In 2016 an extra week was inserted into the calendar of the Australian Football League (the AFL).  No games are played in that week, which sits between the end of the regular season and the beginning of the finals series (the play-offs).  Football fans were baffled and annoyed by the change.   But it does make sense in product strategy terms.  The extra week is part of the creation of more than one ‘version’ of the AFL’s product.  The full product – the 23 week regular season plus the 4 weeks of finals – for the domestic audience, and a shorter version of just 4 weeks duration for the global audience.

Does the recent acceleration of growth in the global economy mean that we are finally turning the page on the GFC, which began in 2007?  That depends on which narrative of the GFC you subscribe to – the Rogoff and Rinehart ‘bathtub’ explanation or Larry Summers’ ‘secular stagnation’ explanation.  If Rogoff and Rinehart are right then the GFC is a banking crisis which after 10 years of slow growth is coming to a predictable end.  If Summers and Co are right then the GFC is an expression of something much deeper, longer term and problematic in the global economy.

Data is accumulating in firms at an exponentially faster rate than firms are learning to analyze it.  That mismatch, between the growth of data and firms' ability to make decisions based on it, is the biggest disjunction in global commerce.

Avoiding complex investments is a good guiding principal for investors.  Bank hybrid notes are an exception to that rule.  Yes, they are complex relative to plain vanilla shares and bonds.  But their reward-to-risk ratio, and their defensive qualities, are so attractive that investors should consider bank hybrids despite their complexity. 

Inflation bulls are currently in the ascendency.  The US Fed raised its overnight rate again in June and is discussing the unwinding of quantitative easing (QE).  The European Central Bank Governor Mario Draghi now says that the "deflationary forces have been replaced by reflationary forces".   It is good to talk up inflation, but let's not get too excited.  A look at the long term interest rates picture shows that deflationary forces were decades in the making.  Have those forces really now reversed?  Or, are we simply in a hiatus before the fight against deflation resumes in earnest?

About 450,000 affluent Australian families hold their investments in some combination of superannuation, family trusts and direct ownership of negatively geared property.  But over the last year, changes in tax rules and changes in property market conditions have shifted the relative benefits of these arrangements.  Family trusts have been made comparitively more attractive. Investors should consider whether their 'structuring' and tax planning is still optimal.

The biggest global markets for transferring risk (by far) are the interest rate (IR) risk markets.  A key relationship in these markets has recently broken down.  It is the relationship between the treasury yield curve and the swap rate curve.  It is another example of how broken the global financial system is, and it seems to have actually been caused, in part, by over-zealous banking regulators.

During the commodity price boom from 2004-2011 BHP Billiton's board raised the firm's dividends to unsustainable levels and now in the commodity bust it has been forced to cut dividends by 75%.  Well, so what?  A firm that experienced an unanticipated surge in cash flows paid out a large part of that cash to shareholders as dividends - terrific.  That is a lot better than wasting the cash on bad projects or value destroying acquisitions.  Strident critics of BHP's dividend management need to explain exactly what the BHP board should have done with its surplus cash instead of raising dividends.

There is something odd about Australia's airline duopoly at the moment.  Over the last two years Qantas shares have risen in price by 225%, but Virgin Australia's shares are up a mere 25%. It is not so unusual for two firms in the same industry to have highly divergent fortunes, but it is unusual in a cosy duopoly that is effectively closed to new entrants. If you think that some of Qantas's share price out-performance relative to Virgin will be reversed – that the paths of their share prices will converge – then how would you act on that view?

Many economists believe that an extended period of inflation is ultimately the only way out of the low growth aftermath of the GFC. Moreover, the measures needed to stimulate inflation, such as: quantitative easing, negative interest rates, higher inflation targets and commitments to ‘do whatever it takes’, are blunt instruments. Therefore, a degree of overshooting – inflation that is too high – should be expected. Deflation is the immediate danger but investors need to plan today for inflation in the medium to long term.

Robo-financial advice is an idea that is as old as the web itself. Vanguard had plans for a robo-advice product in 1999. Now there is a new surge of energy in this space with a large group of fintech startups going after the opportunity. Imagine that you were building a robo-advice product, then what would your business model look like? What service would you provide? What market segment would you go after? What would your revenue model be?

A combination of bank shares plus put options to protect against a fall in the value of those shares looks attractive at the moment. Grossed-up dividend yields are very high and the price of options on banks shares are relatively low. That is a happy combination, especially for SMSF investors.

Quantitative easing is often described as ‘printing money’. But that statement is incorrect and portrays a misunderstanding of what QE really is.

How often do we still hear statements like “Platforms that connect household borrowers to household lenders will soon push banks aside”. The only reason capital still flows through banks from savers to lenders in 2015 is because the banks have a historic monopoly.”

Now is a good time to remember the lessons of history about growth shares versus value shares.

‘Haircut’ is a term that has a precise meaning in finance. But many journalists and commentators use the term incorrectly, which is unfortunate because ‘haircuts’ have played a major role in the GFC. Knowing what haircuts really are is crucial to understanding the liquidity crises of the GFC.

Sporting tournaments, such as Wimbledon, The Masters and The Melbourne Cup, receive great fanfare, but much more important ‘tournaments’ are playing out continuously in the economy.

Inflation fell rapidly in every major economy during 2014 - see the graph below. In 2015 global inflation has temporarily stabilised at very low levels. What will happen next is the biggest question facing global investors

Bank hybrid notes have received a lot of unfavourable press in the last year. I think many commentators simply don’t understand them. I like them a lot and think their combination of high yields and good capital protection should give them a place in most investor’s portfolios as a solid defensive asset.

The Greek debt crisis is in a brief hiatus that can only last for weeks. Then the impasse between the newly elected Government of Greece and a coalition of countries led by Germany will have to be resolved. An important issue here is the rapidly changing way in which the German public perceives the role of their country in Europe.