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Roger Montgomery
Investors In Index Funds Should Be Very Cautious
Added On - 4/28/2017 10:09:36 AM
Investors who think ETFs give them safety through diversification are no more protected than those who invested in mortgage backed collateralized debt obligations (CDOs) before the GFC.
Video - Business Quality
Added On - 4/27/2017 11:17:30 AM
Tim Kelley discusses business quality - what it is, why we focus on it, and what it means for long-term investment returns.
Low Interests Are Not An Aberration
Added On - 4/26/2017 11:33:04 AM
If you're a baby-boomer, you grew up with annual interest rates in the low teens. If you're a millennial, interest rates above five percent are difficult to imagine. But what is the normal state of play, and what can we expect interest rates to do in the foreseeable future?
Why Have Sirtex Shares Been Dumped?
Added On - 4/26/2017 11:32:16 AM
Over the weekend, the results were released of a trial comparing the efficacy of two treatments for late stage liver cancer. The treatments were SIRT, pioneered by Australian biotech, Sirtex, versus Sorafenib. The results were generally positive for SIRT. So why has the market responded so harshly?
What Can We Make Of Nine's Resurgence?
Added On - 4/24/2017 12:32:01 PM
Warren Buffett once referred to Mr Market as a 'drunken psycho', lurching one way and then the other. So it would be interesting to know what he would make of the bounce in the value of Nine Entertainment. Despite facing crippling headwinds, Nine's share price has jumped around 50 percent since October.
Why The Trend Can (Often) Be Your Friend
Added On - 4/24/2017 12:30:59 PM
Even if you're a long-term fundamental investor - like us at Montgomery Investment Management - it can pay to use technical analysis when evaluating the future prospects of a business. Because, it seems, there is some truth to the old adage that 'the trend is your friend'.
How Low Can The Iron Ore Price Go?
Added On - 4/20/2017 11:09:33 AM
A quick look at the iron ore price chart is enough to tell you that all is not well. After hitting a multi-year high of US$94.86 in February, the spot price of benchmark 62% fines fell over 4% on Tuesday to US$63.20. And with more supply soon to come on stream, this rout could have further to run.
Telstra & TPG, Who Will Win Share?
Added On - 4/18/2017 11:09:43 AM
TPG has confirmed its intention to build a fourth mobile network in Australia with its successful A$1.26bn acquisition of two 10MHz spectrum licenses in the most recent Government tender.
Using Short-Side Research To Identify Great Businesses
Added On - 4/13/2017 2:47:03 PM
The Montgomery Global Fund is one of Australia's leading global equity funds. Since inception in July 2015, the fund has turned $100 into $116. A unique feature is that our global equity fund has actively benefited from short-side research.
Could Automation Eat Your Job?
Added On - 4/13/2017 10:45:58 AM
As if there's not enough to worry about these days. Now, a report by PwC estimates that automation will put at risk a large percentage of jobs in developed countries within 20 years.
Video - The Demise Of Nine
Added On - 4/12/2017 11:39:29 AM
Since 2015, Nine's television revenues have been declining. In an age of Netflix, Apple TV and YouTube, consumers face a much wider choice of video on demand than they ever have before. And this means free-to-air television audiences in Australia are declining - by around 5% per annum. Is Nine's current stock price of around $1.25 per share justified?
Improve Your Returns In One Simple Step
Added On - 4/12/2017 11:29:44 AM
If you invest your own money, and you're looking to improve your performance, here is one simple tip you should consider: measure your returns. This may sound like common sense, but it's remarkable how many of us are averse to critical reflection.
U.S. Retail Is Over-Stored
Added On - 4/11/2017 10:43:04 AM
Countless U.S. retailers are being pressured by the well-publicised impact of e-commerce. E-commerce giants such as Amazon have changed the psyche of the consumer and their approach to shopping.
After A Hefty Price Fall, Is IPH Now Good Value?
Added On - 4/10/2017 10:40:22 AM
IPH Limited (IPH) listed at $2.00 in late 2014 and soared to over $9.00 just one year later. The market clearly liked the story. But for the past 12 months, the share price has steadily declined and IPH now trades around $5.00. After this sort of a fall, we had a good look at the business to see if IPH had become a bargain.
How Can A Business Gain A Competitive Advantage?
