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Roger Montgomery
A Valuable Treatment
Added On - 6/23/2017 4:49:00 PM
To generate value, you don't need to solve a problem, you just need to provide a solution that's materially better than your competitors.
Amazon's Whole Foods Buy & Aussie Retailers
Added On - 6/23/2017 10:47:29 AM
With the U.S. behemoth about to set foot on our shores, should Coles and Woolworths be even more alarmed?
Where Is The World's Largest e-Commerce Market?
Added On - 6/23/2017 10:43:49 AM
Consider this: China already has over three times the online population of the United States.
Why We're Cautious On The Outlook For Coles
Added On - 6/21/2017 11:22:46 AM
On 7 June, Wesfarmers held its strategy day. Two weeks on, and the echoes of bad news are still ringing, because what we seem to be witnessing in the supermarket price wars is a race to the bottom. But is it a war that either incumbent can win?
Video - Are Share Prices Over Extended?
Added On - 6/20/2017 11:18:56 AM
In this week's video insight Roger discusses why fund managers may currently have maximum cash in balance sheets or portfolios and how correction in share prices might be short lived, as the cash is freely available to purchase stocks which limits the extent of a market decline.
Why It Pays To Start Financial Education Early
Added On - 6/20/2017 11:14:39 AM
Kids today need to navigate a world in which finance and financial products are becoming increasingly complex.
The Retail Outlook Looks Bleak
Added On - 6/19/2017 11:24:31 AM
We have very stagnant real wage growth and significant upcoming increases in non-discretionary costs like electricity, which together paints a very dire outlook for retail spending.
The Curious Case Of Fed Normalisation
Added On - 6/16/2017 11:10:37 AM
For the first time since the Fed began its quantitative easing program in 2009, the FOMC announced it would start a gradual unwind of its balance sheet sometime this year.
Ten Times Trouble
Added On - 6/15/2017 11:35:15 AM
No fund manager will ever get every investment right but avoiding a loss in Ten has been relatively easy. Indeed we warned investors multiple times not to follow the billionaires into this one.
Amazon, Tell Me More..
Added On - 6/14/2017 11:36:30 AM
Recently Daniel Wu recorded a video insight that was so popular our readers have asked for a transcript. Amazon does not just compete on price, and he shares two important insights into how Amazon might look to operate in Australia.
The 'Smashed Avocado' Index
Added On - 6/13/2017 11:51:53 AM
We thought it would be fun, and enlightening, to start a blog series called the 'smashed avocado index'.
Companies Benefiting From Demographic Trends
Added On - 6/9/2017 10:54:02 AM
We like to invest in businesses with products and services where the underlying demand is strong and predictable. And when it comes to predictability, there are few things as certain as demographic trends.
Fast Facts About Super
Added On - 6/8/2017 5:55:38 PM
Did you know that Australia is the fourth largest holder of pension fund assets in the world? It's a staggering achievement, given that the idea of universal super for the whole workforce only began in 1983. Here are some fascinating facts about the current state of play.
How To Invest Like Chuck Norris
Added On - 6/8/2017 11:00:57 AM
Action hero and martial artist, Chuck Norris is widely associated with an internet meme that documents fictional and often absurd feats associated with him. Now, wouldn't it be handy to have some of those supernatural powers when making investment decisions?
Wrapping Up Vita Group
Added On - 6/8/2017 10:58:50 AM
Today's blog will most likely be our final with respect to Vita Group Limited (ASX: VTG). In a portfolio of 20-30 companies, we will make mistakes - and VTG is, in absolute terms, one of our larger ones.
Do We Really Understand How Amazon Operates?
Added On - 6/7/2017 10:55:17 AM
In this week's video insight Daniel Wu discusses Amazon, as several interesting insights came from a lunch he attended with the CEO of an Australian e commerce company. Including the point that Australian investors have a limited understanding of how Amazon operates.
How China's Debt Bubble Could Hurt Australia
Added On - 6/7/2017 10:51:28 AM
Willem Buiter is the highly respected Chief Economist at Citigroup, and when he speaks, people tend to listen. Last week, in an interview with the ABC, Buiter sounded a strong warning about China's debt bubble, and the ramifications for Australia.
