Why Ronaldo Might Be Worthless

Last week Italy’s most successful football club, Juventus, announced a deal for one of the world’s greatest players, Cristiano Ronaldo. The price tag that Ronaldo’s former club Real Madrid pinned to the Portuguese superstar? €100 million. But after a quick look at the economics of soccer it becomes clear that Ronaldo might be worth nothing at all.

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A Brand New World

If you want exposure to the best and biggest brands across all sectors then you need to invest globally. With data from Forbes and imagery courtesy of Visual Capitalist, today’s fun chart below shows the world’s 100 most valuable brands, worth over $2 trillion in aggregate.

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7 Million Reasons To Protect The Downside

We talk a lot about downside protection at Montgomery Global. Intuitively it seems like a very good thing. Who on earth ever wanted their money to take nose-dive? (Answer: nobody). But the idea of reducing downside risk immediately raises some questions, like: what’s the value of protecting the downside? Or, what do I have to give up to insure against the downside? And of course, how do I go about putting downside protection in place?

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St James The Platform Of Platforms

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.

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St James’s Place Is The Platform You Never Noticed

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. They benefit from advantages related to scale, access to data, network effects and M&A value extraction. And in doing so platforms share in the value they create for each of the members of their ecosystem.

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Demand For Planes Will Keep Airbus Flying

In late June of this year Le Bourget Airport in north Paris played host to the 52nd Paris Air Show. The event is held every other year and provides manufacturers – primarily Airbus and Boeing – the opportunity to showcase their aircraft to potential customers and, more importantly, to negotiate deals for new planes. This year over 1,200 orders and commitments for planes worth more than US$100 billion were announced, demonstrating the continued strong demand from airlines.

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Amazon: Rewarding Capital & Labour!

Amazon (NASDAQ: AMZN), 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. Amazon’s share price jumped to a record high US$1,100 and Jeff Bezos, its founder and largest shareholder, became the richest man in the world with a fortune of US$95 billion. But readers may be surprised to find that Amazon-led online shopping is also rewarding the US jobs market.

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Market Still Clouded When It Comes To Oracle

On September 14 Oracle (NYSE: ORCL), the world’s dominant provider of databases and a leader in critical applications for big companies, and a top 10 holding in the Montgomery Global Fund, reported its first quarter 2018 results. The results were strong and we were pleased with a reacceleration in earnings that has emerged after years of transforming the business model to a new cloud computing paradigm. Yet on the day the stock dropped almost 8 per cent. We think the market was just giving back a little of the 37 per cent year-to-date share price gain and still underappreciates Oracle’s long run potential.

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Oracle Is Flying Through Clouds

Founded in California in 1977, Oracle Corporation is the dominant provider of critical database software and a leader in mission critical applications for enterprises all over the world. Oracle is also the 2nd largest holding in the Montgomery Global Fund as at the end of the financial year. The latest annual financial results published by the company at the end of June give an insight into why we think the stock is so attractive.

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Foot Locker: The Next Step

Global sales of activewear are rising. Nike is the world’s largest seller of athletic footwear and apparel in the world. First-order* thinking would dictate that investors buy shares in Nike. However, taking the next step and investing in Foot Locker shares has been a more profitable path for investors over the past year.

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It’s Time To Adjust For A Trump Presidency

On 20 January, Donald Trump will be inaugurated as the 45th President of the United States of America. Trump’s victory – and that of the Republican Party, which will now control the White House, Senate and House of Representatives – is likely to bring a period of great change. The big question for investors is how to adjust portfolios to both take advantage of the new regime and mitigate the risks.

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REA At A Low

REA Group is succeeding despite current market conditions, not because of them. The strength of the Australian housing market and REA’s own robust financial performance suggest the owner of the realestate.com.au property portal is riding boom times. However, the company is currently navigating one of the most challenging periods of the last two decades. There is plenty of room for REA’s earnings and stock price to rise from these lows.

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How Trump’s Victory Has Divided The Market

In the fortnight since Donald Trump won the 2016 US presidential election, the US stock market has appreciated more than 3%. But the strong march upwards by the S&P500 belies a divided performance by the companies and industries that comprise the index. The division between the winners and losers has been stark, and this matters for investors. So, let’s take a look at the best and worst performers.

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Are Parents To Blame For High House Prices?

Frothy house prices across our capital cities are getting plenty of airtime, as are the likely causes. Chinese buyers, cheap and easy mortgages, and self-fulfilling expectations for ever-increasing prices have all been identified as drivers of our hot property market. Now, the finger of blame is also pointing at mums and dads. Recent data show that far more parents are helping their kids enter the property market.

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Sizing Your Positions (Part 2)

In the first part of this series we explored the concept of a valuation range as the first critical input into determining an appropriate position size for a stock. As promised in the previous instalment, today’s blog will address how this input interacts with a second critical variable to form a “roadmap” that guides us to more optimal position sizing decisions. 

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Sizing Your Positions

As managers of the Montaka and Montgomery Global funds, finding great individual investment ideas is only part of the battle. Once we have identified a stock with attractive future returns for the risks being assumed we must then determine an appropriate position size. Today’s blog is the first in a three-part series that will help you size your positions.

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Amazon: Prime Earnings

Last week Amazon reported financial results for its second fiscal quarter. The numbers were amazing. And beneath the surface we suspect the Prime membership program had a big part to play. On Friday Amazon reported revenues of $30.4 billion for the quarter ending 30 June, representing a 31 per cent increase over the same period last year. Earnings for the company almost tripled to $1.3 billion.

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