Finance fallacies: Share buy-backs
When a corporation buys back its own shares, then what happens to the share price? A classic finance fallacy is as follows. The share price
July 16, 2021
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Microsoft versus Apple
Microsoft’s shares went through USD 2 trillion in total value on 22 June, making it only the third company, after Apple and Saudi oil firm
June 29, 2021
Inflation winners and losers
Which asset classes are generally most resilient to rising inflation? Is it shares? property? bonds? infrastructure? If we put aside (for now) the possible unwinding of QE,
June 29, 2021
Global economy: Melt up and take my money
Expectations for the global economy have turned very sour in the last nine months and especially these past two months. Growth forecasts are down and
July 16, 2019
Active vs Passive Investing Part 1: A role for both
Stock market investors have to decide whether they will be ‘active’ or ‘passive’ investors. The fundamental ideas that frame this choice are poorly understood, even
February 14, 2019
Economics
Finance fallacies: Share buy-backs
When a corporation buys back its own shares, then what happens to the share price? A classic finance fallacy is as follows. The share price
July 16, 2021
Inflation winners and losers
Which asset classes are generally most resilient to rising inflation? Is it shares? property? bonds? infrastructure? If we put aside (for now) the possible unwinding of QE,
June 29, 2021
Global economy: Melt up and take my money
Expectations for the global economy have turned very sour in the last nine months and especially these past two months. Growth forecasts are down and
July 16, 2019
Global tax rate winners and losers
Should we cut Australia’s corporate tax rate to 15% and eliminate dividend imputation? That question arises again now that the G7 countries have agreed, in principal,
June 16, 2019
Correct Terms: Institutions
‘Institutions’ is a word that is used so freely that many people don’t even realise they don’t know its true meaning. That is unfortunate because an
March 15, 2019
Personal Investing: Money out
Most investors don’t have a clue how much they pay across all the different types of investment fees they are charged. There are fees for
August 21, 2018
Global Economy: Bathtubs versus Stagnation
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?
March 31, 2018
Global economy: Janet and Mario go too early
Inflation bulls are currently in the ascendency. The US Fed raised its overnight rate again in June and is discussing the unwinding of quantitatvie easing
July 28, 2017
The swap curve gets weird
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
February 27, 2016
Inflation is the only way out: Part I
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
January 15, 2016
On the money
Quantitative easing is often described as ‘printing money’. But that statement is incorrect and portrays a misunderstanding of what QE really is. How much US
August 11, 2015
Inflation or deflation?
Inflation fell rapidly in every major economy during 2014 – see the graph below. In 2015 global inflation has temporarily stabilised at very low levels.
July 15, 2015
Gamma’d by the Swiss central bank (SNB)
The Swiss central bank (SNB) suddenly abandoned its peg of the SFr against the Euro on 15 January after having promised only 3 days before
February 15, 2015
The yield curve inverts
Are interest rates on fixed rate loans going to rise or fall over the next year? Should investors fix the rate on their investment loans
February 1, 2015
Disrupting the oil market
What is the biggest market to be ‘disrupted’ in the last 10 years by new technology. Is it retail markets like books and music? Is
January 15, 2015
The volatile Australian dollar ($A)
Currency issues are very salient in the Australian finance system, including wealth management. Australia is, after all, a small open, resource based economy with a
January 1, 2015
Strategy
Management of everything
I am a big fan of Jeff Bezos, the founder and CEO of Amazon. Reading his views on
February 15, 2015
History moves on a frame
The Greek debt crisis is in a brief hiatus that can only last for weeks. Then the impasse
March 12, 2015
Eyes on the prize
Sporting tournaments, such as Wimbledon, The Masters and The Melbourne Cup, receive great fanfare, but much more important
July 15, 2015
Robo-advice
Robo-financial advice is an idea that is as old as the web itself. Vanguard had plans for a robo-advice
January 15, 2016
Going defensive: Option strategies
A combination of bank shares plus put options to protect against a fall in the value of those
January 15, 2016
Strategy: Open, out-sourced, competition
Data is accumulating in firms at an exponentially faster rate than firms are learning to analyze it. That
