- Wholesale Investments
Weekend Reading | “Below Expectations”
30 Jul 2021 |
By Max Pacella
READ TIME 5 mins
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Insights
The latest market insights from our strategists covering equity
and fixed income markets, and a global macro overview.
Max Pacella
Investment Analyst
Max started at Mason Stevens in 2020, working with investment managers to provide insights & investment opportunities for client portfolios.
In his role as Investment Analyst, Max is involved with counterparty relationships between Mason Stevens and investment managers, multi-asset mandates and portfolio review/construction.
Max is completing an undergraduate study of Economics, Commercial Law, Financial Economics at the University of Sydney. He has a license for providing General Advice in Securities and Managed Investments, as well as a license for providing Personal Advice in Foreign Exchange (RG146).
Insights by this Author
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Welcome back to our weekend reading, It’s been a week of economic releases, earnings expectations and watching the COVID numbers through the cracks in our fingers. The Biden Administration is surely pulling their hair out when a 6.5% annualised rate...
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The “re-opening trade”, or the strategy of investing in stocks which are widely held to be beneficiaries of an economic re-opening after the COVID-19 pandemic, has been in play largely since late Q2 2020. Predicated on a rebound of earnings...
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Afterpay (APT: ASX) is one of the true ‘disruptor’ stories of the last decade, an innovative business model taking market share from traditional consumer credit lenders and creating an ASX 20 company in the process. If we talk in terms...
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- Wholesale Investments
Weekend Reading | “Master the Disaster”
23 Jul 2021 |
By Max Pacella
READ TIME 5 mins
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Welcome back to our weekend reading, The view out any office window in Sydney is quite grim at the moment, desolate streets where only the trams trundle along like particularly elongated wildebeests. With this thought in mind on Thursday, I...
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- Macro & Markets
The Story of the Taper Tantrum of 2013
23 Jul 2021 |
By Max Pacella
READ TIME 5 mins
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A key reason to draw parallels between our current markets and the situation immediately following the GFC is a term that has been floating around financial media over the last few months of a “taper tantrum”, in relation to if/when...
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- Wholesale Investments
Weekend Reading | “Déjà Vu”
16 Jul 2021 |
By Max Pacella
READ TIME 4 mins
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Welcome back to Weekend Reading. Did you know that delta is the ratio that compares the change in price of an option, to that of a change in the underlying stock? So, if there are 29 people infectious in the...
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- Macro & Markets
Go with the flow – Superfunds
16 Jul 2021 |
By Max Pacella
READ TIME 4 mins
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Capital flows - the movement of money into a particular asset class or market segment for the purpose of investment - are the impulse of demand, where increasing/decreasing levels of demand for a constant level of an asset will naturally...
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- Macro & Markets
Flying High – Sydney Airport Bid
13 Jul 2021 |
By Max Pacella
READ TIME 4 mins
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Last week Sydney Airport, Australia’s largest airport and one of Australia’s most well-supported listed infrastructure holdings, received an unsolicited bid to take the asset private. As an asset that is held in both an equity and debt form by many...
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- Wholesale Investments
Weekend Reading | “Is there anybody out there?”
09 Jul 2021 |
By Max Pacella
READ TIME 5 mins
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For those of you in Sydney currently enduring “The Melbourne Experience” (which possibly would be paired well with the Jimi Hendrix Experience), we hope you are staying safe and vigilant. It has certainly been a week of ups and downs...
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“Is this the next housing bubble?”, “Is Bitcoin a bubble?”, “Irrational exuberance”. Each time a particular asset’s price grows to potentially sensational valuations, you begin to hear phrases like the above. Particularly since the Global Financial Crisis of 2007-2008, bubbles...
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“Let me be surrounded by luxury, I can do without the necessities!” In recent notes we’ve touched on the market outlook that people are getting wealthier, not disregarding the incentives by governments to spend through various stimulus measures, and that...
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If you want an exercise in futility, try Googling “investing in exchanges” and try to find any commentary on buying a stock exchange, rather than just “how to buy stocks on an exchange”’. You could of course try, “why buy...
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In extreme situations, humanity relies on three immediate “basic needs”: • shelter, • clothing, and • food. With the continual growth of our population across the globe - coupled with concerns about the impact on our agricultural land from over-farming...
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- Wholesale Investments
Weekend Reading | “Totally Not a Lockdown”
25 Jun 2021 |
By Max Pacella
READ TIME 4 mins
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Welcome back to Weekend Reading. Dedicated friends and readers, please forgive the relative brevity of this edition.It turns out a “work from home order” being announced as we work through listing proceedings for one of our private equity holdings and...
