Exposure In your portfolio?|
Added On - 3/14/2018 9:02:26 AM
In this week's video insight David compares Australia's top five businesses to the global top five and provides various observations.
|Who Gets Gold In The e-Commerce Olympics?|
Added On - 3/14/2018 9:00:16 AM
In today's memo I want to take the pulse of e-commerce across the globe given its becoming such a wonderful opportunity for some businesses, and such a disturbing threat for other businesses.
|Which Industries Are The Most Valuable Today?|
Added On - 3/9/2018 10:09:49 AM
Readers will know that we buy the publicly traded stocks of individual global businesses when we identify: (i) a high degree of business quality; and (ii) substantial evidence that the business is being underpriced by the market.
|Oz Retail Sales Update..Tailwinds For Some|
Added On - 3/8/2018 11:04:56 AM
Weíre keen to keep an eye on retail sales. You might recall we have previously explained that on the positive side, unemployment if very low, is very good for retail conditions.
|What WPP's Results Tell Us About Adspend In The Digital Age |
Added On - 3/6/2018 10:50:54 AM
WPP is the world's largest communications services group. As such, it's a good indicator of how digital disruption is affecting advertising budgets. So its 2017 results, and market outlook, make interesting reading.
|Video - How Do We React To Company Earnings?|
Added On - 3/6/2018 10:48:53 AM
In this week's video insight Daniel discusses how we react to company earnings, particularly where there is a material price move. Providing some insight into what we look for and how we make investment decisions based on what companies report.
|How To Use Discount Rates To Value Opportunities|
Added On - 3/5/2018 8:46:27 AM
All of a sudden, the discounted cash flow (DCF) method is in the news. If you're not a financial analyst, DCF probably doesn't mean much to you. But recent comments by Australia's Grattan Institute prompted me to explain how we go about valuing companies at Montgomery.
|Berkshire By The Numbers|
Added On - 2/28/2018 11:26:11 AM
Alas, this year's letter didnít turn out to be a blockbuster. So it is with a healthy dose of irony that we found something quite interesting for investors on the very first page - a page whose contents has been presented (albeit updated) 53 times.
|US Cash Rates Up From 0.5% To 3.5% In The Three Years To Late-2019|
Added On - 2/27/2018 10:44:19 AM
If our friends at Deutsche Bank are right in forecasting the US unemployment rate to decline from the current 17 year low of 4.1 per cent to 3.2 per cent by-late 2019, the US Federal Reserve are going to have a delicate balancing act as they lift the cash rate in trying to keep inflationary expectations under control.
|Which Retailers Are Surviving The Digital Disruption?|
Added On - 2/27/2018 10:43:31 AM
Digital disruption is hitting the retail sector harder than most. But not all retailers have been affected to the same extent. Recent research by Citi sheds light on the winners and losers this latest reporting season.
|A Crash Is Coming, Jim Rogers Says It Will Be A Doozy|
Added On - 2/26/2018 10:51:00 AM
Legendary investor, Jim Rogers, is a famed perma-bear. But this month Rogers stepped it up. He predicted that the next bear market will be 'the worst in our lifetime', fueled by a world that is laden with debt, and that it will occur within the next two years.
|Where Have The Profits Gone?|
Added On - 2/23/2018 10:47:45 AM
When brick-and-mortar retailers talk positively about e-commerce growth and profitability, investors should take these comments with a grain of salt.
|Should Australia Cut The Corporate Tax Rate?|
Added On - 2/20/2018 11:48:27 AM
Right now, there's a debate raging about the need to cut corporate tax rates in Australia. As usual, some of the arguments are overly simplified, if not misleading. The questions are: would a tax cut deliver the benefits spruiked by the government, and who would benefit the most? Let's take a look.
|It Takes More Than Interest Rates To Keep A Good Market Down!|
Added On - 2/20/2018 11:26:27 AM
The direction of the equity market is inherently unpredictable, and more so in the short run. What is clear is that there is more at play than just interest rates.
|Beware The Pitfalls Of Speculating On This Market|
Added On - 2/19/2018 10:46:46 AM
Most of us know of the volatility index, otherwise known as the VIX. But the inverse index - the XIV - was little known until a recent story surfaced about a trader who lost $4 million when the XIV lost 96 per cent of its value in one day. It was a sobering reminder that this bull market can't roll on forever.
