To Beer Or Not To Beer

Part of helping manage a portfolio of global stocks involves staying on top of global trends, and determining whether there are ways to profit from any themes that emerge (either on the long or short side). One interesting theme the global team has observed is how Americans are increasingly drinking alcoholic beverages other than beer.

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The Shifting Sands Of Banking

Banking, an industry that has changed very little over hundreds of years, is now being gripped by a tsunami of technological change. At a recent industry conference, banking executives laid out their plans for how to deal with this shifting landscape, as well as provided insights into the current state of play for banks in the U.S. and globally.

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Punch Card Investing

Investing successfully is not easy. Among other qualities, it requires incredible discipline and patience. After all, the greatest rewards come when you wait for the right opportunities with huge upside, and then swing big. It’s the approach preached by Warren Buffett and favoured by us at Montgomery Global.

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51job: A Job Well Done

51job (Nasdaq: JOBS), the Chinese online job listing platform, is a company that has been in the global fund portfolios for some time now. The company is executing well on its strategy to build out the premier online jobs platform in China, with recent price increases being the highlight of the company’s recently reported Q1 earnings.

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Why Not Everyone Is A Value Investor

Value investing is a cornerstone of the Montgomery Global approach to allocating capital. 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?

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Why Bitcoin Is Uninvestable

“What do you think about investing in Bitcoin?” is a question I am being asked with increasing frequency, as the cryptocurrency mania reaches a fever pitch. Is bitcoin investable? I would argue that the answer to that question is a resounding “no”. A Bitcoin investment is an oxymoron, with a purchase of bitcoin falling into the domain of speculation.

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The New Phase Of Big Data

“The world’s most valuable resource is no longer oil, but data”, read the cover story of the Economist earlier this year. After recently hearing from a number of companies at a technology conference in New York, there was a strong recurring theme that seemed to fit that sentiment: data is becoming increasingly important and firms are rushing to find ways to best utilise this data. 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.

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Why You Need To Limit Your Downside Risk

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. It’s worth asking what could make one chapter so important and worthy of this collective discussion?

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Don’t Buy Trading Sardines

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.

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Never Underestimate The Power Of Incentives

For long term outperformance in investing it is necessary to have a rigorousrigorous, logical process that is followed with discipline. This is not easy. It is also not enough to ensure outperformance in the long run. In addition to a good process, investors must also give due regard to the role of human psychology in markets and businesses. One particularly overlooked aspect of human psychology is the impact incentives can have on the decision making of a firm’s management team.

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Why We Prefer To Take A Long-Term View

Benjamin Graham, the mentor to Warren Buffett, once said: “In the short run, the market is a voting machine but in the long run, it is a weighing machine”. In other words, in the short run, there is a lot of market noise and investor emotion that can drive stock prices. But, over time, stock prices typically reflect the fundamentals of the underlying business.

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Tencent – China’s Online Juggernaut

Tencent is without a doubt a high growth business – in the last five years its revenue growth has been at least 30 percent in any given year, and in some years far higher. What is phenomenal is that Tencent is today an enormous business, with an almost US$400 billion market cap. Yet its revenue growth is actually accelerating. This has been much to the surprise of the analysts covering the company, with some scrambling to upgrade their target prices after the recent share price rally. We continue to believe that Tencent is one of the most powerful online technology platforms in existence.

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Is Active Investing Dead? Part II

Australia’s funds management industry is the sixth largest in the world*. Which means investors have plenty of options for where to place their funds. The challenge is to find an investment manager with a superior stock selection process who can outperform over time. To help you, I’ve put together a framework you can use to make a more informed decision.

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Obamacare Is One Step Closer To Repeal

The repeal and replacement of Obamacare was one of Donald Trump’s key election promises. Now that the Republicans have passed a revised healthcare bill, that promise is one step closer to reality. This will have far-reaching implications for the ability of the government to fund tax reform, as well as for lower-income Americans who are likely to lose health insurance.

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U.S. Retail Is Over-Stored

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. Having the convenience to peruse vast selections of items at one’s fingertips is now an expectation, and shoppers now demand that these items are delivered promptly and often free of charge.

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What The Repeal Of Obamacare Will Mean

When it comes to political footballs, U.S. healthcare is hard to beat. Just seven years ago, in March 2010, the Affordable Care Act – nicknamed ‘Obamacare’ – became law. This significant overhaul of the U.S. healthcare system was, of course, strongly criticised by the Republican Party and its backers. Now, the Republicans are about to dismantle it.

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The Spectacular Growth Of eSports

Lee ‘Faker’ Sang-hyeok is considered by many to be the best League of Legends player of all time. Why is this important? Because the eSports market, where ‘Faker’ is a major star, is growing – fast. And it’s boosting the value of eSports businesses, like Tencent (HKEX: 700 HK) and Take-Two Interactive (Nasdaq: TTWO) – whose shares we are pleased to hold in the Montgomery global funds.

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Is Social Media Affecting Your Performance?

Social media platforms such as Facebook and Instagram have done an incredible job at capturing our attention, and have in turn created exceptional businesses fuelled by growing advertising revenue streams. But there is the risk that these apps create distractions that could adversely affect your efforts towards achieving strong investment performance. Why?  Because investing is a task that requires complete, undisturbed concentration. And the distractions posed by social media can act as a countervailing force to our efforts to uncover investing insights.

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