Data Diary

Australian equities have benefited from two major trends over the last couple of decades (casting aside the credit bubble on the grounds that it hurt).  They are 1) the growth in our compulsory superannuation investment pool and 2) the growth in China’s demand for all things resources.  It’s interesting then to compare and contrast the [...]

Reflecting on the following chart via Pragmatic Capitalism (here) – got to thinking about how the same might apply to Australia: So herewith is the log chart of the All Ordinaries price history since 1875: Now you might argue about the choice of market cycles – I admit to liking the symmetry of ~27 year [...]

Sometime back we suggested that the PE ratio for the equities market was likely to fall relative to recent decades.  Based on some spurious pointing at historical charts, we came up with an expectation that the average PE ratio might be more like 12x (see here).  On our numbers that suggested ‘fair value’ was around [...]

The current selloff has the market staggering.  Unlike previous tick-downs in the rally since March 2009, fear is making a comeback.  Our measures of relative risk appetite have broken out.  It’s reason to tread carefully cause until we get some signs of normalisation, further downside is more likely than not: The evidence that it’s a [...]

Of this much I am certain, Australia’s new Resource Super Profits Tax – the ‘RSPT’ (where are MacBank’s master acronym makers when you need them) – is going to be a bureaucratic nightmare to administer.  Still with the sums involved, I guess we can forgive the government for doubling the size of the ATO. After [...]

Following from the previous post (here) that suggested that ‘fair value’ for the All Ordinaries is around 4250 – just to clarify, I’m using the term ‘fair value’ as an indicator of where I’d be willing to overweight equities. Not sure how this compares to a forecast from a broker calling for 5500 for the [...]

Following on from our previous reflections on fair value for the All Ordinaries (find it here)… Log charts are a misunderstood lot. For a start there’s a certain mystery just cause logarithm is a four syllable word. Also, they’re something of a party pooper – flattening the good-times exponential as they do. Still, when looking [...]

It’s a little slow in the release but the OECD CLI remains a handy reference as a global growth barometer.  The April communique covering the month of February was released last night (you can find it here). The recent trends are unchanged – global expansion is still relatively strong but momentum is slowing. The major [...]

Today’s assignment – to assess what level might represent fair value for Australian equities. It’s a dubious but necessary task. Numbers will say what you want if you apply the thumb screws often enough. So with that caveat, let’s go to the charts. First up, a look at PE ratios through the lens of monthly average [...]

Interesting analysis from the Contrary Investor (click here) Funny, I’m coming around to the same range trading view – that we oscillate between fear based on fundamentals and greed based on liquidity.  That money printing and government stimulus (in its many and varied hues) is here to stay with the net result that equity markets [...]