Investor Insights

Since late October, financial markets have witnessed a significant shift, adjusting to a softer labour market and persistent disinflation. As an aside, the latter – disinflation – was a condition we wrote about a year ago, suggesting it should support the share prices of innovative growth companies, especially those with pricing power.

In a world where the interest rate tide has been rising, savvy investors are sailing towards more stable horizons. The Aura High Yield SME Fund, designed for wholesale investors, has emerged as a beacon of consistent returns, offering a compelling case for investors looking to diversify their portfolios away from volatile seas.

The latest monthly consumer price index (CPI) read released last week, came in unexpectedly lower than anticipated, at 4. 9 per cent in the 12 months to October. This follows the previous read of 5. 6 per cent in September. With the 8.

In this week’s video insight, David Buckland and I discuss Seven Group Holdings (ASX: SVW), an Australian operating and investment group in the media, mining and construction industry in which the Montgomery Small Companies Fund holds a substantial stake. We spotlight the remarkable alignment between the Stokes family’s leadership and investors’ interests, emphasizing Seven Group’s astute counter-cyclical investment strategy. Additionally, we explore their recent strategic acquisition of Boral (ASX: BLD), shedding light on their concerted efforts to enhance operational efficiencies and bolster margins. Catch the full discussion here.

As we monitor the behavior of the Australian consumer, it’s crucial to acknowledge that consumption constitutes approximately 50 per cent of Australia’s GDP, significantly influencing decisions related to interest rates. The robust trading update presented during the annual general meeting (AGM) by Temple & Webster Group (ASX: TPW), an online retailer specialising in furniture and homewares, prompts thoughtful consideration.

As China reflated its economy in 2015, we saw a massive five-to-six-year tailwind assisting the property boom. Speculation and strong property prices led to over-supply, and the eventual carnage experienced by most highly levered Chinese property developers over the past two years.

Unsurprisingly, consumer spending dominates all other categories and contributors to economic growth in a consumption-based economy such as Australia’s. Australia’s private consumption accounted for 49. 8 per cent of nominal gross domestic product (GDP) in the June 2023 quarter.

Central banks across the globe find themselves in a challenging predicament, and our own Reserve Bank of Australia (RBA) faces a particularly delicate situation.

I believe REA Group (ASX:REA), is one of Australia’s highest-quality businesses. REA Group’s online portal – realestate. com. au – is the go-to destination for people wanting to buy, sell or rent property. Price rises in all property related areas have led to substantial revenue and earnings growth and have turbo-charged REA Group’s share price.

Last week the team attended the Australian Securitisation Forum. The event is held annually and brings together the leading industry bodies, representing participants in the securitisation and covered bonds markets. We had the opportunity to hear from a wide range of market leaders and competition. Each provided valuable insights into their own current views and outlook on the market.

I have had my fair share of bad calls. After more than three decades of investing, it’s safe for me to predict that there is next to no advantage in making predictions.

As a result of the corporatisation of restaurants, there’s a plethora of them. The emergence of the Restaurant Group – Merrivale, Bentley, and The Speakeasy Group are examples which offer a business solution to the cost of independence through bulk buying power (for food and fit-outs) and merged accounting and marketing functions.