Added On - 4/7/2017 11:11:41 AM
As value investors, we are always on the lookout for businesses with a competitive advantage. Having a competitive advantage can give a business an edge over rivals and an ability to generate greater value for shareholders. But what do we really mean by competitive advantage, and how does it come about?
Does Telstra Have Their Eye On Vita's Stores?
Added On - 4/6/2017 11:42:47 AM
What a week it's been for Vita Group (VTG), which operates over 100 Telstra stores. On 4 April, Fairfax published an article referring to a 'leaked' Telstra draft document that said it is considering taking back high performing stores from licensees. VTG's share price promptly plummeted. After VTG rebutted the leak, its share price rebounded. So, who should we believe?
Is Money Laundering Distorting Property Prices?
Added On - 4/6/2017 11:42:02 AM
Another cause of our overheated property market has come to light in a recent report by Transparency International (the global anti-corruption watchdog). Based on their findings, it appears that money laundering by foreign 'investors' is at least partly to blame.
Video - Resources, Retail & Banking Outlook
Added On - 4/5/2017 12:04:12 PM
Roger Montgomery looks at the outlook for the resources, retail and banking sectors.
Five Rules To Win A Price War
Added On - 4/4/2017 10:39:44 AM
With Amazon set to enter the Australian market later this year, many of Australia's leading retailers are gearing up for the fight of their lives. We think they would do well to take note of recent analysis by MIT Sloan School of Management, which identifies five rules for management to follow to maximise their chances of success.
Watch Out Retailers: Here Comes Amazon
Added On - 4/3/2017 11:03:27 AM
Amazon is about to hit our shores, and its arrival is bound to be as disruptive here as it has been in the U.S. But which retailers should be most worried? And is there anything they can do to protect market share in the face of this retail juggernaut?
NYSE Margin Debt Hits A Record
Added On - 4/3/2017 10:55:53 AM
NYSE margin debt levels hit a record in February, reaching $528 billion. For context this is 39% above the 2007 peak in NYSE margin debt. So what are the implications of record margin debt and does it hold any predictive power?
Brace For Increased Bank Capital Requirements
Added On - 3/31/2017 10:33:59 AM
One of the drivers behind the recent bank rally has been a perception we are over the worst of the risks around increasing regulatory capital requirements. But are we? A report card from the Basel Committee on Banking Supervision indicates this view might be a little premature. If so, there could be ramifications for banks and property investors alike.
Can Coles & Woolies Fight The Aldi Onslaught?
Added On - 3/30/2017 11:12:44 AM
So far, Aldi has had a relatively small impact on Coles and Woolworths. But that is set to change as the German retailer continues its expansion strategy.
5 Issues In The Way Of Trump Tax Reform
Added On - 3/30/2017 11:10:04 AM
Tax reform is one of the Trump administration's key policy ambitions. But realising that ambition may not be so easy - a number of key issues could stand in the way.
Could New Lending Restrictions Backfire?
Added On - 3/28/2017 10:10:27 AM
The law of unintended consequences states that actions - particularly by government - can have adverse effects that are unanticipated or unintended. This law could soon play out as a result of lending restrictions placed on the major banks by the Australian Prudential Regulation Authority (APRA).
Why We Think BWX Is Worth Watching
Added On - 3/24/2017 11:05:04 AM
A little-known company we hold is BWX Limited. This small Melbourne-based company owns a range of skin and hair care brands.
What Now For Traditional Media?
Added On - 3/24/2017 11:01:44 AM
A couple of decades ago, print media was critical to reaching an audience; now it's relevance has significantly declined. And this switch in advertising spending from traditional media to digital media shows no sign of letting up.
Rising SKEW Means That Tail Risk Is On The Rise
Added On - 3/23/2017 10:32:48 AM
Most of us know about the VIX, which gives an insight into investor sentiment and expected levels of market volatility. But we seldom hear about the SKEW, which is an index derived from the price of S&P 500 tail risk.
Video - How To Generate Stock Ideas
Added On - 3/22/2017 10:27:32 AM
At Montgomery, we strictly adhere to a value philosophy with the goal of purchasing businesses with defensible economic moats at cheap prices. So how does the Montgomery team think about finding attractive investment opportunities?
How The Pie Is Being Sliced
Added On - 3/21/2017 10:34:45 AM
In the recent US elections, Donald Trump successfully harnessed strong voter discontent about rising inequality. He had a point. Recent data show an ever widening gap between the haves and have nots, and falling confidence in the political class.