|Amazon Disruption Continues|
Added On - 2/16/2018 9:57:42 AM
Amazon in recent times has amassed a reputation for being disruptive to traditional firms and industries, and rightly so. The company has up-ended the traditional brick-and-mortar retail model, and the company's ambitions do not end there.
|Why We Aren't Concerned To See Volatility Rising|
Added On - 2/14/2018 12:34:39 PM
In this week's video insight Tim gives you a perspective on how we're thinking about the recent market moves and trying to position for a good long-run outcome for our investors.
|Why We're Still Cautious On Retail Stocks |
Added On - 2/14/2018 11:01:50 AM
With household costs going up, and the wage index comping down, it's little wonder Australians are finding it harder to save.
|Make Market Corrections Your Ally|
Added On - 2/13/2018 11:24:47 AM
Recent experience excepted, corrections are typically more frequent and regular than many would prefer, so investing should not occur without acceptance of this. That said, it's important to prepare, first by making the right investments, and secondly by adopting the right temperament.
|Will The 'Everything Bubble' Pop This Year?|
Added On - 2/12/2018 9:57:52 AM
As a new year begins, market predictions are coming in thick and fast. Significantly, in recent days, the views of some of the giants in the industry are echoing those we hold and have shared with our readers. If we are right, then investors will need to be rather more nimble than usual this year.
|Why Helicopter Parenting Can Set Up Kids For A Crash|
Added On - 2/9/2018 10:56:45 AM
The beginning of the school year always coincides with media reports about how to help your kids succeed. The reports put increasing pressure on parents, who are now expected to ensure their kids excel in every pursuit they tackle. It's all part of helping them on their life's journey, right? Well, maybe not.
|Sometimes 'Why' Is Not The Right Question|
Added On - 2/8/2018 3:21:06 PM
No one knows exactly why the Dow Jones crashed 23 per cent on October 19, 1987, even after 30 years of study and analysis. Here's what we do know.
|Why Rising Interest Rates Have Sent The Dow South|
Added On - 2/7/2018 11:30:35 AM
The dilemma we have is associated with synchronised global growth and US corporate tax cuts, meaning markets are facing a tricky balancing act with rising inflationary expectations.
|Video - Cutting Through The Noise|
Added On - 2/6/2018 11:14:55 AM
In this week's video insight George discusses the importance of thinking about the impacts of the news on a stock's valuation and only acting when it changes your thesis and the attractiveness of the investment.
|Private Patients In Public Beds|
Added On - 2/6/2018 11:09:42 AM
Unless you've made a home under a rock, you would have noticed that over the last decade private health insurance premiums have been increasing substantially, as high as 6 per cent annually as an industry.
|Looking For The Underlying Market Structure|
Added On - 2/2/2018 11:17:48 AM
We recently undertook an analysis to try to better understand the structure and behaviour of the equity market, with a view to identifying cause and effect relationships that drive investment performance. While the work is ongoing, some interesting early findings are emerging.
|Why Not Everyone Is A Value Investor|
Added On - 2/1/2018 11:08:15 AM
In simple terms, value investing is trying to buy the proverbial dollar for fifty cents. In our eyes, buying stocks for less than they are worth is a sensible, time-tested way to making money in the stock market. But if this is the case, why doesn't everyone adopt a value investing approach?
|Video - Common Valuation Mistakes|
Added On - 1/31/2018 10:43:17 AM
In this week's video insight Stuart discusses discounted cash flow valuations and the most common mistake made in estimating the value of a company using this valuation methodology.
|The Future Of Transportation|
Added On - 1/30/2018 11:42:42 AM
One theme that we're paying particular attention to at Montgomery is the prospect of autonomous cars once thought as an unlikely futuristic scenario, it now appears that at least in the next 30 years this technology will become widely available.
