Investor Insights

As fiscal 2019 has drawn to a close, let’s take a look at the year that was. In sporting parlance, it was definitely “a game of two halves. ” Virtually all major indexes declined in the December 2018 half-year, however this proved temporary and the recovery in the June 2019 half-year was quite extraordinary.

In the lead up to the RBA’s first interest rate cut in several years, governor Philip Lowe noted the negative ‘wealth effect’ from falling house prices would be felt most acutely by those retailing motor vehicles and household furnishings.

Over the last few months, eight times as many ASX-listed companies have downgraded as upgraded. That’s an alarming figure, and reveals a serious decline in business conditions. The mission for all investors is to try to avoid companies issuing further downgrades.

Last month, there was probably no one more surprised than Australian Prime Minister, Scott Morrison – or “ScoMo” – to which he is commonly referred. ScoMo had just won a decisive victory in Australia’s general election against an opponent that was the short-odds favourite in the betting markets. Exclusive Content This is exclusive content to subscribers on rogermontgomery. com.

One of the more significant de-rating stories over the past 12 months has been that of fruit and vegetable grower Costa Group (ASX:CGC), which has had to issue two earnings downgrades over this period due to a variety of weaker pricing and agricultural-related issues. Exclusive Content This is exclusive content to subscribers on rogermontgomery. com.

For over a decade the debate around US interest rates has been around when they would finally rise again, rather than if.  Now that sense of inevitability is being shaken hard, or at least pushed out indefinitely once more.

There are plenty of charts doing the rounds showing the rising percentage of companies listing in the US, that are losing money. Uber is perhaps the best recent example, which we wrote about and suggested it might be a great short selling opportunity.

Over the past year, the Australian dollar has fallen against the US dollar. It’s a trend I don’t expect will change any time soon. This has important consequences for many Australian businesses and for investors. Just over a year ago, I published a blog post looking at what had happened during the previous year in terms of currency movements.

The market has viewed the private health insurers as one of the biggest winners from this month’s Federal Election. This is due to the market having factored in the likely impact of Labor’s stated policy of limiting average policy premium increases to 2 per cent on 1 April 2020 and 2021.

Appen (ASX:APX) is one of Australia’s high-flying tech stocks – which collectively go under the WAAAX acronym. Its share price has almost tripled over the past year as many investors ride the Oz tech story. But to my mind, the company’s valuation looks extremely stretched. Exclusive Content This is exclusive content to subscribers on rogermontgomery. com.

  In this week’s video insight Andrew takes a look at the environment for investing in global equities. With the prospects for a resolution of the US/China trade dispute diminishing, has the environment become less favourable?

I thought it would be worth spending some time addressing Alphabet’s most recent quarterly financial result, not only because it’s businesses are massive in scale and value, with operations that are important to billions of people around the world (FYI Alphabet owns Google and YouTube), but also because Alphabet is an important holding in the Montaka long portfolio.