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- Fixed Income
Risk-Off Series: Get Long (Duration)
25 Jun 2021 |
By Max Pacella
READ TIME 5 mins
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What may be evident at this point in our Risk-Off series is that for each opportunity we have to make a risk management decision, there is often a corresponding opportunity to make gains within our portfolios. Touching on risk management...
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- Multi-Asset
Risk-Off Series: Tail Risk and Alternative ETFs
22 Jun 2021 |
By Max Pacella
READ TIME 5 mins
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As Jesse mentioned in the introductory note to this risk-off series, investors are constantly faced with the possibility of the extreme, be it to the upside or downside. During 2020 we were faced with both circumstances, with the global pandemic...
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- Wholesale Investments
Weekend Reading | “Return of the Hawks”
18 Jun 2021 |
By Max Pacella
READ TIME 5 mins
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Welcome back to Weekend Reading.
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- Equities
Risk-Off Series: Investing in Long/Short Equities
16 Jun 2021 |
By Max Pacella
READ TIME 4 mins
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In the multitude of notes we’ve written about equities, most will make a basic assumption that we are ‘long’, i.e. we are buying the security or fund with the view that the market is going up. But what if we...
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- Wholesale Investments
Weekend Reading | “Brave New World”
11 Jun 2021 |
By Max Pacella
READ TIME 5 mins
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Welcome back to our weekend reading, One thing that might strike you about the common parlance around Bitcoin is how avidly it uses different modes of transportation; “the Bitcoin train is leaving the station”, “Bitcoin is on a rocket to...
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Resources (‘Materials’), making up ~16.75% of the ASX (Bloomberg), has seen a particularly successful run over the last year, outperforming the ASX 200 index by just over 10%. The sector has historically been a very ‘boom or bust’ area of...
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- Macro & Markets
An Introduction to Volatility
08 Jun 2021 |
By Max Pacella
READ TIME 6 mins
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To expect a market pullback is to expect volatility. By its nature, volatility is inherent in a free market – prices are marked every second and millions of individual decisions along with it. Particularly since last year’s market collapse, volatility...
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- Wholesale Investments
Weekend Reading | “Everyone’s Gone Mental”
04 Jun 2021 |
By Max Pacella
READ TIME 5 mins
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Welcome back to Weekend Reading. You would be forgiven for thinking that some of the stories out this week are spoofs, parodies or hyperbole. Sadly not – it seems the market is occasionally intent on becoming a caricature of itself,...
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In our Healthcare note a few weeks ago, we outlined the merits of investing into the sector from the point of view that the world is getting wealthier and older. As we get older, we spend longer ‘living with disability’...
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Have you ever asked yourself why a certain company does not pay dividends, even when they are extremely cashflow positive? Furthermore; if a company whose success, share price growth and stratospheric valuation is based on accelerating earnings growth, what does...
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All of these statements confirm one simple idea, that the momentum of markets is a critical factor to consider in the positioning of your portfolio. If you want the quintessence of momentum trading in one sentiment however, I would go...
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- Wholesale Investments
Weekend Reading | “Feeling Green”
28 May 2021 |
By Max Pacella
READ TIME 4 mins
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Welcome back to Weekend Reading. The market has taken a breather after throwing its toys out of the pram last week, with volatility significantly subdued and most global markets slowly drifting up. Given that I just said it’s been a...
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- Wholesale Investments
Weekend Reading | “Mysterious Dealings”
21 May 2021 |
By Max Pacella
READ TIME 5 mins
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Welcome back to Weekend Reading. A shorter note this week, because who ever said that Friday’s are less busy must have a sick sense of humour. Volatility has continued throughout this week, the VIX is getting a workout after a...
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Private equity (PE) is often one of the most opaque and inaccessible investments, frustrated by three main issues; transparency, accessibility and liquidity. It is often difficult for an investor to pick the winners out of a vast majority of private...
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The investment theme of Healthcare may carry some of the strongest emotional links in capital markets – it does not get much more sentiment-driven than considering our own quality of life and mortality. Today we will examine the global healthcare...
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- Wholesale Investments
Weekend Reading | “Volatile Materials”
14 May 2021 |
By Max Pacella
READ TIME 5 mins
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Welcome back to Weekend Reading. “Volatility” has been the word of the week, with markets indiscriminately crashing like a learner driver borrowing their dad’s Porsche. This has been hand-in-hand with ongoing Fedspeak around inflation, with the market seemingly unconvinced by...
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Funds have been trading on listed exchanges since 1990, beginning life as ‘index trackers’ which sought to replicate the movement of the underlying index. From a single ETF listed on the Toronto Stock Exchange, there are now over 2,200 ETFs...