|7 Bitcoin Alternatives|
Added On - 1/25/2018 10:35:11 AM
This is a follow-up piece to part 1, in which we discussed some of the technical limitations of the Bitcoin blockchain implementation. Today I'm going to give a brief introduction to seven alternative cryptocurrencies
|If The VIX Is Low, Is It Time To Go?|
Added On - 1/23/2018 12:45:39 PM
The Volatility Index - better known as 'the VIX' - is the most widely followed measure of stock market risk. Since March 2012, the VIX has remained stubbornly low, and some see this as a sign of a frothy market that's about to sell off. I don't necessarily agree, but what's the best investment strategy just in case they're right?
|Why Bitcoin Is Uninvestable|
Added On - 1/22/2018 11:00:00 AM
A Bitcoin investment is an oxymoron, with a purchase of bitcoin falling into the domain of speculation.
|Global Markets - What To Be Wary Of In 2018?|
Added On - 1/19/2018 1:18:53 PM
Calendar 2017 can be characterised as a year of strong and stable returns for global equity investors. The year delivered strong annual returns with the MSCI World Total Return Index increasing by 22.4 per cent (in US dollar terms).
|Which Companies Will Gain From A Stronger Aussie Dollar?|
Added On - 1/18/2018 1:03:42 PM
If you're about to travel to the US, you'll be gladdened by the trajectory of the Australian dollar (AUD). After falling to around US75c in December, it's now buying around US80c. For Australian companies, however, the picture is far more complex. So I thought I'd have a look at some of the likely winners and losers from changes in the AUD.
|5 Burdens Of Bitcoin|
Added On - 1/18/2018 12:58:13 PM
Whilst it may have a first mover advantage - that doesn't make it the only cryptocurrency worth understanding. Today I want to discuss some of the technical limitations of bitcoin.
|Video - How Does Big Data Impact Businesses?|
Added On - 1/17/2018 10:19:05 AM
In this week's video insight Scott discusses big data and how companies can exploit this data for sales and profitability improvements.
|The Case For & Against Consumption Growth|
Added On - 1/16/2018 9:50:44 AM
Late last year, I discussed some of the main arguments underpinning a bearish outlook for the Australian consumer and, in turn, major bank loan book growth. But what about the counter argument? In particular, could the tightening labour market create stronger wage growth and thereby boost consumption?
|Farewell 2017, Hello 2018|
Added On - 1/10/2018 4:11:09 PM
As 2017 has drawn to a close, let's take a look at the year that was. Excluding dividends, the Australian market put on 7.8 per cent in 2017, and 7.0 per cent in the six months to December.
|The Case For and Against Consumption Growth|
Added On - 12/20/2017 10:37:52 AM
For some time, we have outlined our concerns regarding the growing constraints on the Australian household sector due to various elements. In the first part of a two-part blog I will identify one argument. Will the slowing or a reversal of household wealth creation have negative implications for many companies.
|Keep An Eye On US Ten-Year Bond Yields In 2018|
Added On - 12/20/2017 10:34:08 AM
The structural decline in US ten-year bonds from 15.8 per cent in 1981 to 1.3 per cent in 2016 has seen both record lows and generational lows.
|St James The Platform Of Platforms|
Added On - 12/19/2017 10:11:19 AM
On 27 July, St James's Place (SJP) (LSE: STJ) released an updated set of financial results for the first half of fiscal year 2017. While the performance was nothing shy of tremendous, we were most excited by a new insight into SJP's business that emerged from the report and management discussion, and has significant implications for the value of the stock.
|Is Bitcoin A Rational Investment?|
Added On - 12/15/2017 1:52:43 PM
Bitcoin has enjoyed an extraordinary surge in both value and public attention recently. The chart below maps the rise in the price of a Bitcoin in USD over the last few years, and a similar chart could probably be plotted for the number of column inches, the number of internet searches and the number of experts confidently proclaiming it to be either a speculative bubble, or the gold of the future.
|Underestimating The Power Of Compounding|
Added On - 12/14/2017 4:59:10 PM
Our brains are not very good at accounting for the effects of compounding and exponential growth. Take for example the classic tale of a con man who presented the king with an offer.
|A Distribution Of Valuations|
Added On - 12/14/2017 4:56:48 PM
Having finished an advanced mathematics degree, one question my peers often ask me is how does maths fit into investing? Today I wanted to focus on one of the ways maths can help shape investing decisions - in particular: probability distributions.
