Sucks to be them Bear. That Alpha Fund rang a bell and so I checked my emails and found an old invitation to invest from five years ago.

Notice the wording: "The aim...is straightforward; to generate positive returns irrespective of whether the stock market rises and falls" - that comment doesn't age well. Not surprisingly the old links don't work.

I'm going off memory here but pretty sure the pitch this was a very conservative style of investment. Their comp was the RBA cash rate. The strategy was to be equally long and short. They would go long on 'high quality' companies and short on 'low quality' companies. So all things being equal they would get no alpha from the market and all the alpha from an assessment of quality of the company, their product and management. Here was their performance over nearly four years:

The only thing that sucks worse than to be them is to be their investors.

05-Dec-2021: Just read this from Roger Montgomery (dated 19th November 2021): Inflation fears will soon fade… « ROGER MONTGOMERY

I'm not as optimistic myself; I think we are going to get some wage pressure and inflation will pick up, but Roger does present an interesting view there.

One of the reasons I think we are going to see rising wages is that there are shortages of skilled workers all over the place currently, particularly in mining and mining services. FIFO was either not possible at some stages in recent times, or was problematic, particularly if you lived in a different state to where you worked, and even with all border restrictions removed, if that ever happens, things are not going to just go back to the way they were two years ago, because there have been some fundamental shifts in some workforces. Some people have given up work, or looking for work. Others have changed jobs or changed careers and are now working in completely different industries. You can't shut down sectors for months and then expect that all of those workers are going to be sitting at home waiting for the phone to ring when you want to fire up again. That's my thesis anyway, that people have tried doing different things, and they like those different things more than what they were doing previously. Increased wages is a natural progression from a worker shortage, and increased wages in some parts of the economy tends to lead to wage pressure in the rest of the economy. "If you want me to work for you, you're going to have to pay up, because I can see other options out there that pay a lot better than what you are offering." That sort of thing.

This is based on FY results commentary and AGM comentary from mining services companies and other companies (like engineering and construction companies), as well as feedback from people who work in those industries, particularly in remote areas. There is plenty of work, but not plenty of workers, and the amounts being offered are rising along with the worker shortages.

By the way, when searching for this thread, I also found another one with a similar name, and a similar theme - Where to from here for ASX? (strawman.com)

Many of the posts are from me, and are usually inspired by something I read on the day that I thought was worth sharing and discussing. It's interesting that a number of the topics we were discussing 12 and 18 months ago, are often the same topics we are discussing today, because we still see the same indicators, yet here we are, the sky hasn't fallen in, and the market keeps grinding higher over time. There WILL be another major crash or "correction" at some point, and a few minor or ordinary corrections along the way as well, but we always recover from them, and so I tend to remain alert but not alarmed, and I'm usually mostly fully invested, most of the time. Damn near all of the time actually. I have never sold everything and gone to cash, I have never even gone to 50% cash, and if I ever do that will likely signal the bottom of whatever we're going through at that time and the market will come roaring back as soon as I've sold up. Just like most companies that I buy tend to fall immediately afterwards. Luckilly a good number of them rise later, to well above my buy price. Not all, but a good number. As long as the investment thesis still holds up, and you can't see a better place to put that money (a better idea with more upside and less risk), then the best thing to do is usually to do nothing at all. Volatility is our friend. It's Mr. Market at his irrational best. It's where the best opportunities come from. Instead of keeping a lot of cash on the sidelines waiting for a crash, I'd rather wait for a crash and sell some cheap stocks to buy some REALLY cheap stocks. That way, when the market IS going up, I'm fully exposed to that. I just see cash as a wasted opportunity mostly. But that's just me, and it won't work for everybody.

01-Oct-2020:  https://www.livewiremarkets.com/wires/is-a-vaccine-already-priced-in

Is a vaccine already priced in? by PATRICK POKE (Livewire Markets)

It is unlikely global sharemarkets would have rallied back from March lows to all-time highs without optimism over a Covid-19 vaccine. And while progress towards effective treatments and ultimately an effective cure will continue to drive markets into 2021, investors still need to consider a range of potential outcomes.

With this in mind, we asked Andrew McAuley from Credit Suisse, Olivia Engel from State Street Global Advisors and Anthony Aboud from Perpetual Investments how important (or unimportant) they believe a successful vaccine or treatment for Covid-19 will be to the recovery of markets and economies, and to what extent these positive developments have already been factored in by investors.

--- click on link for more ---

Adapted from Marcus Padley's Saturday Morning email today (01-Aug-2020):

Looking at the Australian and US share markets, it’s reasonable to expect further volatility unless/until a COVID-19 vaccine has been successfully developed and trialled. 

On Friday 31st July, the Apple (NASDAQ: AAPL) share price rose +10.5%, Facebook (NASDAQ: FB) rose +8.2% and Amazon (NASDAQ: AMZN) was up +3.7% (with reported revenue up +40%).  On the back of those moves, the NASDAQ managed a +1.49% rise and the Dow Jones rose +114 points (Apple is in the Dow Jones index). 

Meanwhile the real economy hasn’t improved, with Caterpillar (NYSE: CAT) down -2.8% on results, Chevron (NYSE: CVX) down -2.7% on results, Boeing (NYSE: BA) down -2.4%, Under Armour (NYSE: UAA) down -8.1%, Expedia (NASDAQ: EXPE) down -4.6%, and Wynn Resorts (NASDAQ: WYNN) down -5.2%.   

The Tech sector is holding up the US indices on its own.  Six Big Tech Stocks account for almost 30% of the S&P 500 and they are making a fortune out of the pandemic which has sat the global population in front of their computers and those companies’ products.  

When you consider that the average annual revenue per employee of Apple is US$2.89 million, Alphabet (Google) is US$2.08m, Facebook is US$7.97m, Netflix is US$11.06m and Amazon is US$2.53 million, you begin to realise that these companies, which also pay less tax than the average S&P 500 company, are fantastic investments for their shareholders but are not helping the employment problem in the US, which means the stock market that they support is not representing the US economy.  

No wonder the Stock Market Market-Cap-to-GDP ratio is at a record 1.5x  (Warren Buffett says it should be about the same, i.e. 1.0x). 

Bear77 adds:  Back here in Oz, we don't have that massive Tech sector propping up our own share market.  Our largest two sectors - Banking and Materials - have been MUCH more subdued.  While there are clearly some individual companies on our market who are trading at higher prices than the fundamentals suggest they should, and there are also clearly pockets of the market that look overpriced (sectors or sub-sectors of sectors), on the whole I believe our market is more reflective of our underlying economy and its outlook - along with the outlook for our Australian listed companies.  The Tech-sector distortion that is evident in the US market is not a problem here.  We don't have a handful of companies propping up our market like they do. 

I'm not particularly bearish on the US Tech sector - I retain exposure to it via MGG, MHH, WGB and WQG.  However, I'm not personally investing directly in US companies.  I'm leaving it to those fund managers who specialise in that.  There are plenty of opportunities here on the ASX to keep me busy.  And our market is more reflective of the reality out in the community, in the real world, where things are not wonderful, and many companies are still struggling, especially the smaller ones and the ones with higher cost bases - and the more capital-intensive businesses.  Obviously the market is forward-looking, so most companies are priced for where the market sees them in the future rather than where they are today, and there are some reasons to be hopeful about the future.  But there is plenty of uncertainty as well, and I think that's clearly priced in with many of the companies I'm looking at - or hold.  And that can certainly present opportunities if you are prepared to take a longer-term view with patient capital.

Our market is far from perfect, but it's better than what I see when I look over at the US market.