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With Afterpay dipping below $100 for the first time since December 2020, commentary has re-entered the market around the value of Buy Now, Pay Later (BNPL) companies in general and the regulatory risks for this disruptive business model. Today we...
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- Wholesale Investments
Weekend Reading | “Breaking Apart”
07 May 2021 |
By Max Pacella
READ TIME 4 mins
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Welcome back to Weekend Reading. Some market darlings have shown signs of breaking apart over the last few days, from the news of the Gates’ divorce, to Coinbase’s stock price, to Sydney’s formerly COVID-free lifestyle. Whether or not this represents...
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The relationship between precious metals and inflation has been shown empirically in the past, including gold and the ‘white metals’, being silver, platinum and palladium. These are also “real assets”, physical pieces of ‘something’ which we believe to have some...
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- Equities
Positive Energy Part 3: Geothermal and Nuclear
04 May 2021 |
By Max Pacella
READ TIME 6 mins
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Concluding our green energy series, beginning with solar and discussing wind & water last week, today we examine the market, science and investible opportunities across geothermal power and nuclear energy as they exist today.
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- Wholesale Investments
Weekend Reading | “All The Money”
30 Apr 2021 |
By Max Pacella
READ TIME 5 mins
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Welcome back to our weekend reading, We are in the midst of a largely positive U.S reporting season, with over 30 of the largest companies reporting this week alone (not counting this evening’s results). More on that later. There may...
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As of late, the terms ‘short squeeze’, ‘call options’ and ‘gamma’ are ingrained into the minds of market observers after the GameStop saga. There are lessons to be learned from squeezes, including what signals them and what market they thrive...
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- Equities
Positive Energy Part 2: Wind and Water
27 Apr 2021 |
By Max Pacella
READ TIME 4 mins
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Continuing our series on renewable energy investing, today we look at the opportunities across wind power and hydroelectricity.
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- Wholesale Investments
Weekend Reading | “Cutting and Collapsing”
23 Apr 2021 |
By Max Pacella
READ TIME 6 mins
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Welcome back to our weekend reading. A lot of commentary throughout the market that we’re seeing “signs of a collapse”.What’s probably most interesting is what we’re not seeing commentary on; very few articles on NFTs lately, there are relatively few...
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Gold. That’s a word that hasn’t been in popular favour for a few months. After reaching record levels and then subsequently shedding almost 20% last year, gold has represented a source of confusion and division within the market. Today we...
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We’ve spent time discussing electric vehicles (EV) and the investable opportunities of their supply chain – but today we look to the technology which seeks to solve one of the largest problems our society faces today: power. Battery technology has...
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- Wholesale Investments
Weekend Reading | “Just Keep Throwing Money At It”
16 Apr 2021 |
By Max Pacella
READ TIME 5 mins
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Welcome back to our weekend reading,We might as well have called this one, “So how about that Coinbase, eh?” A veritable landslide of headlines from around the markets, with the major trends of the week being ongoing economic stimulus and...
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Continuing on from our EV note from last week, today examine investible opportunities across the entire supply chain – both as a focus on EV and a template to understand investments into other high tech themes. Knowing what you own,...
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As a society we are witnessing a paradigm shift towards de-carbonisation, moving towards an increased usage on renewable energy sources and improving technologies across solar, wind, hydroelectric, geothermal and nuclear power. In the first of a three part note on...
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- Wholesale Investments
Weekend Reading | “Boom from Bust”
09 Apr 2021 |
By Max Pacella
READ TIME 5 mins
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Welcome back to our weekend reading. A short week after the Easter Long Weekend, though no less filled with interesting stories. We’ve seen news coming out of global investment banks regarding Archegos, speculation and declarations about Bitcoin, Chinese bank loan...
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After being a minority player in the auto industry for over 100 years, electric vehicles look set to re-enter the global stage as a leading alternative to combustion engines. As governments around the world look to cease the sale of...
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As we close out the first quarter for CY2021 and a flurry of economic updates enter our inboxes, now seems like an appropriate time to take a closer look at the business cycle and its relationship to markets and the...
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When considering the domestic equity exposure in a portfolio, one important consideration is what market capitalisation you are investing into. Much like different nations of varying economic size, different sizes of companies within the same economy offer different investment characteristics....
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- Wholesale Investments
Weekend Reading | “Running of the Bulls”
26 Mar 2021 |
By Max Pacella
READ TIME 6 mins
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Welcome back to our weekend reading,Some distinctly bullish news out this week, primarily focussed on continued U.S stimulus and cryptocurrency news sparking further rallies in everyone’s favourite form of monopoly money. Despite this, there are some points to cover off,...
