How to respond
Across my articles and media commentaries, I have emphasised that preparing for an artificial intelligence (AI) re-pricing is not about timing a top or shorting tech, but rather about protecting capital through discipline, factor balance, and liquidity.
Last week, Google reported its first ever quarter of negative cash flow, surprising analysts who thought Q1 2027 would be when pressure on cash flows could seriously emerge, and causing the share price to plunge more than seven per cent.
If you’ve been following the technology headlines, you might be confused by two seemingly contradictory statements. The first is that artificial intelligence (AI) is becoming dramatically cheaper to run, and the second is that tech companies are spending more money on AI compute than ever before.
When I wrote Value. able in 2010, ‘Quality’ as an investing factor was gospel, a foundational truth: buying fundamentally superior businesses at reasonable prices and holding them over the long run was the surest path to wealth creation. Individuals like Warren Buffett, Charlie Munger, Mohnish Pabrai, Seth Klarman, Howard Marks and Terry Smith proved, over decades, that Quality rules.
Many years ago, I was asked by an AFR journalist whether I would revise my valuation of ABC Learning Centres, which was a tiny fraction of the traded price at the time, given the Singaporean Sovereign Wealth Fund (Temasek) had just invested in the company’s then-latest capital raise at a much higher market valuation.
Inside every smartphone, laptop, PC, smart speaker, smart TV, digital camera, USB flash drive and gaming console is a memory chip. And then there are industrial, medical and military applications. As an aside, Dramatic Random Access Memory (DRAM) and Not And (NAND) are the high-volume, commodity memory semiconductor components, working together in every device.
If you’ve been following our blogs and Montgomery Minutes about noted short seller Michael Burry, you’ll know he’s been making headlines this year for shorting the artificial intelligence (AI) bubble. Late last week, he reported he has again increased those short bets.
Consumer confidence appears to be slowly improving after hitting its lowest level in 53 years in April 2026. While the recent uptrend is encouraging, confidence remains fragile, with household debt, cost-of-living pressures and recent interest rate increases still weighing heavily on consumers.
The latest property data confirm that Australian national aggregate home prices declined by 0. 3 per cent to 0. 4 per cent in June 2026 – marking the third consecutive month of declines and pushing values roughly 0. 9 per cent below their autumn peak.
As we begin Fiscal 2027, it is worth taking a step back to reflect on the major themes that shaped global markets over the past year. I explore the key developments across equities, bonds, interest rates, commodities and currencies, and consider what they may mean for investors going forward.
