Investor Insights

This week the NAB released the May monthly business survey, reporting an easing in confidence but a strong outlook for conditions. Despite fears, forward indicators suggest that businesses still maintain a relatively positive outlook for the Australian economy.

If you had to pick one topic which has overwhelmed investors in 2022, it is inflation. Inflation is where all roads in 2022 have led – it has forced a shift in central bank policy, impacted both wealth and standards of living and dominated headlines in both financial markets and mainstream media alike.

The Australian Prudential Regulation Authority (APRA) and the Reserve Bank of Australia (RBA) released lending and deposit statistics for April last week. The data shows a continuation of the acceleration in loan book growth, which is now running at its highest level since 2008. Business lending growth has continued to accelerate while mortgage lending growth appears to have stabilised.

This week the Australian Bureau of Statistics reported a second consecutive quarter of GDP growth. Australian GDP rose by 0.8% in the March quarter and was up 3.3% through the year, a more subdued increase following the rise in the last December quarter.

With the share prices of tech stocks having cratered in recent months, there are perhaps few more opportune times than now to revisit the important difference between Price and Value. It may surprise investors that every business has a real worth or a true value that may bear no resemblance to the currently traded price.

This week we saw a change in government, the release of household spending data and Australian business conditions and sentiment data. During the lockdowns of both 2020 and 2021 we saw a distinct uptick in the household savings rate.

The share price of medical device company, ResMed (ASX:RMD), has struggled this calendar year due to supply chain issues and tumbling equity markets. While it can’t do anything about the markets, at the recent Macquarie conference its CFO, Brett Sandercock, explained how the company is making its supply chain more robust in order to capture longer-term market share.

My colleagues and I have just received an excellent presentation from the Portfolio Managers of the Montgomery Small Companies Fund, Gary Rollo and Dominic Rose.   To remind readers, the fund was launched on 20 September 2019 and in the twenty-five months to 31 October 2021 the Fund had turned $1. 00 into $1.

This week we saw the final piece of the RBA’s long-awaited evidence released. The Australian Bureau of Statistics (ABS) Wage price index for the quarter up to March 2022 showed, as expected, a rise in the seasonally adjusted wage price index.

Conditions are about to get tougher for retailers as they face a perfect storm of falling incomes, galloping inflation, and rising interest rates.   These impacts will crimp the discretionary spending power of many people. The one exception could be the under 25-year-old Gen Z demographic, who have fewer non-discretionary costs than other age groups.

In their laser like focus on competitively advantaged global companies, the team running the Polen Capital Global Growth Fund, led by Damon Ficklin and Jeff Mueller, have used the recent market weakness to increase the portfolio weighting for Amazon, Automatic Data Processing and Siemens Healthineers at attractive prices. Amazon. com, Inc.

  In this video Damian Bird highlights portfolio movements during the March quarter. A new position was added, TSMC, Taiwan’s leading semiconductor foundry. For more than 20 years, the company has delivered returns on its internally invested capital of approximately 20 per cent well in excess of its cost of capital.