Resmed's AirFit Masks Appear To Be Boosting Share
Added On - 3/21/2017 10:33:13 AM
Last November, Resmed launched its new range of AirFit masks. This led us to wonder if the uptick in growth in Resmed's second quarter results was due to the new masks. Early indications are that the masks have been well received, and are increasing the company's market share.
What The Repeal Of Obamacare Will Mean
Added On - 3/20/2017 9:41:02 AM
When it comes to political footballs, U.S. healthcare is hard to beat.
Road Ahead Looks Good For Outdoor Advertisers
Added On - 3/20/2017 9:37:31 AM
Historically, outdoor advertising has captured a relatively small share of the overall advertising market. It has also tended to be even more cyclical than the broader advertising market given its impact and return on investment has been less measurable than other forms of media. But this is changing.
Video - What's The Story With Vita Group?
Added On - 3/16/2017 1:15:00 PM
In this video we run through the series of events we've seen in Vita Group Limited over the past 6 months. Viewers should note that The Montgomery Fund and the Montgomery Private fund are both holders of Vita Group shares.
Why Chorus Limited Looks Undervalued
Added On - 3/16/2017 1:11:50 PM
One slightly unusual holding in our domestic funds is Chorus Limited (CNU), New Zealand's largest owner of telecommunications networks.
Do I Really Care About Global Purchasing Power?
Added On - 3/15/2017 10:58:56 AM
Meet Clarence. Clarence is a retired Australian who has enough cash to live on for the rest of his life and has decided he has no need to invest it in the market (lucky him). Clarence can put his money in an Australian bank account, earn a little interest, and go about enjoying the rest of his life.
Is Technical Analysis Mere Hocus Pocus?
Added On - 3/15/2017 10:56:01 AM
As an investor, you'll have seen some market commentators extol the virtues of 'technical' analysis, or charting. And it's easy to believe there is some science behind the approach. But is there really?
Retail CEOs Throw In The Towel On Quick Recovery
Added On - 3/14/2017 11:02:10 AM
The year saw the bankruptcies of a number of mall-based retailers, including Aeropostale, American Apparel, Pacific Sun and The Sports Authority.
Update On Isentia
Added On - 3/10/2017 11:56:00 AM
Following our earlier comments on the Isentia (ASX:ISD) result, we have now met with management, of Isentia as well as major competitor, Meltwater, and formed a view on our holding.
Torpedo Alert: The High-Risk Stocks We Are Avoiding
Added On - 3/10/2017 8:26:16 AM
One of the unpleasant realities of equity market investing is that, from time to time, a portfolio company will deliver disappointing news and suffer a rapid and dramatic decline in market value.
Seek's Half-Year Result
Added On - 3/9/2017 11:05:13 AM
Seek is a high quality business that has been a core part of our portfolio for a few years. We like Seek for a number of reasons.
Why It Pays For Investors To Keep Informed
Added On - 3/7/2017 1:06:45 PM
A recent article by academics from the London Business School shows why it's so important to stay informed of trends and movements in the business landscape
ETFs Are Boosting The Value Of Active Funds
Added On - 3/6/2017 11:36:53 AM
Across the investment world, ETFs are on the rise. And for good reason - as Tim recently noted, ETFs outperform many actively managed funds. But the growing popularity of ETFs is having another consequence - it is making outperforming managed funds even more valuable, and pushing underperforming funds out faster.
Wall St Loves Trump Now, But Will He Really Bring Change?
Added On - 3/6/2017 11:35:18 AM
The S&P 500 has surged around 10 per cent since Donald Trump's election last November, boosted by expectations he would lower company tax, ease bank regulations and raise infrastructure spending. Which is why his inaugural Speech to Congress earlier this week was so eagerly awaited by investors. But will his talk be translated into action?
Buffett's Wealth Proves The Power Of Compounding
Added On - 3/3/2017 10:59:22 AM
Let's face it, we can't all be as successful as Warren Buffett. But there are some investment lessons we can definitely learn from him. And one of those is to profit from the power of compounding.
Trump's Border Tax & For Your Portfolio
Added On - 3/3/2017 10:57:23 AM
In recent weeks, the Montgomery Global team has spent a lot of time thinking about the implications of a potential US border adjustment tax ('BAT') and repositioning our portfolios to address some of the asymmetric risks we identified.