Take-Two's Powers Its Share Price To New Highs
Added On - 6/6/2017 3:03:39 PM
Our global funds have owned shares in video game company Take-Two Interactive since their inception. During that time, the stock price has surged by over 180%. We were ahead of the pack in selecting TTWO as a key holding, and I'd like to set out why we were attracted to the business.
We Banked On It
Added On - 6/6/2017 3:00:13 PM
Back in January this year, The Montgomery Global Fund's Portfolio Manager, and CIO for Montaka Global Fund, Andy Macken wrote a blog here warning investors about the quality of Bendigo and Adelaide Bank's (ASX:BEN) earnings.
New Data Show Slowing Loan Growth For The Big Banks
Added On - 6/6/2017 8:45:04 AM
The Reserve Bank and APRA have just released their credit statistics for April. The numbers show a slowing in loan growth rates that was consistent with the recent major bank results to March 2017.
Which Online Platforms Will Dominate The Future?
Added On - 6/2/2017 1:41:58 PM
What are the traits of successful platforms, and how can investors separate the workhorses from the unicorns?
Why We Continue To Put Vocus On Hold
Added On - 6/2/2017 1:39:08 PM
The telco's share price has since plunged to around $3, which prompted us to re-evaluate the business. What we found failed to give us a buzz.
You Should Use More Than One Valuation Metric
Added On - 6/1/2017 11:29:53 AM
When considering companies to invest in, there are a range of valuation techniques you can choose from.
Video - Current Challenges For Investors
Added On - 5/31/2017 10:46:22 AM
In this week's video insight Roger Montgomery discusses the current challenges for investors, particularly those focused on quality and opportunities for growth. This being due to reasons such as the expected downturn in the property market, inevitable downturn in construction activity and record levels of debt.
Is A Tsunami About To Hit Aussie Retailers?
Added On - 5/31/2017 10:43:05 AM
Amazon's arrival will pose a massive threat. But there are other challenges on the horizon for retailers - and investors.
Is Active Investing Dead? Part I
Added On - 5/29/2017 10:40:54 AM
There is no shortage of commentary on the rise of passive investing and the shift of capital out of active strategies and into passive funds. Even the Oracle of Omaha, Warren Buffett, has praised index investing as a low-cost way for people to get into the market. So, is active investing dead?
More Records For No Income
Added On - 5/26/2017 11:02:51 AM
Another week, and yet more records are smashed for non-income-producing assets, like two-digit number plates and US artworks.
After Its Price Dip, Is Telstra Now Good Value?
Added On - 5/25/2017 11:26:49 AM
With TLS's share price down around 20 percent over the past year, we decided to assess its value.
Should Investors Be Alarmed By The Bank Levy?
Added On - 5/25/2017 11:25:25 AM
The Federal Government's proposed bank levy has opened up a battlefront with the major banks, not to mention shareholders and bank staff. On face value, the 6 basis point levy seems relatively benign. But we think it will increase investment risk in an already overvalued sector.
Video - Bank Reporting
Added On - 5/24/2017 9:58:59 AM
In this video insight Stuart Jackson discusses the first half results of the major banks and the five main components of a bank's result.
The Art Of Positioning The Truth
Added On - 5/23/2017 11:41:42 AM
Investing is never easy at the best of times. Making sense of complex financial accounts takes both time and the aptitude to anticipate the numerous ways in which CFOs can position their businesses in the most favourable light.
Why We Like Speedcast
Added On - 5/23/2017 11:39:22 AM
SpeedCast International (ASX: SDA) is a company that doesn't grab many headlines, but we think it's worth watching.
Using Aggregators To Cut Through The Noise
Added On - 5/19/2017 10:02:33 AM
How might an investor cut through the noise? One strategy is to use news aggregator applications.
Cyber Attacks Show The Dark Side Of Bitcoin
Added On - 5/19/2017 9:59:49 AM
Most of us probably paid little attention to Bitcoin, and other crypto-currencies, until the recent cyber attack that hit some of the world's largest companies and government bodies such as Britain's National Health Service. Clearly, it's time to take notice.
Where For Art Thou Retailer?
Added On - 5/18/2017 10:40:01 AM
Are the structural challenges being faced by retailers continuing? Or are they now increasing? The challenges are now only increasing with the structural pressures from the immigration of large and well-resourced foreign discounters such as Zara, Uniqlo, Aldi, H&M and Amazon, meeting the twin cyclical pressures from an end to the construction boom and rising interest rates.
