19 July 2013 |
The sharp fall in the share price of Treasury Wine Estates has certainly hit the headlines. This was the wine business spun out of Foster's and listed on the ASX with a clean balance sheet. It has been "channel stuffing" in the US, which means they sell huge amounts of inventory to the wholesaler often on credit and so it hasn't really been sold and when customers don't buy it they have to write down the inventory.
15 July 2013 |
It is the beginning of the new financial year and analysts are trying to take a medium term perspective on the stock market. One of the more comprehensive snapshots comes from Deutsche Bank, which is noting that economic indices have turned positive after spending in April/May went into negative territory.
15 July 2013 |
The fall in the Australian dollar has taken the shine off investing overseas, but there is still a case that at least some of the super portfolio should be invested internationally, if only for reasons of diversification. The weakness in international stock markets may also represent a buying opportunity -- in investment terms, things are always at their best when they look the worst -- although of course there is always the possibility of further weakness.
03 July 2013 |
The news that Warren Buffett is backing the Australian dollar is pitting the world's most famous investor against most local economists. For example, Andrew Salter, ANZ currency strategist says fair value is between US90¢ and US95¢ but the market always overshoots so you can’t rule out a run into the US80cs. "But I’d be surprised if it lasted more than two or three months."
18 July 2013 |
The constant hand wringing about China's economic growth is consuming local commentary. Treasurer Chris Bowen announced today that the China boom is owner, showing surprising confidence in his economic judgement considering how little time he has spent in the job. Investors trying to draw too many conclusions from this, however, should be cautious. For 20 years, China has confounded Western expectations and it remains on its unique path.
17 July 2013 |
The biggest problem for super fund investors is understanding what causes sudden and unpredictable changes in the assets in which they invest. Simon Bond, for RBS Morgans comments that financial markets are driven by traders. The tail is wagging the dog.