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Australian investors are all-too-familiar with property; owning anything from a piece of land to a newsagency is part of the great Australian dream. But when it comes to performance over the last year, and what economic sentiment you are expressing...
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Infrastructure as an asset class seems to offer one solution to the ‘inflation hedge’ many investors are seeking in this current environment. Despite this, many investors have little to no allocation in the sector due to lumping it in with...
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- Wholesale Investments
Weekend Reading | “Schoolyard Antics”
19 Mar 2021 |
By Max Pacella
READ TIME 6 mins
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Welcome back to our weekend reading, This week saw world-moving economic announcements and global dissonance around vaccines, which were treated in equal weighting by the news cycle to two world leaders slinging playground insults and Elon Musk delivering the best...
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- Macro & Markets
Exploring Current Market Psychology
18 Mar 2021 |
By Max Pacella
READ TIME 6 mins
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Like a high school essay, let’s outline a thesis statement at the very beginning of this note: Anybody with the conviction, the capital and the aptitude should be able to access and participate in financial markets. Furthermore, investors should always...
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Space, the final frontier. Although I am more of a Star Trek -Next Generation man, the words of Captain James T. Kirk have captivated human imagination since the 1960s, as an increasingly technological world looked to the stars for new...
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In July this year, the Communist Party of China (CCP) will commemorate its 100th anniversary – and considering the global superpower is poised as one of world’s most robust economies after the pandemic, we can expect to see a party...
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- Wholesale Investments
Weekend Reading | “What Goes Up”
12 Mar 2021 |
By Max Pacella
READ TIME 6 mins
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Welcome back to our weekend reading.There are no middling stories anymore – either everything is going up, or else everything must come down. This week was a litany of rallies, collapses, new records and slumping potential. Like a frustrated parent...
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For any multi-asset portfolio, the first steps for most investors will be their asset allocation decisions.What are my inflation expectations? How long is my investment objective? How much capital will be exposed to equities? What room does that leave for...
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- Wholesale Investments
Weekend Reading | “A Series of Blow-Ups”
05 Mar 2021 |
By Max Pacella
READ TIME 5 mins
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Welcome back to our weekend reading.A quieter week this week, littered with a lot of interesting stories that unfortunately mean we’ll need to harp on about Elon Musk and crypto again – don’t worry, I promise to make enough snarky...
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- Macro & Markets
Investing in Emerging Markets
04 Mar 2021 |
By Max Pacella
READ TIME 5 mins
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Emerging Markets (EM) have been a compelling investment case for the last few decades. This has been for a number of reasons; Modern portfolio theorists like EM because it represents a risk diversification tool, both geographic and sector, across equities...
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- Wholesale Investments
Weekend Reading | “The Roaring Tens”
26 Feb 2021 |
By Max Pacella
READ TIME 7 mins
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Welcome back to the Weekend Reading It’s been a turbulent week, as I write this our market is redder than an English backpacker after a day in the sun and news of rising 10Y bond yields have created some particularly...
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- Macro & Markets
Banks and the Search for Yield
26 Feb 2021 |
By Max Pacella
READ TIME 6 mins
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Now that the major bank results are sitting comfortably in our hindsight, and following on from our banks outlook earlier this month, today we’ll consider some further views from the street on bank stocks; both as a rotational play and...
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- Macro & Markets
A Guide to Performance Metrics
23 Feb 2021 |
By Max Pacella
READ TIME 5 mins
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When reviewing a portfolio or managed product, advisers and investors are inundated with a variety of performance metrics, some of which may be outside their field of expertise and therefore are ignored in favor of the historical performance. This is...
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- Wholesale Investments
Weekend Reading | “The Comeback”
19 Feb 2021 |
By Max Pacella
READ TIME 9 mins
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Welcome back to our weekend reading. This week has been a story of ‘coming back’, for better or for worse. As LL Cool J said in 1990, “don’t call it a comeback, I been here for years, rocking my peers...
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The equity market is the subject of a lot of polarization at the moment. In the minds of many vocal commentators, everything is either the next “big bull run”, or another sign of a bubble. Valuations are either stretched beyond...
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By the time you read this, the Hong Kong stock exchange will have re-opened after Lunar New Year, with Shanghai bourse remaining closed until 17 February. Global stock markets are subject to seasonal influences throughout the year, as the usual...
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- Wholesale Investments
Weekend Reading | “Here We Go Again”
12 Feb 2021 |
By Max Pacella
READ TIME 6 mins
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Welcome back to our weekend reading.Happy Lunar New Year to you all, may the Year of the Ox bring fortune, health and a continuing bull market if you’re long equities (an ox is a bit like a bull, right?)We first...
