Is China Winning The Global Technology Race?

In round one of what appears to be a deepening trade war between China and the US, the battle is on artificial intelligence, quantum computing, 5G wireless applications and genomics. President Trump has unveiled 25 per cent tariffs on $50 billion of Chinese imports and has also asked the US Trade Representative to identify an additional $200 billion worth of Chinese goods for tariffs of 10 per cent. 

Read More

One Day Can Be A Long Time In The Market

 This year the Blue Sky Alternative Investments (ASX: BLA) share price has declined 78 per cent from $14.54 to $3.23 and the Company has earlier today accepted the resignation of Managing Director, Robert Shand. Fellow Executive Directors, Elaine Stead and Nicholas Dignam, have stepped down from the Board of Directors and will continue in their executive roles, as Head of Venture Capital and Growth Capital, respectively.

Read More

Phillips Curve – Will We See Higher US Inflation?

The Phillips curve describes the historical inverse relationship between rates of unemployment and corresponding rates of inflation.  The theory states that with economic growth comes more jobs, less unemployment and inflation.  The degree to which this inverse relationship has been affected by globalisation, digital deflation and outsourcing is a moot point and we wonder if, and when, the 17-year low in US unemployment will filter through to a higher sustainable rate of inflation?

Read More

Where There’s Disruption, There Is Innovation

In Andy Macken’s Whitepaper  “Who are the businesses of the future?”, he explained the online technology platforms (OTP) concept, arguing “by implementing this model in software – which results in an effective zero cost of marginal production; and online – which results in a near zero cost of global production: owners of successful online technology platforms often generate enormous economic profits stemming from a number of advantages which are both powerful and sustainable”. See here for the full version.

Read More

Wrapping Up Vita Group

Today’s blog will most likely be our final with respect to Vita Group Limited (ASX: VTG). In a portfolio of 20-30 companies, we will make mistakes – and VTG is, in absolute terms, one of our larger ones. Importantly, despite this loss and others The Montgomery Fund has outperformed over the long term. We also maintain a continued focus on where and why we erred.

Read More

We Don’t Need Those Rates To Rise

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.  Our love affair with property has been greatly assisted by record low interest rates and this reduction is illustrated below with the “Interest paid to disposable income ratio” declining from 13 per cent to just over 8 per cent over the past decade.

Read More

Farewell 2016, Hello 2017

After no gain, excluding dividends, over the 30 months from December 2013 to June 2016, the Australian All Ordinaries Index recorded a 7.7 per cent bounce in the December 2016 half-year.  This was assisted by the record low cash rate (1.5 per cent), the 81 per cent rally over the year in the iron-ore price to US$78.87/ tonne and the 52 per cent rally over the year in the oil price to US$56.82/bbl.  Copper, a strong indicator for Global Industrial Production, was up 17 per cent to US$2.51/lb.

Read More

The Bellwether Resource Service Stock

Monodelphous Group Limited (ASX: MND) is the bellwether company for the Australian resource service sector.  After seeing the MND share price decline 80 per cent from $28.50 to $5.50 in the three years to early-2016, it has more than doubled this year, indicating investors appetite to switch into cyclical stocks as the expectation for resource projects proceeding has increased with the recovery in commodity prices.

Read More