Was Ramsay's Rex Really Worth A Billion Dollars?
Added On - 3/2/2017 1:07:16 PM
Ramsay Health Care produced a great result for the first half of FY17 and kept its tradition of upgrading full-year guidance. The market should have received this result well, particularly in light of weak industry activity, were it not for one bit of unexpected news - the retirement of CEO, Chris Rex.
Should You Take Buffett's Advice & Opt For Index Funds?
Added On - 3/1/2017 1:26:21 PM
You may have read the recent comments by Warren Buffet to Berkshire Hathaway shareholders about the merits of active fund management versus index funds.
How Berkshire Views Investments In China, Airlines & Tech
Added On - 3/1/2017 1:23:34 PM
If you had money to invest, where should you put it? According to Warren Buffett's business partner, Charlie Munger, you should look at China.
REA Continues To Innovate & Grow
Added On - 2/28/2017 12:41:51 PM
With property prices still heading north - particularly in the major capitals - we recently took the opportunity to meet with the CEO and CFO of REA Group (ASX: REA), Tracey Fellows and Owen Wilson. Our discussion gave us a greater insight into REA's 1H17 result and the prospects of Australia's leading online real estate advertising company.
Trump Has Been 'Great' For US Media Businesses
Added On - 2/27/2017 11:09:35 AM
Trump's win have been an undeniable boon for news organisations, which have enjoyed a massive boost in subscriber numbers.
How Facebook Has Become The Go-To Platform For Advertisers
Added On - 2/27/2017 11:08:53 AM
Facebook is an advertising business, and it competes with other advertising businesses - the majority of which should be worried.
Is Trump's White House Itching For Another War?
Added On - 2/27/2017 11:07:34 AM
As investors, there are many macro events we have to consider, both positive and negative. Since the election of Donald Trump, we've had to consider one more - the prospect of a war involving the US.
Companies Of All Sizes Can Produce Better Returns
Added On - 2/24/2017 11:02:47 AM
Do you ever wonder why some funds limit themselves to the leading stocks in an index? So do we.
Video - A Great Display For Carsales
Added On - 2/23/2017 11:15:32 AM
We've had a pleasing reporting season thus far, and Carsales is one of our holdings that produced a great result.
Reviewing Isentia
Added On - 2/23/2017 11:13:05 AM
As many investors have noted, iSentia Limited (ASX: ISD) delivered a poor earnings announcement yesterday.
Why Our Oil Refineries Are Shutting Down
Added On - 2/22/2017 10:42:40 AM
Back in the 1960s, manufacturing contributed 25% to Australia's GDP. Today, this figure has dropped below 9%, largely due to an inability to compete on cost.
Macquarie Analysts Warn On Rising Debt Wave
Added On - 2/21/2017 11:18:47 AM
Analysts at Macquarie Research, Viktor Shvets and Chetan Seth, have just released an excellent piece titled 'Surfing the debt wave. Don't look down'.
Fulfillment Gives Amazon Yet Another Way To Boost Profits
Added On - 2/20/2017 11:31:42 AM
Amazon never ceases to astound. We've written before about Amazon Prime, and the company's disruptive force wherever it goes. Today, we shine a light on a low-profile Amazon business that has quietly grown into a profitable juggernaut - Fulfillment by Amazon (FBA).
Insperity Reaccelerates
Added On - 2/20/2017 11:29:31 AM
Insperity has been our best long performer in our global portfolios to date, with the stock nearly doubling since we first bought it about one year ago.
The Spectacular Growth Of eSports
Added On - 2/17/2017 11:14:34 AM
eSports is increasingly becoming an area in which video game publishers are trying to gain a foothold.
Video - Review Of Reporting Season
Added On - 2/16/2017 5:12:08 PM
If we look at the overall market, the ASX200 Index is up close to 3% in the first two weeks of February, so across the overall market, the news so far appears to be pretty good. In this video Portfolio Manager Tim Kelley discusses a few stocks held in The Montgomery Fund.
Value Investing Giant Issues A Warning
Added On - 2/16/2017 5:09:13 PM
Seth Klarman's Baupost Group is the world's 11th largest hedge fund. And Klarman, a renowned value investor, has sometimes been compared to Warren Buffett. So when he offers his analysis, it's worth reading. Which is why we're pleased to bring you excerpts from Klarman's latest investor letter.