Video - How Amazon's Progress Is Important
Added On - 5/17/2017 10:43:14 AM
In this week's video insight Portfolio Manager Chris Demasi discusses Amazon and how its progress around the world and outside of retail is important for global investors.
This Time Is Really Different
Added On - 5/17/2017 10:41:36 AM
I cannot say whether the market will correct anytime soon. I do know however when a genius value investor throws in the towel, hangs up the tools or takes his bat and ball home, joins the bullish bandwagon, eight years after it commenced, its worth being cautious.
The US Now Has More Indices Than Listed Stocks
Added On - 5/16/2017 11:28:47 AM
Here's a surprising - and possibly alarming - fact. According to Bloomberg, the US now has nearly 5,500 market indices.
Where Amazon Will Hurt Retailers The Most
Added On - 5/15/2017 10:07:41 AM
We've been cautious on the retail space for some time - particularly retailers at risk of being hurt by Amazon's entry into Australia. Two of the companies we believe will be most affected are the electronic retailers, JB Hi-Fi and Harvey Norman.
China's Shadow Banking System Time Bomb
Added On - 5/12/2017 10:42:42 AM
While western stock markets have continued to enjoy euphoric conditions over the past month, the Shanghai Composite Index has gone the other way, declining 7 per cent. One key reason is the ballooning problem associated with Wealth Management Products (WMPs).
A Case Study On Destroying Shareholder Value
Added On - 5/11/2017 11:22:08 AM
Synchronoss Tech was a short position in our Montaka strategy that generated our investors a 70 percent return on investment in four months. It is also a prime example of why shareholders and investors must conduct their affairs with a healthy dose of scepticism.
Suddenly, Cash Has Rarity Value
Added On - 5/11/2017 11:19:46 AM
When should you hold more cash? The simple answer is: when fewer people are holding it. Because that's when it's most valuable. And, right now, after the stampede to other asset classes, cash is more valuable than it has been for some time.
Video - The Roll Over
Added On - 5/10/2017 11:27:10 AM
In this week's video insight Roger discusses the outlook for banks, retailers and resource companies. He also discusses the recent performance of Montgomery's domestic and global funds.
How To Use Shrinkage To Fine-Tune Your Forecasts
Added On - 5/9/2017 12:12:10 PM
Shrinkage asks us to consider how much confidence we have in our ability to forecast that change in margins, and (and this is the important bit) to adjust our forecasts to account for that.
Learnings From Attending An Equity Conference
Added On - 5/8/2017 10:59:55 AM
Each year brings forth a new batch of invitations to equity and investor conferences. At first glance, the conferences seem informative. But is there really any value in attending?
Obamacare Is One Step Closer To Repeal
Added On - 5/8/2017 10:56:43 AM
The repeal and replacement of Obamacare was one of Donald Trump's key election promises. Now that the Republicans have passed a revised healthcare bill, that promise is one step closer to reality.
Lessons From Murray Goulburn
Added On - 5/5/2017 11:31:32 AM
Murray Goulburn shows what can happen if management is not shareholder oriented.
Is Woolies Trading At A Discount?
Added On - 5/4/2017 11:31:46 AM
In our continued search for places to deploy capital, we recently reviewed the listed supermarkets and asked: 'Are supermarkets trading at a discount to intrinsic value?'
Are Your Old Economy Investments Yet To Be Disrupted?
Added On - 5/2/2017 11:13:30 AM
In this video insight CEO David Buckland discusses the extraordinary network platform businesses owned by Montgomery Global, including Playtech, Alibaba, Tencent, Apple and Facebook.
Investors In Index Funds Should Be Very Cautious
Added On - 4/28/2017 10:09:36 AM
Investors who think ETFs give them safety through diversification are no more protected than those who invested in mortgage backed collateralized debt obligations (CDOs) before the GFC.
Video - Business Quality
Added On - 4/27/2017 11:17:30 AM
Tim Kelley discusses business quality - what it is, why we focus on it, and what it means for long-term investment returns.
