08 May 2018
The first principle of the ALPS Fund’s strategy is based on the fact that staying invested in equity markets over the long term produces very good returns – an average of 8.8% pa in the US since 1871, and slightly better in Australia over a shorter period. This is why, most of the time, the Fund owns shares in the Australian, US, and European markets… [read more]
Apr 18, 18
Trade wars are not like ordinary wars. They don’t start with a formal declaration of war, or with an informal one like the bombing of Pearl Harbor. They get under way slowly, with tit-for-tat threats which escalate step by step… [read more]
2 Mar, 18
There are very few stocks that most fund managers would buy and hold for 10 years – with the notable exception of everyone’s darling, Berkshire Hathaway, which famously never ever pays a dividend (with no complaints from the shareholders!)… [read more]
As we investors watch famous names in retailing crumble under the relentless assault of Amazon, we start to wonder, “Which sector will be the next to be disrupted?” Then we think, “Will the companies in my share portfolio survive all these changes?”… [read more]
2 Oct, 17
Anyone who has been to Beijing in winter knows how bad the air pollution is there. The same is true of many Chinese cities because, from the 1980s on, governments at all levels were focused on maximizing economic growth and job creation. The future careers of local officials were heavily determined by the GDP growth rates which they managed to achieve in the areas under their supervision… [read more]
1 Sep 17,
Since 2008 the Chinese government has had an official policy called chuqu, or “going out”, which encourages Chinese companies to expand overseas by means of building new assets and acquiring existing assets. The strategy of building new assets has been mostly successful, with some exceptions: CITIC’s Sino Iron project at Cape Preston, Western Australia, for example, opened four years late, has run 200% over budget, and is still not profitable… [read more]
24 Aug, 17
Chinese banks and other lenders have enjoyed years of double-digit credit growth, but in March 2017 the authorities stopped the party, turned the lights on, and took away the alcohol. Abrupt changes in the leadership of the three main regulators (of banks, brokers and insurers) were followed by equally abrupt changes in regulatory style. Draconian new rules were issued and existing rules were enforced much more tightly… [read more]
3 Jul, 17
SHARE MARKET INDICES
The Dow Jones is one of the oldest share market indices and probably the best known. The Dow Jones Industrial Average (to give it its full name) was created in 1896 by Charles Dow and Edward Jones in order to give an aggregate picture of trading on the New York Stock Exchange. The Dow is currently owned and managed by a subsidiary of S&P Global, which also owns and manages the Standard & Poor’s indices. It is based on the share prices of its thirty constituent companies, which are selected by an arcane process.
The Dow started out in 1896 at a value of 40 and has now passed 21,000. This growth tends to show how much the value of the US share market has increased in the last century… [read more]
15 Jun, 17
Way back in 1981, the writer William Gibson remarked “The future is already here – it’s just not very evenly distributed.” Investors tend to think of stock markets as predictive, but they are mostly the result of economic activity in the past.
The largest sectors of a stock market are those which have done well in the past. They are made up of companies which have consistently made large profits and raised large amounts of capital. Investors have come to expect that these companies will keep making profits and paying dividends. But most companies don’t survive for long… [read more]
23rd May, 2017
Many people choose the passive approach to investing – they put their long-term money into index ETFs or index funds which mirror the standard share market indices, such as the S&P500 in the USA or the S&P/ASX200 in Australia. This is perfectly reasonable. After all, one of the greatest active investors of all time has recommended the passive approach. In 2014 Warren Buffett told his wife that, after he died, she should put 90% of her money into an index ETF which tracked the S&P500, and the other 10% into a high-quality US government bond ETF… [read more]
