Category Archives: Oliver Updates


2018-19 saw a rough ride for investors but it turned out okay

02

Jul 2019

2018-19 saw a rough ride for investors but it turned out okay

The past financial year saw a roller coaster ride for investors. Share markets plunged into Christmas only to rebound over the last six months. This note reviews the last financial year and takes a look at the investment outlook for 2019-20.   A volatile but good year for diversified investors The past financial year saw pretty good returns for investors. But it didn’t feel so…

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Don’t fight the Fed… or the ECB or RBA

21

Jun 2019

Don’t fight the Fed… or the ECB or RBA

This decade has now seen three global growth scares – around 2011-12, 2015-16 and now since last year. Each have been associated with softening business conditions indicators (or PMIs) as indicated in the next chart – see the circled areas. Source: Bloomberg, AMP Capital And each have been associated with roughly 20% falls in share markets. Source: Bloomberg, AMP Capital All have seen central banks…

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Australian growth will be constrained but here’s nine reasons why recession is unlikely

18

Jun 2019

Australian growth will be constrained but here’s nine reasons why recession is unlikely

For some time our view has been a less upbeat on the Australian economy than the consensus and notably the RBA. The reasons were simple. The housing cycle has turned down and this is weighing on consumer spending. And this is at a time when the risks to the global economy have increased as the trade war threat has ramped up again. All at a…

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The $A still has more downside, but a lot of the weakness is behind us

14

Jun 2019

The $A still has more downside, but a lot of the weakness is behind us

While some have expressed surprise at the recent resilience in the value of the Australian dollar around the $US0.69-0.70 level despite weak Australian growth and Reserve Bank rate cuts, from a big picture sense it has already fallen a long way. It’s down 37% from a multi-decade high of $US1.10 in 2011 and it’s down 15% from a high in January last year of $US0.81….

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The nine most important things I have learnt about investing over the past 35 years

06

Jun 2019

The nine most important things I have learnt about investing over the past 35 years

I have been working in and around investment markets for 35 years now. A lot has happened over that time. The 1987 crash, the recession Australia had to have, the Asian crisis, the tech boom/tech wreck, the mining boom, the Global Financial Crisis, the Eurozone crisis. Financial deregulation, financial reregulation. The end of the cold war, US domination, the rise of Asia and then China….

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RBA cuts rates to a new record low – why?

05

Jun 2019

RBA cuts rates to a new record low – why?

As had become widely expected in the past two weeks the Reserve Bank of Australia has cut the official cash rate by 0.25% which takes it to 1.25%. This is the first move in official interest rates since August 2016 but is the 13th rate cut in this rate cutting cycle that started back in November 2011 when rates were 4.75%. (It’s not a new…

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The trade war is back – what went wrong, what it means for share markets and Australia

14

May 2019

The trade war is back – what went wrong, what it means for share markets and Australia

After taking a back seat over the last six months as negotiations appeared to make progress the US/China trade war is back on with the President Trump – “tariff man” – ramping up tariffs on Chinese imports again and threatening more and China moving to retaliate. This note takes a simple Q & A approach to the key issues.   What is a trade war?…

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Seasonal patterns in shares – should we “sell in May and go away” and what about renewed trade war fears?

06

May 2019

Seasonal patterns in shares – should we “sell in May and go away” and what about renewed trade war fears?

Since late last year share markets have rebounded with US shares up 25% to their recent high, global shares up 22% and Australian shares up 17% as last year’s worries about tightening monetary policy led by the Fed, global growth and trade wars have faded to varying degrees. Following such a strong rebound some have said that maybe it’s now time to “sell in May…

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Inflation undershoots in Australia – why it's a concern, is the RBA running out of ammo & what it means for investors?

29

Apr 2019

Inflation undershoots in Australia – why it's a concern, is the RBA running out of ammo & what it means for investors?

Surprisingly weak Australian inflation has led to expectations the Reserve Bank will soon cut rates. But what’s driving low inflation? Is it really that bad? Why not just lower the inflation target? Will rate cuts help?And what does it mean for investors? Inflation surprises on the downside again Australian inflation as measured by the CPI was flat in the March quarter and up just 1.3%…

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The 2019 Australian Federal election and investors

11

Apr 2019

The 2019 Australian Federal election and investors

The Federal Election Some might be forgiven for thinking the wheels have fallen off Australian politics over the past decade with the same number of PM changes as Italy, a fractured Senate and “minority government” at times making sensible visionary long-term policy making hard. With the May 18 Federal Election offering a starker than normal choice political uncertainty may see another leg up. Polls give…

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