|Six Reasons To Be Wary Right Now|
Added On - 12/12/2017 11:02:46 AM
This year we've seen the most synchronized expansion of global economic activity since the GFC. Is this realistic? I don't think so. I can think of six reasons to be wary right now.
|Is Investing The Same As Gambling?|
Added On - 12/11/2017 10:42:37 AM
The truth is that there are numerous similarities between investing and gambling.
|St James's Place Is The Platform You Never Noticed |
Added On - 12/8/2017 11:37:13 AM
We view the platform business model as one of the greatest business models for investors to own. Platform businesses provide the necessary common infrastructure upon which an ecosystem of businesses, products and services can be accessed by users, customers, vendors and partners.
|We Are Living In A Personalised World|
Added On - 12/8/2017 11:34:36 AM
When a CEO is faced with the conundrum of how to deliver personalised service, the starting point is always data. What do you know about your customer? About their preferences? Their needs? Their spending power? Their creditworthiness?
|The New Phase Of Big Data|
Added On - 12/7/2017 11:00:56 AM
In a constantly connected world, data volumes are exploding, and there are genuine benefits to companies that are able to be capitalise on the data they capture from customers.
|Not All Platforms Are Created Equal|
Added On - 12/7/2017 11:00:10 AM
Not all platforms are created equal, and it would serve investors well to distinguish between different types of platform businesses.
|Why You Need To Limit Your Downside Risk|
Added On - 12/6/2017 12:02:14 PM
In preparation for the annual Montgomery Global offsite, where the team gathers to discuss our investment process and whether tweaks can be made to improve performance, each team member is required to study Chapter Two of Nassim Taleb's book, Fooled By Randomness.
|Jupiter Reaching For The Stars|
Added On - 12/5/2017 11:34:46 AM
We were recently asked what we see in Jupiter Fund Management (LSE: JUP), a UK-based business owned in our global portfolios. Without giving away our entire analysis, the following note seeks to lay out, in simple terms, why we believe this is a high quality global business that is currently undervalued.
|Demand For Planes Will Keep Airbus Flying|
Added On - 12/4/2017 10:30:07 AM
Airbus estimates that there are currently just over 20,000 aircraft in service around the world, and that this should expand to more than 42,000 by 2036. While this doubling in the global fleet of planes will require an additional 22,000 aircraft over 20 years the opportunity for manufacturers is even greater again.
|Out Of Work Or Pay Rise?|
Added On - 12/4/2017 10:28:27 AM
Recently we have been fascinated by the inexorable rise in the share prices of tech companies. You might recall we've written about, and looked with suspicion at, the combined market value of US$140 billion for Tesla, Uber and Twitter, despite a combined profit of zero.
|Who Wins When US Yields Go Higher?|
Added On - 12/1/2017 11:00:25 AM
For the first time in 20 years, 2-year US government interest rates have gone above 2-year Australian government interest rates. This is a significant turning point, and could signal the start of a new economic phase. Australian investors will need to be mindful of the consequences.
|Don't Buy Trading Sardines|
Added On - 12/1/2017 10:59:01 AM
Value investing can take many forms, all of which revolve around purchasing a stock at a discount to the investor's assessment of the intrinsic value of the business. Montgomery Global's fund offerings adopt a value framework but apply a further requirement: investments must be in high quality businesses with sound prospects.
|Looking For Value? Don't Ignore The Large Caps|
Added On - 11/29/2017 10:44:26 AM
If a value investor with a long investment horizon had bought Apple shares when the price languished in the $90s, they would be sitting on more than a 50 per cent annualised return today. Not a bad return on the largest of large caps that money can buy.
|TradeMe Looks Set For Long-Term Revenue Growth|
Added On - 11/29/2017 10:42:30 AM
While the overall results were roughly in line with market expectations, the composition was slightly different.
|Never Underestimate The Power Of Incentives|
Added On - 11/28/2017 10:45:22 AM
For long term outperformance in investing it is necessary to have a rigorousrigorous, logical process that is followed with discipline.
|Positioning For An Electric Vehicle Future|
Added On - 11/24/2017 10:15:40 AM
As we have written previously, it seems reasonable to expect that the rate of adoption of electric vehicles (EVs) will increase markedly in years to come.