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Yesterday, Commonwealth Bank (CBA:ASX) was the first of our major banks to report 1H21 results, firing the starting gun on what will be several weeks of news coming out of the largest ASX sector. In light of this we thought...
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Investors do not always need to be economists. In fact, one of my favourite investors – Peter Lynch of Fidelity – is fond of saying, “If you spend 13 minutes on economics a year, you’ve wasted 10 minutes”. But despite...
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- Wholesale Investments
Weekend Reading | “The Big Squeeze”
05 Feb 2021 |
By Max Pacella
READ TIME 7 mins
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- Equities
Healthcare Sector Overview and Outlook
04 Feb 2021 |
By Max Pacella
READ TIME 5 mins
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It is undeniable that COVID-19’s impact upon our society and economy will be felt for decades to come. We are living amongst at an inflexion point in history, in which certain priorities have been brought into focus as the pandemic...
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- Equities
Exposure to Cryptocurrency Through Stocks
03 Feb 2021 |
By Max Pacella
READ TIME 4 mins
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Much like any other designated ‘financial services guy’ in a circle of friends, if I had a dollar for every time I have been asked about buying “cryptos”, I could probably afford one whole Bitcoin. Cryptocurrency has become the investors’...
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As we all unwind after this tumultuous year, many of us will turn to music to relax and celebrate. But do we ever stop and consider the growth and change in how we consume that media? Or even, how can...
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“Be a symbol of perfection,Be an object, be a cultTake their praise, take the collectionAs the multitudes exalt"Elton John, “It’s Tough To Be A God” Despite what we may read in the news of late, the world has become a...
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“Could we have kippers for breakfast,Mummy dear, mummy dear,They got to have ‘em in Texas,‘Cause everyone’s a millionaire”Supertramp, “Breakfast in America” Not chasing hot picks and waiting to ‘buy the dip’ is generally the sage advice that an experienced stock-picker...
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“I’m gonna keep on the runI’m gonna have me some funIf it costs me my very last dimeIf I wind up broke, oh wellI’ll always remember that I had a swingin’ time”Elvis Presley, “Viva Las Vegas” Now more than ever,...
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After falling victim to COVID-19 in Q2, spending on online advertising has posted a strong recovery moving towards 2021. Today we follow this recovery and consider if we can use where this advertising spending is going, between regions and sectors,...
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“Oh Superman where are you now? When everything's gone wrong somehow, The men of steel, the men of power Are losing control by the hour.” Genesis, “Land of Confusion” “So, what happens to Company X if China and the U.S....
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- Macro & Markets
Generational Wealth Transfer
06 Nov 2020 |
By Max Pacella
READ TIME 5 mins
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“And as he hung up the phone it occurred to me He’d grown up just like me, My boy was just like me” Harry Chapin, “Cat’s in the Cradle” One of the largest transferrals of wealth in history will occur...
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“Don’t care if my liver is hanging by a thread, Don’t care if my doctor says I ought to be dead, When my ugly big car won’t climb this hill I’ll write a suicide note on a hundred-dollar bill.” Dire...
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- Equities
Ant Group – The Biggest IPO in History
29 Oct 2020 |
By Max Pacella
READ TIME 7 mins
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“Today’s financial system is the legacy of the Industrial Age – We must set up a new one for the next generation and young people. We must reform the current system.” Jack Ma, Co-Founder of Alibaba on Ant Group In...
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“I’m on my way, I’m making it I’ve got to make it show, So much larger than life, I’m going to watch it growing” - Peter Gabriel, ‘Big Time’ To quote All the President’s Men (1976), “follow the money." Investors,...
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“Well he cast his eyes upon her And the trouble soon began And Leroy Brown learned a lesson 'Bout messin' with the wife of a jealous man.” - Jim Croce, “Bad, Bad, Leroy Brown” We live in the age of...
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“Money, so they say, Is the root of all evil today But if you ask for a raise it’s no surprise that they’re Giving none away.” Pink Floyd, “Money” The world is steadily gaining more wealth - with more money...
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“Get on a TWA to the promised land. Every woman, child and man Gets a Cadillac and a great big diamond ring. Don't you know you're riding with the king?” Eric Clapton, B.B. King (2000) The adage that ‘cash is...
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“But I'm all right Standing out here In the hot sun When I see the light I feel like More than just a number” Neil Young, Computer Age (1982) Apple can see your search history, Europe is protecting you, and...
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“A noble craft, but somehow a most melancholy! All noble things are touched with that.” ― Herman Melville, Moby-Dick Hunting for whales I’ve been asked before to keep an eye on video game companies, often an overlooked part of the market,...
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