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Articles
Changes in Long Term Growth Rates
Impact on Financial Planning Decision-making
Hidden in the second
intergenerational report from the Australian government are some warnings for
financial planners about likely investment returns. These warnings also
contain some signals about the long-term attractiveness of resource sector
investing.
Market Booms
What causes them?
Macroeconomic conditions are usually critical to the timing and
direction of a stock market boom, according to recently published
research which implies that the Australian market is past its peak. The
empirical evidence also suggests an impact from strong linkages across
markets.
Do Futures Prices = the Future Price?
Some research evidence
There is a good deal of evidence that current futures prices are not a
good guide
to spot prices in the future.
Commodity Price Cycles
How long do they last?
Increased commodity price volatility makes
resource sector investors nervous. As usual, commodity market turning
points are not for the faint-hearted. But there is a valuation rainbow
on the horizon for equity investors.
Commodity
Price Cycles
What is the connection with equities?
Mining sector equity prices are volatile, but the connection with commodity
prices may not be as strong as many often assume.
Assuming Investment Success
The mistake of relying on market behaviour
Investors need to be clear about the behaviour they are relying on for
investment success. Every product embodies a set of assumptions.
Meeting the Need
for New Mines
Impact on Investment Decisions-making
One of the biggest challenges now looming for the
resources industry is to find new mines to cope with the continuing growth in
consumption.
Mining
Dealmakers
Why can't they just dig, make and sell?
Deal making among junior resources companies puts at risk potential returns for
ordinary shareholders. A clearer focus on what builds value, including a
strategy to pay dividends, could add more to prospective returns.
Global
Growth
What it means for raw materials
A likely global growth slowdown poses a challenge for the current resources
cycle.
Oil
Prices
Searching for an Explanation
Higher oil prices can be viewed as a response to refining capacity shortages
rather than the result of insufficient natural resources.
Banks v Resources
Should there be a new portfolio order?
Some long held views about the mix between banks and resources companies in
Australian equity portfolios warrant reappraisal against the background of
changing market conditions and a longer spread of data covering a full cycle for
each sector.
Asset price Deflation
Is Japan the Model?
Investors face critical judgments about how quickly more normal economic
conditions will resume in the USA. Japan's experience should not be
ignored.
US
Recessions
How quickly can markets recover?
Equity markets have usually anticipated changing conditions and have begun to
improve well before a recession has ended but markets are moving with increasing
speed in response to changing circumstances.
Gold
If Not Now, When?
Financial market conditions during
the past year should have suited gold related
investments. If anything, the gold price reaction
and the response of related equities have been
disappointingly weak.
Corporate Governance
Resources versus the rest
There is more evidence that Australia’s resources
companies have a poor governance track record with
the potential to harm investor returns.
Commodity Prices
The transition risk
Ongoing strength in global
commodity markets depends on there being a seamless
transition between the beneficial effects of
monetary stimulus and, as it is withdrawn, the
impact of an acceleration in global growth.
Improved Resource Sector Sentiment
Impressions from
the Asian Mining Congress
The mood within the
resources industry has improved dramatically but financiers are still
reluctant participants.
New Pricing Arrangements
Bulk commodity
producers to change risk profile
Changes to the way some of
Australia's major export commodities are priced
should prompt a change to equity portfolio design.
Having BHP Billiton viewed as an investment suited
to the more conservative investor could need
rethinking.
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