Investor Insights

For over a decade the debate around US interest rates has been around when they would finally rise again, rather than if.  Now that sense of inevitability is being shaken hard, or at least pushed out indefinitely once more.

There are plenty of charts doing the rounds showing the rising percentage of companies listing in the US, that are losing money. Uber is perhaps the best recent example, which we wrote about and suggested it might be a great short selling opportunity.

Over the past year, the Australian dollar has fallen against the US dollar. It’s a trend I don’t expect will change any time soon. This has important consequences for many Australian businesses and for investors. Just over a year ago, I published a blog post looking at what had happened during the previous year in terms of currency movements.

The market has viewed the private health insurers as one of the biggest winners from this month’s Federal Election. This is due to the market having factored in the likely impact of Labor’s stated policy of limiting average policy premium increases to 2 per cent on 1 April 2020 and 2021.

Appen (ASX:APX) is one of Australia’s high-flying tech stocks – which collectively go under the WAAAX acronym. Its share price has almost tripled over the past year as many investors ride the Oz tech story. But to my mind, the company’s valuation looks extremely stretched. Exclusive Content This is exclusive content to subscribers on rogermontgomery. com.

  In this week’s video insight Andrew takes a look at the environment for investing in global equities. With the prospects for a resolution of the US/China trade dispute diminishing, has the environment become less favourable?

I thought it would be worth spending some time addressing Alphabet’s most recent quarterly financial result, not only because it’s businesses are massive in scale and value, with operations that are important to billions of people around the world (FYI Alphabet owns Google and YouTube), but also because Alphabet is an important holding in the Montaka long portfolio.

Last week Alibaba, the world’s largest retailer and e-commerce company, reported financial results for the final quarter of its fiscal year 2019. Alibaba’s Chinese online retail platform continued to grow strongly and drove astounding performance.

Do Australia’s rocketing tech stocks – particularly the so-called WAAAX stocks Wisetech, Afterpay, Altium, Appen and Xero – deserve their lofty premiums? The market certainly thinks so. But I’m not so sure. I have previously alluded to the dangers of investing in the pointy end of the US technology boom and specifically warned about Uber.

In the world of active equity management, investment managers – ourselves included – seek to “outperform” the broader equity market index. This outperformance is typically referred to as “alpha” in the industry jargon. Of course, alpha can be both positive – when a manager outperforms; and negative – when a manager underperforms.

Australia’s four major banks have now reported their interim results. Common to all of them were three key themes, which are presenting both challenges and opportunities.

The Reserve Bank of Australia recently opted to leave interest rates on hold. But with key parts of the economy in decline, it may be just a matter of time before it has to cut again. The question is: how effective will a rate cut be?