August 28, 2017
Strategy: The AFL’s version of events
In 2016 an extra week was inserted into the calendar of the Australian Football League (the AFL). No
March 31, 2018
Strategy: The Biggest Bet in History
The biggest ‘bet’ in history is a bet between China and the US that began in 1972 and
August 31, 2018
Negotiation: Getting to Lose-Lose
The Brexit negotiations between the UK and the EU are such a terrific case study in the principles
January 13, 2019
Strategy: Property cascades
Breaking ground for new apartment towers continues apace in Sydney, and has actually accelerated in Melbourne. Does that
February 14, 2019
Microsoft versus Apple
Microsoft’s shares went through USD 2 trillion in total value on 22 June, making it only the third
June 29, 2021
Investment
Inflation winners and losers
Which asset classes are generally most resilient to rising inflation? Is it shares? property? bonds? infrastructure? If we put aside (for now) the possible unwinding of QE,
June 29, 2021
Get your fixed
Fixed mortgage rates will rise when the RBA’s Term Funding Facility (TFF) ends in a few weeks time, on 25 June. The introduction of the TFF
June 13, 2021
Global economy: Melt up and take my money
Expectations for the global economy have turned very sour in the last nine months and especially these past two months. Growth forecasts are down and
July 16, 2019
Global tax rate winners and losers
Should we cut Australia’s corporate tax rate to 15% and eliminate dividend imputation? That question arises again now that the G7 countries have agreed, in principal,
June 16, 2019
Personal investing: Cats and CoCos
Bank hybrid notes are great defensive investments with yields that more than compensate for their risk. NAB’s new $1.65 billion hybrid issue is an example.
March 15, 2019
Active vs Passive Investing Part 1: A role for both
Stock market investors have to decide whether they will be ‘active’ or ‘passive’ investors. The fundamental ideas that frame this choice are poorly understood, even
February 14, 2019
Personal Investing: Important but not Urgent
A key issue for personal investors is that many investment tasks are ‘important but not urgent’, so they are put off indefinitely even though the
January 13, 2019
Personal Investing: Money out
Most investors don’t have a clue how much they pay across all the different types of investment fees they are charged. There are fees for
August 21, 2018
Personal investing: The extra return to hybrid notes
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
August 28, 2017
Personal investing: Buckets for money
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
July 28, 2017
Global economy: Janet and Mario go too early
Inflation bulls are currently in the ascendency. The US Fed raised its overnight rate again in June and is discussing the unwinding of quantitatvie easing
July 28, 2017
Show us the money
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
February 27, 2016
A convergence trade: Qantas and Virgin
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
February 27, 2016
Going defensive: Option strategies
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
January 15, 2016
Robo-advice
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
January 15, 2016
Inflation is the only way out: Part I
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
January 15, 2016
Digital disruption: Peer-to-peer
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
August 11, 2015
Irrational exuberance
Now is a good time to remember the lessons of history about growth shares versus value shares. Imagine that your rich aunt has passed away
August 11, 2015
Bank hybrid notes versus bank shares
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
March 12, 2015
Housing bubbles
There is growing concern that a bubble is developing in the residential property market in Australia. Prices have certainly zoomed up in Melbourne, and especially
March 12, 2015
The open IPO channel
A lot of new firms listed on the Australian Securities Exchange (ASX) for the first time in 2014. Over $16 billion of shares were sold
January 15, 2015
Value and growth
It is often stated that things are never as bad as they seem or as good as they seem. I was reminded of that maxim
January 1, 2015
The volatile Australian dollar ($A)
Currency issues are very salient in the Australian finance system, including wealth management. Australia is, after all, a small open, resource based economy with a
January 1, 2015
Finance Market
Global Economy: Bathtubs versus Stagnation
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?
March 31, 2018
Personal investing: The extra return to hybrid notes
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
August 28, 2017
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