Oliver's Insights
Oliver's Insights
Australian shares lagging Since the March 2009 Global Financial Crisis (GFC) low in share markets, Australian shares are up 65%, compared to a 145% gain in global shares in local currency terms and a 210% gain in US shares. In fact, both global and US shares reached record highs last year and still remain above...Read More
The spike in volatility After a period of relative calm over 2012-2014 share market volatility has spiked over the last year as various worries about the global growth outlook intensified. With this renewed volatility a focus on risk in investing and a desire for safety has naturally come. But what is volatility? What drives it?...Read More
Introduction After hitting an almost seven year low of $US0.6827 in January the Australian dollar has rebounded by 12% or so hitting a high of $US0.7680. The rebound begs the question as to what is driving it and more fundamentally whether the 38% decline from its 2011 high against the US dollar has now run...Read More
China in transition from manufacturing to services
March 23, 2016
Uncertainty regarding China has been a factor behind global growth worries and share market volatility since mid last year. Put simply the combination of a reversal of gains in Chinese shares, a fall in the Renminbi and uncertainty about the intentions of Chinese policy makers at a time of slowing Chinese growth have fanned fears...Read More
To modify Benjamin Franklin, it seems that in Australia nothing can be said to be certain, except death, taxes and endless debate about property prices. Why is it so unaffordable? Are foreigners to blame? Is it a good investment? Is negative gearing the problem? Are property prices about to crash? Worries about a property crash...Read More
The Lucky Country holding up pretty well
March 2, 2016
Introduction The Australian economy performed better than expected in 2015. The mining boom ended around four years ago and yet the Australian economy has still not fallen into the recession that many feared, with non-mining activity helping the economy continue to grow. In fact at 3% GDP growth through 2015, Australian was a star performed...Read More
Global politics in the year of the monkey
February 25, 2016
The US election – populists versus the establishment First some facts. The election year, or Year 4 in the 4-year US presidential cycle, is normally an ok year for US shares. However, when it is in the eighth year of a presidency it has been poor with an average loss of -3.4% since 1927, albeit...Read More
There’s a bear in there – what drives mild versus deep bear markets
February 18, 2016
Introduction News that the Australian share market as measured by the ASX 200 index briefly slipped into bear market territory last week as defined by a 20% decline from the most recent high – which in this case was April last year – has generated much coverage and interest and understandable concern. This note takes...Read More
The malaise affecting equity markets and risk assets generally has shown no let up with Australian shares slipping into bear market territory yesterday (defined as a 20% or greater decline from the most recent high). In some ways it is reminiscent of 2008 with tightening credit markets, bank shares under pressure and worries central banks...Read More
The plunging oil price – why and what it means
January 28, 2016
Our view on the financial market turmoil has been covered in the last two Oliver’s Insights – except to add that central banks are now sounding more dovish. This started with the ECB which is now expected to ease at its March meeting and is also evident from the Fed which last night was less...Read More