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Caltex: Shrink to grow

Caltex: Shrink to grow

SAM DYSON | Investors love companies that can deploy capital at high returns over a long period of time. However, great shareholder returns can also be achieved from companies that shrink their capital base. Take Caltex for example. It operates in an industry perceived to be dying. Vehicles are ever more fuel-efficient, and cheap battery […]

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08, June 2018
Australian equities
The bubble in quality

The bubble in quality

JASON TEH | It is hard to spot a market bubble in the making. As they inflate, market participants often rationalise their investment decisions as to why they are paying higher prices. It’s only after they burst that that bubbles become clear. The most recent bubble bursting has been Bitcoin. Now we would contend that […]

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27, April 2018
Australian equities | Australian shares
The real danger lurking in the shadows

The real danger lurking in the shadows

JASON TEH | While many investors fret about bonds or bond-like proxies from rising interest rates, the real danger lurking in the shadows is the prospect of rising risk premiums. Interest rates globally have already normalised and maybe there is a little more to go. And today bond-like stocks already have wide risk premiums. But […]

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16, April 2018
Australian equities | Australian shares
Defensives: perception v reality

Defensives: perception v reality

JASON TEH | Are Australian bond-like proxies going to suffer a bondcano moment? Certainly, stocks that have defensive characteristics have been sold down in recent months. And bond bears would have it that they are collateral damage from rising US yields. However, we believe this is a false narrative. Hence, we need to go back […]

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11, April 2018
Australian equities | Australian shares
Run for the hills... interest rates are exploding

Run for the hills... interest rates are exploding

JASON TEH | …Or that is what some equity pundits masquerading as bond experts want you to believe. They predict that a ‘bondcano’ of rising interest rates will lead to collapsing prices for bonds and bond-like proxies. Over the last few months, this hype about rising global interest rates reached fever pitch due to: US […]

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06, April 2018
Australian equities | Australian shares
Myer: Winter is coming

Myer: Winter is coming

DANIEL MUELLER | What do Amazon, Buffett and Sydney CBD retail have in common? You know about Amazon and its potential to destroy retailers. While Amazon’s Australian launch last December was somewhat underwhelming, one could consider it a ‘soft’ launch. Whether it’s next year or next decade, odds are Amazon will get its offering right. […]

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27, February 2018
Australian equities | Australian shares
The sky is not falling, but storm clouds are brewing

The sky is not falling, but storm clouds are brewing

JASON TEH | The sky is not falling was the message in September 2017. Our message was that the overall market did not show excessive valuations, which generally is a precursor to stock market corrections. However, our market outlook dimmed due to recent ‘risk-on’ rally, where most of the year’s return was delivered in the […]

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29, January 2018
Australian equities | Australian shares
Big hat, no cattle

Big hat, no cattle

SAM DYSON | Mining 101: a good mining company makes money at the low end of a steep cost-curve. This is BHP’s strategy and it is working wonders in iron ore. However, in 2011 BHP forgot this simple rule. Deal hungry and with cash flow burning a hole in the pocket after two failed takeovers, […]

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16, November 2017
Australian equities | Australian shares
The yield trap of 2017

The yield trap of 2017

DANIEL MUELLER | Want to know the biggest yield trap of 2017? Each year there are dividend plays that turn out to be yield traps. In 2012, it was QBE. During 2012 to 2014, we saw several consumer stocks turn out to be yield traps including Seven West Media, David Jones and Myer. The year […]

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16, November 2017
Australian equities | Australian shares
Telstra's Trump moment

Telstra's Trump moment

DANIEL MUELLER | Did Telstra just have its Trump moment? Prior to Telstra’s FY17 result, media articles abounded speculating the company was going to announce the securitisation of its recurring NBN payments. The media cited various analyst reports that a securitisation of up to $18 billion was about to create a capital management bonanza for […]

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16, November 2017
Australian equities | Australian shares