The Last Straw

We love to speak of “the market” as though it were some grand, external force. A sentient, often malevolent titan whose outcomes can be predicted, controlled, or judged as morally “right” or “wrong”. Something to be exploited, mastered, or controlled. But that completely misunderstands its anatomy. The market is not a static thing; it is a process. It is something […]

Peter Lynch nailed it when he said: “The stock doesn’t know you own it.” The market has absolutely zero memory of how many hours you spent digging through a company’s annual reports before buying. It doesn’t know your name, it doesn’t know your cost basis, and it doesn’t care how long you’ve held it. It doesn’t know anything. Obviously. Yet, […]

On paper, the modern Australian economic story is a masterclass in resilience. Judged by our preferred metrics, we have fully earned our moniker as the Lucky Country, routinely dodging the worst global financial storms of recent decades. There’s a lot to be thankful for. And there are few other places most of us would choose to live. But that doesn’t […]

A concentrated portfolio is not for the faint of heart. For those willing to shoulder the volatility, it offers the prospect of returns far beyond what broad diversification can provide. But by that same token, it invites far deeper losses. It is a question of degrees, of course, but the unavoidable truth remains: if you want to materially outperform the […]

I was recently fossicking through the archives and tripped over a piece I wrote back in 2018. It was a time when everyone was convinced the market was about to fall off a cliff; the indices had nearly doubled since the GFC lows and tech valuations were being described as “nose-bleed” by the pundits. With the market again at record […]

Spreadsheets are a great tool, but they tend to offer a level of certainty that’s often not justified. We’re taught to believe that more data and more intricate calculations lead to better decisions, but that’s a myth rather convincingly debunked by researchers Green and Armstrong. In their paper, “Simple versus complex forecasting: The evidence,” they showed that when it comes […]

The ultimate destination for any successful enterprise is to become a dividend machine. If a company never reaches a stage where it can sustain a regular flow of cash to its owners, should it choose to do so, then it represents a total failure from a capital investment standpoint. A company may create jobs and provide products that customers desire, […]

Successful investing is ultimately about identifying activities that deliver a positive return on invested capital (ROIC). The more money you generate, and the sooner you generate it relative to every dollar put at risk, the better. Period. Full stop. End of story. This fundamental truth holds steady whether you are a business, an individual, or a government. While it is […]

From a largely agrarian third-world country, impoverished under a brutal communist regime, China has grown to be the world’s second-largest economy in just a few short generations. (Actually, it already claimed that title in 2016 if you measure things in purchasing power parity instead of GDP, which arguably, you should). Since the turn of the century, GDP has grown from […]

Navigating the hype surrounding a new technology is one of the trickier challenges we face as investors. It’s not so much about spotting the affinity scams and over-promotional rubbish; you learn to identify those quickly, especially if you’ve been bitten before. Nor is it even about sensing a technology’s legitimate potential. Eventually, if you’re paying attention, you can get a decent […]