Opinion

“Am I worried about asset prices rising too quickly? At the moment, I don’t see anything that’s unsustainable”. “I recognise that low interest rates are one of the factors contributing to higher housing prices and that high and rising housing prices raise concerns for many people.” “There are various tools, other than higher interest rates,…

As the COVID recovery gathers momentum, it is interesting to consider which sectors and companies are benefiting from the short-term boost of temporary stimulus measures and which present long-term opportunities as global growth recovers. We have identified three themes that frame our thinking about the long-term prospects of Australian small cap stocks: adding to high…

Challenger Financial Group (ASX: CGF) and its suite of asset management businesses have started 2021 off the same way 2020 finished. As part of their half yearly accounts, the company flagged a partnership with $500 billion Japanese asset manager Nomura Asset Management as both seek global diversification. According to the deal, Nomura and Fidante will work…

While nearly all the fussing on equity valuation and bubbles is centred on the US, Europe, Japan and the emerging markets (EMs) have provided decent returns year-to-date, after a prolonged period of relative underperformance, but stumbled in the face of rising Treasury rates. These regions are largely absent from the hype that is currently associated…

Let’s get real The financial chatter box is overflowing on bond movements and the potential impact on valuation of risk assets. Inevitably the long-duration equities are front of mind. Most are focused on the FAGAM (Facebook, Amazon, Google, Apple, Microsoft) or other similar stocks where the valuation is considered to reflect long-term thematic growth. On…

An illustration of why an active long-short approach to the global listed infrastructure (GLI) sector makes sense. ESG funds have gained in popularity in 2020, sometimes with a material impact on underlying holdings. This has impacted GLI stocks recently, with the iShares Clean Energy ETF buying 1%-6% of companies’ floats in a matter of weeks, leading to…

Investors should increase allocations to active management strategies against an increasingly uncertain global backdrop, according to a new Willis Towers Watson (WTW) report. It is a “cyclically fertile ground for alpha.” The WTW analysis, ‘Outlook 2021’, says “skilled active management offers growing value for money, as a number of factors converge to add risk to passive plays.”…

Groups of amateur investors that gather on social media forums such as Reddit have organized to buy stocks and options in companies with high short interest like GameStop, AMC Entertainment and Blackberry, among others. The buying activity drove the stocks up sharply over the last several weeks and resulted in a massive short squeeze with…

It’s not hard to find commentary about market “bubbles” on a daily basis, where you can take your pick on traditional bond prices, property, growth equities and now extend the topic to bitcoin, gold or many other financial markets. At best it’s a welcome relief from COVID-19, but ultimately it resembles the virus chatter in the…

The persistent era of disruptive services has its counterpart in companies considered ripe for extinction. History, however, suggests one should not be quite so fast in judging. The advent of affordable motor vehicles (and of course, other factors such as urbanisation) resulted in the waning of mail-order catalogues and the rise in the department stores,…

Now that the Reserve Bank of Australia (RBA) has said that it effectively expects to keep rates on hold until at least 2024, the flood of capital into private markets, but particularly credit, is likely to turn into a tsunami. Advisers are being forced either to move along the risk curve in the search of…

The attack on short sold stocks in the past week has caused a frenzy of comments on the participation of so-called retail investors. Where this will end up is anyone’s guess, but what is increasingly clear is that equity markets are no longer at the behest of traditional investors. Nasdaq has weighed into the argument…