Investor Insights

  In this week’s video insight Stuart identifies the impact low interest rates have on the banks. On the back of three successive 25 basis point cuts to the RBA’s official overnight rate, the major banks have reduced their standard variable mortgage rates by a cumulative 55 to 59 basis points over the same period.

As we head into annual general meeting (AGM) season in Australia, one of the topics that will no doubt receive some focus will be management remuneration. This is increasingly a vexed issue in Australia and other developed markets, with management remuneration generally having skyrocketed in relative terms in recent decades.

Consumer packaged goods brands have been working to keep up with new world trends for some time now. The introduction of more affordable private label products and the general shift to be fresher and healthier have left the major brands behind.

Back in November 1990, with the Australian economy deep in the doldrums, Treasurer Paul Keating uttered his now famous remark that this was “a recession that Australia had to have”.   It was, remarkably, Australia’s last recession.

As news is emerging that Australian Treasurer, Josh Frydenberg, will soon deliver a balanced budget for the first time since the GFC, one needs to ask if this is even appropriate today.

We recently launched the Montgomery Small Companies Fund.   This new fund has invested in some truly dynamic businesses that we believe will deliver superior returns over the coming years.   One of those is EML Payments (ASX: EML). EML is one of our fund’s initial top five holdings.

  In this week’s video insight Tim discusses the revised strategy of our Montgomery Alpha Plus fund.  While one year is too short a timeframe for a meaningful analysis of fund performance, the early signs are encouraging.

As the sharemarket gyrates around record highs, it is easy to conclude that risks are low. In fact, if a simple market truth is observed – that the higher the price you pay, the lower your return – then it must be true that as the market registers new highs, conditions are riskier.

Codan (ASX: CDA) is a manufacturer and supplier of communications, metal detection, and mining technology.  One of its businesses is called Minetec.  It’s a location tracking system that promises to add value to underground mining operations around the world, and has already been adopted by the likes of Newmont and BHP.

Much has been written about Kraft Heinz (NASDAQ: KHC): a business which names Warren Buffett’s Berkshire Hathaway as its largest shareholder and one with a stock price that has declined by around 70 percent over the last two years.

When it comes to investing, it can often pay dividends to zag when everyone else is zigging.   And that’s equally so when it comes to interest rates. At a time when everyone is assuming that rates will go to zero – and possibly beyond – it may be worth stepping back and pondering… what if they don’t?

When it comes to investing in global technology stocks, it pays to do your homework. Because there are some major differences between the big brands that dominate the space. Take Google, Facebook and Uber, for example. Exclusive Content This is exclusive content to subscribers on rogermontgomery. com. View the full article via your subscription or sign up for access.