|The Benefit Of Having Cash As Dry Powder|
Added On - 11/23/2017 10:00:51 AM
I recently had the pleasure of travelling to Brisbane to discuss our upcoming ASX-quoted Montgomery Global Equities Fund (Managed Fund) (ASX: MOGL). As always, our adviser and broker clients had some great questions about MOGL, including: what's the benefit of the significant cash holding?
|Why It Can Be The Right Move To Sell 'Too Early'|
Added On - 11/17/2017 8:05:33 AM
If you've ever sold a stock that's rallied strongly, only to see it then rise even further, you know how difficult investing can be - particularly the timing of your exit. But is selling 'too early' the wrong move? Not always.
|Investors Vomit All Over Snap's Earnings, Again|
Added On - 11/16/2017 10:45:28 AM
Snap Inc is now trading well and truly below its IPO price of $17, and serves as another stark warning against getting caught up in the IPO hype.
|What's The Conundrum Investors Face Today?|
Added On - 11/15/2017 10:44:30 AM
In this week's video insight, Roger discusses the conundrum investors face today, looking at two parts of the investment equation the economy and prices and other factors.
|How Much Risk Are You Willing To Bear?|
Added On - 11/15/2017 10:42:51 AM
After the fun we had with our recent investment puzzles I thought I would do another one. This one comes from MIT Sloan Professor, Andrew Lo, who has developed some outstanding contributions to the field of finance.
|Value Investing In The Age Of Machine Learning|
Added On - 11/14/2017 12:59:45 PM
The advent of machine-driven investing means that computers can quickly pounce on stocks that the market seems to have mispriced. This development has raised the bar for value investors seeking to outperform the market. But it's not the beginning of the end for human stock-pickers.
|Three Factors That Drive Private Hospital Profits|
Added On - 11/13/2017 11:01:12 AM
As an investor, there's a lot to love about private hospital businesses, like Ramsay Healthcare (ASX:RHC) and Healthscope (ASX:HSO).
|Two Reasons We Don't Invest In Mining Firms|
Added On - 11/13/2017 10:55:03 AM
As most of our readers likely know, you are very unlikely to see any Montgomery managed funds invest in mining companies. And recent news out of China supports our investment approach.
|Bank Results In A Nutshell|
Added On - 11/10/2017 10:40:43 AM
Stuart Jackson, Portfolio Manager for The Montgomery [Private] Fund and Senior Analyst whipped up the following summary of the Big Four bank's 2017 results for a TV interview during which the host decided to chat about something else.
|Westpac's Global and Domestic Forecast|
Added On - 11/8/2017 11:24:59 AM
Here's the outlook according to Westpac. The following screenshots of two slides from Westpac's results presentation summarises the banks official view about global and domestic growth.
|Why REA Group Continues To Be A Core Montgomery Holding|
Added On - 11/7/2017 6:04:28 PM
REA Group's (ASX: REA) share price has soared around 50 per cent over the last 12 months, with the market confirming our strong conviction that this is a really high-quality business.
|After A Strong Year, Can Investors Start To Relax? Actually, No |
Added On - 11/6/2017 1:28:16 PM
As global share markets head inexorably north, it's easy to start feeling more relaxed. But my friend Jonathan Rochford offers a word of caution.
|GE's A La Carte Earnings Menu|
Added On - 11/3/2017 3:08:27 PM
Upon opening GE's (NSYE: GE) quarterly earnings press releases, the first thing that readers see on the top half of the first page is the below image.
|Active Vs Passive When Prices Are Extremely Stretched|
Added On - 11/3/2017 3:02:22 PM
There's a pithy marketing one-liner that has almost single-handedly produced a multi-billion dollar index-fund and ETF industry. It goes something like this; 'Most active fund managers underperform the index.'
|Amazon: Rewarding Capital & Labour!|
Added On - 11/2/2017 11:38:34 AM
Amazon, the world's largest e-commerce retailer outside of China, reported another superb financial result at the end of last week as the company continues to disrupt the brick-and-mortar stores.
|Global Investing: Just Buy The Megatrend, Right?|
Added On - 11/1/2017 10:43:56 AM
In this video insight Andrew discusses if investing globally is simply a case of buying the right megatrends?