Because the current global financial crisis started with declining US House prices many believe that it will finish with improving US House prices. The primary index used in the US that assesses house price movement is the Case-Shiller Composite Index. As can be seen unfortunately the plummet in prices continued in February and prices fell …
Monthly Archive: April 2009
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Apr 28
Risks of Direct Equity Portfolios
This week my latest education article was published in IFA magazine. Basically it summarises the amount of additional downside risk a direct equities portfolio with a small number of stocks takes on compared to portfolio with a large number of stocks. There is myth that concentrated stock portfolios are more likely to outperform managed funds, …
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Apr 27
Australian Government Debt…not a worry
Australian has and will have very little debt compared to the rest of the world. The liberal government saved for the tough times and now that we’re in the middle or start of an Australian recession the Australian government are well positioned to borrow and spend on a few stimulus packages. The above chart is …
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Apr 26
Risks of Fixed Interest Investments
One of the most misunderstood asset classes is fixed interest. Most investors have a reasonable understanding of the risks associated with equity investing but fixed interest is very different. I have created a draft article for use by advisers and discusses the major risks of fixed interest investment in the context of the global financial …
Apr 21
Economic Outlook
At the time of writing, sharemarkets around the world have experienced one of their strongest six week rallies in history. The push to get the ball rolling was the $1trillion Geitner package that was designed to remove toxic assets from balance sheets. The G20 meeting of world leadersproduced one of the more productive outcomes in …
Apr 16
Putting this bear market in perspective
source: www.dshort.com This is US data only. Compared to the other serious bear markets the recent rally is pretty standard stuff and appears to be no more than the usual short term noise in the market. This bear market has so far performed similarly to the 1929 crash so far but lets hope it doesn’t …
Apr 14
Is the market cheap?
The above chart is a couple of weeks old now but is showing the market PE ratio to be around 11 (so its probably 12 now). As the chart shows this is a PE ratio that was pretty much the average throughout the 70s and early 80s. Now a PE of 11 is an earnings …
Apr 08
Groucho Marx and the 1929 Crash
“Some of the people I know lost millions. I was luckier. All I lost was two hundred and forty thousand dollars… I would have lost more but that was all the money I had.”….Groucho Marx writing in “Groucho & Me” Send article as PDF
Apr 08
Don’t be deceived with low valuations
The lcaol sharemarket continues to show some very low PE Ratios and very high dividend yields which look terribly attractive. As the following chart shows, looks can be very misleading while analysts continue to sharply downgrade forecast earnings. Send article as PDF
Apr 08
Credit Crisis Continues…
Whilst the Reserve Bank drops their cash interest rates the credit spreads (as shown above) on investment grade corporate bonds are doing the opposite. It doesn’t matter whether you are a AA, A, or BBB rated corporate you are paying a record interest rate above the government interest rates. It amazing that these credit spreads …