G'day

If you're pressed for time, this week's Fodder should be right up your alley - it's full of short but powerful pieces. In a pithy 500 words, Tim Farrelly debunks the myth that forward PEs can be used to assess market valuations. And in a short 7-minute video (with transcript if you prefer to read), Prof Jack Gray reflects on lifecycle investing in the Australian context. We also offer you a fascinating paper from Bank of International Settlements looking at the rich centuries-long history of 'good' sovereigns defaulting (or coming very close) and thinking the unthinkable - a world without risk free assets. 

That theme is also picked up by Professor Aman Rajan in his excellent white paper on investing in a debt-fuelled world. On which note - don't overlook the presentation that won the Delegates' Pick award at our 2013 Conference, which asked the question 'Does lending to debtors make sense for bond investors?'.
All the best for the coming week - Graham
P.S. Set aside some time to review the Conference 2013 Resources Kit (all the presentations, videos, podcasts, and papers from the three-day program).

It's not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for. - Robert Kiyosaki

Perspectives - latest

Forward PEs look attractive?
"Forward PEs look attractive" is often offered as an astute observation. In fact, it's almost a truism. But does using forward PEs to assess market valuations actually work?
Tim Farrelly, farrelly's | Opinion

Lifecycle investing - the Australian context
Recorded exclusively for PortfolioConstruction Forum, Prof. Jack Gray explains why lifecycle investing concepts needs adaptation for the Australian context.
Prof Jack Gray, UTS | Opinion

Does lending to debtors make sense for bond investors?
Net foreign assets, a measure of a country's net wealth, can reliably predict future defaults - allocating to countries with net wealth not net debt leads to superior returns.
Andy Seaman, Stratton Street Capital | Resources
* Awarded Delegates' Pick Award 2013 for best DDF Presentation *

A world without risk free assets?
The history of good sovereigns defaulting is a rich one, going back to the Middle Ages and Renaissance period. What could replace US Treasuries as the risk free asset?
Angela Ashton, PortfolioConstruction Forum | Research

Investing in a debt-fuelled world
Deleveraging will leave a lasting impact - and meeting the challenges it presents investors will be critical to everyone operating in the new financial landscape.
Prof Amin Rajan, Create Research | White paper

Perspectives - recently

It really is different this time
I'm quite used to being alone and against the consensus. I believe the next decade is going to see the strongest level of global economic growth anyone today has ever seen.
Jonathan Pain, The Pain Report| Opinion

Insights from Jackson's Hole
The recent Jackson Hole Federal Reserve Conference was my 10th or 11th. I want to share some insights including a fascinating disconnect between policymakers and the markets.
Hon. Dr Pippa Malmgren, Principalis Asset Management | Opinion | 3 comments

Don't fight the Fed
So it was, after all, a storm in a teacup. Financial markets have been going through a series of "taper tantrums” since Bernanke first mentioned the idea of tapering.
Anatole Kaletsky, GaveKal | Opinion

All routes lead to the same exit
The Fed has to think of a new strategy to reopen availability of credit - and that is a problem. At present, all routes of Bernanke's QE maze lead to the same exit - deflation.
Nick Bullman, CheckRisk | Opinion

Tailoring exposures for the Australian investor
Australians have sought offshore diversification for years. The next logical extension is to think more deeply about how to make offshore investments complement local ones.
Michael Blayney, Perpetual | Resources
* Awarded Editor's Pick Award 2013 for best DDF Research Paper *