Most S&P500 companies are doing well with recent reported earnings above expectations. In the tech sector, the Big Five (Apple, Amazon, Microsoft, Facebook, Alphabet) have also diversified their income sources.
A reader of Cuffelinks sent an email to the Shadow Treasurer complaining about the future loss of franking credit refunds. Here is Chris Bowen’s response and a firm stance on the policy.
Australian banks appear cheap and their shares trade below broker targets. But three analysts offer deeper explanations that suggest stronger credit standards will affect house prices and credit growth.
The long bull market allowed passive investing to prosper, but over a whole cycle, companies with better fundamentals will outperform weak ones. The market is finally showing some dispersion.
Mary Meeker’s Internet Trends Report is a fantastic annual update on technology trends. Given how much technology stocks dominate sharemarket growth, it’s worth a thorough read.
Labor’s rhetoric of taxing the rich and standing up for women doesn’t match the facts. Their proposed imputation policy, if implemented, will raise little revenue and hurt low- and middle-income widows the most.
Macro trends are almost impossible to forecast, and picking undervalued shares with an eye to the long term is a better way. But often, stock selection requires resilience in the face of criticism.
Labor’s proposal to deny cash refunds of franking credits may become law next year. SMSFs will consider the various alternatives to minimise loss of franking credits, including the use of member-directed investments.
Markets and assets look expensive, but technology at least offers high revenue growth and fast rates of adoption. However, much of that great promise may benefit consumers more than investors.
When rules are changed, behaviour changes as well. A future Labor government should not be surprised when SMSF trustees and self-funded retires minimise the impact of the removal of imputation credit refunds.
Our regular check on the ‘star’ performances from the Australian banks’ May 2018 reporting season in the face of low credit growth, increased regulatory scrutiny and the sales of insurance and wealth management divisions.
Tariffs are often seen as a negative for global trade. However, for road, rail, and port operators, tariffs may only re-calibrate origins and destinations. Political risk and the typically short life of a tariff also need to be considered.
Investors are complacent and expect double-digit profit growth to continue for many years, but the market consensus for EPS growth is now in dangerous territory with more downside potential than upside.
S&P’s SPIVA (index versus active) data now spans 15 years of data on the performance of Australian managed funds. This study illuminates returns from sectors and styles, and investment lessons learned from it.