In December of last year, Livewire “surveyed more than 4,000 investors and learned that 62% of them intend to invest in decarbonisation in 2022. That was double the level of interest of any other megatrend.” Its latest Megatrends Series, Decarbonisation 2022, “unearths the funds, ETFs, and experts leading the charge to Net-Zero.” One contributor asserts: “climate represents a … [Read more...] about Decarbonisation: A doubter’s guide for conservative investors
America’s permanent recession: Is it coming to Australia?
It’s a never-ending ritual: many people hype current (and try to guess upcoming) national income statistics such as Gross Domestic Product – or heed those who do. The bigger is GDP and the more rapidly it rises, mainstream economists and policymakers strongly imply (and investors and journalists obediently accept), the healthier is the economy and the better are investors’ … [Read more...] about America’s permanent recession: Is it coming to Australia?
The janitor who amassed a fortune: How character underpins investment success
All investors want – or, at least, say that they want – to become successful. And virtually all people claim that they desire financial independence and wish to help others. How to achieve these worthy goals? In this article, which reviews the life and legacy of Ronald Read, a janitor, maintenance man and service station attendant from Vermont, I reiterate a critical point: … [Read more...] about The janitor who amassed a fortune: How character underpins investment success
Why you’re probably overconfident – and what you can do about it
Did January's market corrections distress you? Do you worry that wobbles – or worse – will return? If so, perhaps that’s because you were and remain overconfident. You’d hardly be alone: in research it conducted last year, Morningstar found that two-thirds of Americans, a similar proportion of its financial advisers and 80% of its Generation Z show signs of excessive … [Read more...] about Why you’re probably overconfident – and what you can do about it
Will climate change soon make Australia “uninsurable”?
To many investors, it’s indisputable: a warming climate has caused the number and severity of natural disasters to increase. Moreover, this supposedly rising tide of devastation threatens Australians and their insurers. These claims are being repeated increasingly frequently and fervently, yet a glaring weakness accompanies them: they almost invariably lack credible – indeed, … [Read more...] about Will climate change soon make Australia “uninsurable”?
Three risks you can discount – and one you can’t
This article summarises Leithner & Co.’s assessment of three key commonly-cited macro-economic risks: (1) increasing inflation, (2) stagnant or declining economic growth and (3) rising interest rates. By analysing a long series of data compiled mostly by Robert Shiller, I show that: In isolation, waning growth (as measured by Gross Domestic Product) as well as waxing … [Read more...] about Three risks you can discount – and one you can’t
The myth of the small cap premium
“There are lots of reasons why investors get excited about small stocks, particularly in Australia,” a global asset manager stated in a report published in 2017. These reasons include “the higher growth rates that smaller companies can achieve” and “the myriad of successful individual stock stories that abound.” Many people dream about – and some repeatedly try – hitching … [Read more...] about The myth of the small cap premium
Our approach to selling – and why we sold BHP
In 2015, Leithner and Company Ltd purchased shares of BHP. In June of this year, we sold them. Over these years, this investment generated an unexpected but gratifying compound rate of total return of almost 30% per year. Using it as an example, this article summarises our approach to selling investments. As a “buy-and-hold” investor, we seldom sell. But long-term investors are … [Read more...] about Our approach to selling – and why we sold BHP
Does CBA deserve its premium?
Why, particularly since the GFC, have Commonwealth Bank of Australia’s returns outpaced ANZ’s, NAB’s and Westpac’s? For decades, macro-economic conditions have affected each of the Big Four in much the same way; and since 2017-2018, in the wake of the findings of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, the reputation … [Read more...] about Does CBA deserve its premium?
Keynes as investor-speculator
John Maynard Keynes (the First Baron Keynes of Tilton, 1883-1946) is usually remembered as the author of The General Theory of Employment, Interest and Money (1936) and father of “Keynesian economics.” He was probably the most famous and influential economist of the past century, and (based upon the damage they wreaked in the 1960s-1970s and since the GFC) the policies that he … [Read more...] about Keynes as investor-speculator