Low Interests Are Not An Aberration
Added On - 4/26/2017 11:33:04 AM
If you're a baby-boomer, you grew up with annual interest rates in the low teens. If you're a millennial, interest rates above five percent are difficult to imagine. But what is the normal state of play, and what can we expect interest rates to do in the foreseeable future?
Why Have Sirtex Shares Been Dumped?
Added On - 4/26/2017 11:32:16 AM
Over the weekend, the results were released of a trial comparing the efficacy of two treatments for late stage liver cancer. The treatments were SIRT, pioneered by Australian biotech, Sirtex, versus Sorafenib. The results were generally positive for SIRT. So why has the market responded so harshly?
What Can We Make Of Nine's Resurgence?
Added On - 4/24/2017 12:32:01 PM
Warren Buffett once referred to Mr Market as a 'drunken psycho', lurching one way and then the other. So it would be interesting to know what he would make of the bounce in the value of Nine Entertainment. Despite facing crippling headwinds, Nine's share price has jumped around 50 percent since October.
Why The Trend Can (Often) Be Your Friend
Added On - 4/24/2017 12:30:59 PM
Even if you're a long-term fundamental investor - like us at Montgomery Investment Management - it can pay to use technical analysis when evaluating the future prospects of a business. Because, it seems, there is some truth to the old adage that 'the trend is your friend'.
How Low Can The Iron Ore Price Go?
Added On - 4/20/2017 11:09:33 AM
A quick look at the iron ore price chart is enough to tell you that all is not well. After hitting a multi-year high of US$94.86 in February, the spot price of benchmark 62% fines fell over 4% on Tuesday to US$63.20. And with more supply soon to come on stream, this rout could have further to run.
Telstra & TPG, Who Will Win Share?
Added On - 4/18/2017 11:09:43 AM
TPG has confirmed its intention to build a fourth mobile network in Australia with its successful A$1.26bn acquisition of two 10MHz spectrum licenses in the most recent Government tender.
Using Short-Side Research To Identify Great Businesses
Added On - 4/13/2017 2:47:03 PM
The Montgomery Global Fund is one of Australia's leading global equity funds. Since inception in July 2015, the fund has turned $100 into $116. A unique feature is that our global equity fund has actively benefited from short-side research.
Could Automation Eat Your Job?
Added On - 4/13/2017 10:45:58 AM
As if there's not enough to worry about these days. Now, a report by PwC estimates that automation will put at risk a large percentage of jobs in developed countries within 20 years.
Video - The Demise Of Nine
Added On - 4/12/2017 11:39:29 AM
Since 2015, Nine's television revenues have been declining. In an age of Netflix, Apple TV and YouTube, consumers face a much wider choice of video on demand than they ever have before. And this means free-to-air television audiences in Australia are declining - by around 5% per annum. Is Nine's current stock price of around $1.25 per share justified?
Improve Your Returns In One Simple Step
Added On - 4/12/2017 11:29:44 AM
If you invest your own money, and you're looking to improve your performance, here is one simple tip you should consider: measure your returns. This may sound like common sense, but it's remarkable how many of us are averse to critical reflection.
U.S. Retail Is Over-Stored
Added On - 4/11/2017 10:43:04 AM
Countless U.S. retailers are being pressured by the well-publicised impact of e-commerce. E-commerce giants such as Amazon have changed the psyche of the consumer and their approach to shopping.
After A Hefty Price Fall, Is IPH Now Good Value?
Added On - 4/10/2017 10:40:22 AM
IPH Limited (IPH) listed at $2.00 in late 2014 and soared to over $9.00 just one year later. The market clearly liked the story. But for the past 12 months, the share price has steadily declined and IPH now trades around $5.00. After this sort of a fall, we had a good look at the business to see if IPH had become a bargain.
How Can A Business Gain A Competitive Advantage?
Added On - 4/7/2017 11:11:41 AM
As value investors, we are always on the lookout for businesses with a competitive advantage. Having a competitive advantage can give a business an edge over rivals and an ability to generate greater value for shareholders. But what do we really mean by competitive advantage, and how does it come about?
Does Telstra Have Their Eye On Vita's Stores?
Added On - 4/6/2017 11:42:47 AM
What a week it's been for Vita Group (VTG), which operates over 100 Telstra stores. On 4 April, Fairfax published an article referring to a 'leaked' Telstra draft document that said it is considering taking back high performing stores from licensees. VTG's share price promptly plummeted. After VTG rebutted the leak, its share price rebounded. So, who should we believe?