Apple's Share Price Bounces Back
Added On - 2/15/2017 10:33:08 AM
Investors in Apple stock are being rewarded for their patience by holding on as the share price pendulum swings back from unjustifiably low levels.
Retailers Make Hay While The Sun Shines
Added On - 2/15/2017 10:31:11 AM
Furniture and appliance retailers, like JB Hi-Fi and Harvey Norman, are enjoying their best trading conditions in a decade, buoyed by low interest rates and a renovation boom. Alas, these sunny conditions won't last.
Has Italy's Economy Hit Crisis Point?
Added On - 2/14/2017 1:22:50 PM
These days, most investors looking beyond our shores are focused on the US. But the situation in Europe is also worth watching closely, particularly in Italy - the world's eighth biggest economy - which appears to be in dire straits.
IDP Capitalises On Global Demand For A Good Education
Added On - 2/14/2017 1:19:19 PM
We hold IDP in the portfolios and consider it well placed strategically to benefit from rapidly increasing global demand for high quality tertiary education
Trump Delivers More Bank Dividends
Added On - 2/13/2017 11:44:07 AM
If Trump loosens the shackles of bank regulation, expect a return to the bad old days of 'profit before care', a rally in financial stocks, followed by a more ominous fallout.
Is Social Media Affecting Your Performance?
Added On - 2/10/2017 11:03:44 AM
Is it becoming more difficult to maintain a steady focus in a world of omnipresent social media distractions?
When Directors Sell, Should You Sell Too?
Added On - 2/9/2017 12:26:11 PM
When directors buy or sell shares in their company, most people believe they are sending a strong signal to the market about the firm's prospects. But how strong is the correlation between director trades and share price movements? And should you buy or sell because a director has too? We did some research to get closer to the truth.
It's Getting Tougher Out There For Our Retailers
Added On - 2/9/2017 12:23:00 PM
Recently, we've seen a number of established businesses hit the wall, under the twin assaults of online shopping and the entry of international brands. The bad news is: it's not about to get any easier.
Mr Turnbull, It's Time We Stopped Selling Off The Farm
Added On - 2/8/2017 11:42:17 AM
Malcolm Turnbull is rumoured to be very concerned about Australia losing its coveted AAA credit rating. Politically, it would be a terrible look were it to occur on his watch. Our shaky credit rating reflects the failure of successive governments to deal with our most pressing economic issue - the Balance of Payments Current Account Deficit. And I don't see things changing soon.
Video - To BHP Or Not To BHP?
Added On - 2/7/2017 11:36:05 AM
In this video insight we explain the recent period of under performance of The Montgomery Fund. Why has the index surged ahead and can this continue?
Watch Out For The Market Disruptors
Added On - 2/7/2017 11:23:05 AM
In our globalised, high-tech world, market disruptors - like Aldi, Amazon and artificial intelligence - are coming faster than ever before.
Solving The Prisoner's Dilemma
Added On - 2/7/2017 11:20:52 AM
The Prisoner's Dilemma provides a framework for understanding how to strike a balance between competition and cooperation. It's possible for rival firms in a competitive market to solve the Prisoner's Dilemma, without collusion, and for their mutual benefit. Let's look at how it can be done.
Resmed's Growing Customer Base
Added On - 2/6/2017 12:23:46 PM
We've postured that Resmed has fundamentally changed the US business model in its favour with its Airsense platform. After the release of Resmed's second quarter results for financial year 2017, we explore how it is tracking against this thesis.
Foot Locker: The Next Step
Added On - 2/6/2017 12:06:44 PM
Foot Locker shares have been a very profitable path for investors over the past year.
Looking For Value? Don't Ignore The Large Caps
Added On - 2/3/2017 11:12:54 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 a 40% to 60% annualised return today. Not a bad return on the largest of large caps that money can buy.
We Don't Need Those Rates To Rise
Added On - 2/3/2017 11:10:26 AM
In terms of household debt to disposable income (187 per cent) and household debt to GDP (125 per cent), Australian householders are vying for gold in the debt Olympics.
The Great Unwind
Added On - 2/3/2017 11:07:17 AM
Although not a front-of-mind issue at present, a potential unwind of the Fed's balance sheet could cause volatility in financial markets in the future.
 

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