According to Ashley Owen (“Recessions Are Usually Good for Sharemarkets,” Firstlinks, 12 October), “history shows that economic contractions have been mostly good for share prices.” Specifically, “the Australian share market has actually increased during the majority of economic recessions in Australia. The same is true for the U.S. share market during U.S. recessions.” In … [Read more...] about Recessions usually crush shares – but investors can always reduce their ravages
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How the 60/40 portfolio outperforms
In Critics of the 60/40 portfolio have their blinkers on (27 September), David Thornton notes that “the age-old 60/40 portfolio,” comprised of 60% stocks and 40% bonds, “has copped a growing chorus of criticism lately.” On 15 October 2021, for example, Goldman Sachs asked: “is the 60/40 dead?” Barron’s was unequivocal. On 4 November, it titled its lead article “The 60/40 … [Read more...] about How the 60/40 portfolio outperforms
Why ESG is fatally flawed
“The value of assets managed with a responsible investing framework has risen to $A1.54 trillion, accounting for 43% of the total (Australian) market,” The Australian reported on 12 September. In a survey it released that day, the Responsible Investment Association Australasia stated that $2.06 trillion of assets under management had been “self-declared as practicing … [Read more...] about Why ESG is fatally flawed
Why Jerome Powell’s speech shouldn’t have surprised you
Jerome Powell chairs the Board of Governors of the U.S. Federal Reserve. His speech at the Fed’s Jackson Hole Symposium disappointed and even shocked many people. It’s been widely cited as the cause of plunges of between 3% and 4% in American markets on that day, as well as falls of almost 2% in Australia on 29 August. Further falls occurred in the U.S. on the 29th and again on … [Read more...] about Why Jerome Powell’s speech shouldn’t have surprised you
Tech Stocks Outperform: Truth or Myth?
Do technology stocks generate better returns than non-techs? The conventional wisdom hints that they do. Business Insider (22 July 2022) encapsulates it: tech stocks “offer some of the best growth potential, but – like most high-reward investments – come with high risks too.” Mainstream financial theory underpins this inference. “A positive correlation,” says Investopedia, … [Read more...] about Tech Stocks Outperform: Truth or Myth?
Why inflation is and will remain high
Everybody knows that consumer prices in Australia, Britain, the U.S. and other countries have risen rapidly over the past year, and most investors know that they’re presently increasing at rates unseen in decades. But seldom does anybody ask: what is inflation? What, ultimately, causes it? And because they don’t ask these questions, the crucial one escapes them: have the … [Read more...] about Why inflation is and will remain high
Shun stock-pickers – choose investors
Ally Selby (How the #1 picks went from hero to zero in just 6 months, 12 July) reckoned that the January-March quarter was “tough, tiresome and damn it, sometimes terrifying.” April-June, she added, was even worse: “Only three out of Australia’s (18) finest stockpickers’ highest conviction calls are in the black, while the rest have slid (some more violently than others) into … [Read more...] about Shun stock-pickers – choose investors
How experts’ earnings forecasts harm investors
It’s “an article of faith among Wall Street research departments,” wrote David Dreman in Contrarian Investment Strategy (1979): “nothing is as important in the practice of security analysis as estimating the earnings outlook ... Forecasting is the heart of most security analysis as it is practiced today.” More than 40 years later, not just in Wall Street but around the world … [Read more...] about How experts’ earnings forecasts harm investors
Leithner & Co Preliminary Half-Year Report
Dear Leithner List Members, Linked below is the preliminary Half-Year Report, distributed to shareholders last week, summarising Leithner & Co's operations and results for the six months to 30 June. Not just despite the market’s turmoil and volatility, but also because of it, our conservatism continues to produce strong and stable outcomes for our investors. If you’re … [Read more...] about Leithner & Co Preliminary Half-Year Report
What ASX stocks would Warren Buffett buy in 2022?
t’s a common and constantly asked question: “what will Warren Buffett do next?” In the U.S., its answer has practical importance. If you’re a hedge fund or other asset manager and can read his mind, then buying what he subsequently acquires can generate considerable short-term profits. Of course, nobody can unerringly anticipate anybody’s actions. But if you’re a buy-and-hold … [Read more...] about What ASX stocks would Warren Buffett buy in 2022?