The Last Straw

This week, the Reserve Bank of Australia cut interest rates by 0.25%. A quarter of a percent. One part in four hundred. And judging by the media’s reaction, you’d think we’d just discovered cold fusion. The headlines were breathless. The analysis was feverish. Pundits on TV, eyes bulging, declared that relief had arrived! Struggling homeowners could breathe again. Businesses would now, […]

As investors, we tend to spend a lot of time thinking about value. Or, at least, we should. The simple reality is that even if we buy shares in the world’s greatest business, we can still lose our shirt if we pay a stupidly high price. But what makes a price stupid? How can we possibly know what is reasonable […]

“We need education in the obvious more than investigation of the obscure.” — Justice Oliver Wendell Holmes A great irony of economics is that the simplest, most fundamental of principles are often the hardest to accept. Probably because they can rub against our intuitions or, more often, our ideologies. Such impediments are common in many domains, but at least in […]

Extraordinary returns come from extraordinary mis-pricings. And those only happen when most people hold a deeply flawed vision of the future. The trouble is, the dominant view never feels unreasonable at the time. It usually seems obvious — self-evident, even. That’s precisely why so many people, including the seasoned pros, buy into it. And let’s be honest: it takes a […]

I’ve had a tough time of late with my home broadband provider, Optus. The details are too painful (and boring) to recount, but let’s just say that after 10 days without internet, I’ve learned the true meaning of “on hold.” Rather than scream into the void, I decided to channel my rage productively: digging into Optus’s financials. If it sucks […]

This time last year, the big names in finance were practically shrugging at the Aussie market’s prospects for 2024. AMP predicted a modest 4% gain, with the RBA supposedly cutting rates from 4.35% to 3.6% to keep things afloat. UBS said the ASX200 would end the year right where it started. ANZ forecasted “mid-single-digit returns with risks skewed to the downside.” […]

With a little over a week before the end of the year, I think our little investment community can safely declare success for 2024. The Strawman Index, which tracks the most widely held stocks across member portfolios, smashed it out of the park with a 23.5% return for the 12 months through to December 19. Handily outpacing what was a very […]

Everyone loves to talk about being a “long-term investor.” It almost sounds noble, and certainly a far wiser pursuit than the degeneracies of trading. Not without good reason, either. When your focus is beyond the immediate future you allow time for compounding to do it’s thing, and you’re less likely to be shaken out by volatility. When you find a great […]