Investor Insights

Many commentators point to the six months to June 2022 as being one of the worst June half-year periods for the performance of both the share market and the bond market for several decades. As many economies saw their inflation rate hit a 40-year high, there was an aggressive sell-off in bond markets around the world.

  In this week’s video insight David identifies why he is less pessimistic about rising official cash rates than many commentators, and with the damage done to share prices since late-2021 why we might soon be provided with some good opportunities to buy high quality businesses at very reasonable prices.

This week, RBA Governor Philip Lowe spoke about the department’s monetary policy intervention to tackle inflation in the evolving economic environment. Over the last six months, similar factors have continued to put pressure on food and energy prices – namely the war in Ukraine, foods on the East coast, and Covid lockdowns in China.

With many market watchers expecting the Reserve Bank of Australia (RBA) to keep raising interest rates, high growth companies with no current earnings, but with potential for strong growth, have been heavily sold off. But, due to the economic impact, I’m not so sure the RBA will raise interest rates by as much as predicted.

Warren Buffett once observed that “In stocks, it’s the only place where, when things go on sale, people get unhappy. ” Which is ironic, because bear markets give long-term investors a wonderful opportunity to make market-beating returns. And the lower the market falls, the more excited we should be about buying shares in quality businesses at knock-down prices.

Last week we looked under the hood on how the Aura High Yield SME Fund provides financing to the Australian SME market through fintech enabled lending platforms. In this article we discuss the mechanics of investing as a wholesale investor and answer some of the operational questions we receive from interested investors.

This week the NAB released the May monthly business survey, reporting an easing in confidence but a strong outlook for conditions. Despite fears, forward indicators suggest that businesses still maintain a relatively positive outlook for the Australian economy.

If you had to pick one topic which has overwhelmed investors in 2022, it is inflation. Inflation is where all roads in 2022 have led – it has forced a shift in central bank policy, impacted both wealth and standards of living and dominated headlines in both financial markets and mainstream media alike.

The Australian Prudential Regulation Authority (APRA) and the Reserve Bank of Australia (RBA) released lending and deposit statistics for April last week. The data shows a continuation of the acceleration in loan book growth, which is now running at its highest level since 2008. Business lending growth has continued to accelerate while mortgage lending growth appears to have stabilised.

This week the Australian Bureau of Statistics reported a second consecutive quarter of GDP growth. Australian GDP rose by 0.8% in the March quarter and was up 3.3% through the year, a more subdued increase following the rise in the last December quarter.

With the share prices of tech stocks having cratered in recent months, there are perhaps few more opportune times than now to revisit the important difference between Price and Value. It may surprise investors that every business has a real worth or a true value that may bear no resemblance to the currently traded price.

This week we saw a change in government, the release of household spending data and Australian business conditions and sentiment data. During the lockdowns of both 2020 and 2021 we saw a distinct uptick in the household savings rate.