Is Money Laundering Distorting Property Prices?
Added On - 4/6/2017 11:42:02 AM
Another cause of our overheated property market has come to light in a recent report by Transparency International (the global anti-corruption watchdog). Based on their findings, it appears that money laundering by foreign 'investors' is at least partly to blame.
Video - Resources, Retail & Banking Outlook
Added On - 4/5/2017 12:04:12 PM
Roger Montgomery looks at the outlook for the resources, retail and banking sectors.
Five Rules To Win A Price War
Added On - 4/4/2017 10:39:44 AM
With Amazon set to enter the Australian market later this year, many of Australia's leading retailers are gearing up for the fight of their lives. We think they would do well to take note of recent analysis by MIT Sloan School of Management, which identifies five rules for management to follow to maximise their chances of success.
Watch Out Retailers: Here Comes Amazon
Added On - 4/3/2017 11:03:27 AM
Amazon is about to hit our shores, and its arrival is bound to be as disruptive here as it has been in the U.S. But which retailers should be most worried? And is there anything they can do to protect market share in the face of this retail juggernaut?
NYSE Margin Debt Hits A Record
Added On - 4/3/2017 10:55:53 AM
NYSE margin debt levels hit a record in February, reaching $528 billion. For context this is 39% above the 2007 peak in NYSE margin debt. So what are the implications of record margin debt and does it hold any predictive power?
Brace For Increased Bank Capital Requirements
Added On - 3/31/2017 10:33:59 AM
One of the drivers behind the recent bank rally has been a perception we are over the worst of the risks around increasing regulatory capital requirements. But are we? A report card from the Basel Committee on Banking Supervision indicates this view might be a little premature. If so, there could be ramifications for banks and property investors alike.
Can Coles & Woolies Fight The Aldi Onslaught?
Added On - 3/30/2017 11:12:44 AM
So far, Aldi has had a relatively small impact on Coles and Woolworths. But that is set to change as the German retailer continues its expansion strategy.
5 Issues In The Way Of Trump Tax Reform
Added On - 3/30/2017 11:10:04 AM
Tax reform is one of the Trump administration's key policy ambitions. But realising that ambition may not be so easy - a number of key issues could stand in the way.
Could New Lending Restrictions Backfire?
Added On - 3/28/2017 10:10:27 AM
The law of unintended consequences states that actions - particularly by government - can have adverse effects that are unanticipated or unintended. This law could soon play out as a result of lending restrictions placed on the major banks by the Australian Prudential Regulation Authority (APRA).
Why We Think BWX Is Worth Watching
Added On - 3/24/2017 11:05:04 AM
A little-known company we hold is BWX Limited. This small Melbourne-based company owns a range of skin and hair care brands.
What Now For Traditional Media?
Added On - 3/24/2017 11:01:44 AM
A couple of decades ago, print media was critical to reaching an audience; now it's relevance has significantly declined. And this switch in advertising spending from traditional media to digital media shows no sign of letting up.
Rising SKEW Means That Tail Risk Is On The Rise
Added On - 3/23/2017 10:32:48 AM
Most of us know about the VIX, which gives an insight into investor sentiment and expected levels of market volatility. But we seldom hear about the SKEW, which is an index derived from the price of S&P 500 tail risk.
Video - How To Generate Stock Ideas
Added On - 3/22/2017 10:27:32 AM
At Montgomery, we strictly adhere to a value philosophy with the goal of purchasing businesses with defensible economic moats at cheap prices. So how does the Montgomery team think about finding attractive investment opportunities?
How The Pie Is Being Sliced
Added On - 3/21/2017 10:34:45 AM
In the recent US elections, Donald Trump successfully harnessed strong voter discontent about rising inequality. He had a point. Recent data show an ever widening gap between the haves and have nots, and falling confidence in the political class.
Resmed's AirFit Masks Appear To Be Boosting Share
Added On - 3/21/2017 10:33:13 AM
Last November, Resmed launched its new range of AirFit masks. This led us to wonder if the uptick in growth in Resmed's second quarter results was due to the new masks. Early indications are that the masks have been well received, and are increasing the company's market share.
 

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