Our regular
Forum Fodder email alerts Members to what's new on this site and
with our live professional development progams.
A sample of the Forum Fodder email is below.
Become a Member (with our
compliments) to receive Forum Fodder and access our multi-media learning
centre, PortfolioConstruction.com.au (this site) featuring:
- Resources Kits - videos and podcasts of the sessions and accompanying
papers from our live programs;
- Perspectives library - exclusive interviews, research papers, white
papers, opinion papers and special interest
subscription services from local and international investment
professionals and subject matter experts; and,
- CPD Campus - our online portfolio construction learning and
accreditation resource.
|
G'day
Stock markets around the world have tested or broken their all
time highs this year - but in this week's Fodder,
Dr Woody Brock explains this won't continue for the US equity market, at
least, as the five key drivers of what's actually been a 35-year bull market
mean revert. We were very fortunate to have had Dr
Brock in our office a few weeks back, to record a video to accompany his
research paper.
On a more optimistic note, Angela reviews the latest research
paper from Cliff Asness which looks at the decades-long debate about the size premium. Despite reports of its
demise, Asness shows
the small cap premium does still exist -provided you control for quality.
i.e. good stock picking is critical.
Still in the equities vein, there's also growing debate about P/E ratios - are they really elevated, or is this a new plateau?
Michael Kitces offers a solution -
think instead about its inverse, E/P (or "yield"). Not only is it a
far more intuitive concept for clients to grasp, it relies
on known data (past earnings) - and it's a strong predictor of long-term
returns.
Finally, we offer two perspectives on the Chinese equity bull market.
First, GaveKal's Louis-Vincent Gave argues that
China's leadership is extremely committed to ensuring the A- and H-share
party doesn't end (and how this could lead to index funds being
forced buyers of overvalued Chinese |
![](/obj/thumbnails/pcf_tn_GrahamRich_70x70.jpg) |
equities). Finally, JP
Morgan Asset Management's Tai Hui then offers
five further reasons for the rally in Chinese equities to continue in
the medium term.
All the best for some great
(equities) learning! - Graham
P.S. Check out our stellar speaker Faculty for
Symposium NZ 2015 (19/20 May). |
LATEST... |
![](/obj/thumbnails/pcf_tn_Woody-Brock_70x70.gif) |
Why the 1981-2015 equity bull market will not be
repeated
We are reminded daily that the US stock market has
achieved record highs between 2009 and today. But the
true bull market covers 35 years. What does an
understanding it tell us about the future? The answer
is: a lot.
Dr Woody Brock, SED
|
1.00 CE
|
Opinion
|
![](/obj/thumbnails/pcf_tn_research_70x70.jpg) |
Size matters, if you control your junk
In recent years, academics have been at war over whether
the small cap premium exists. This recent paper finds it
does - if you control for quality - and that it is
significant, and not time or market specific.
Angela Ashton, PortfolioConstruction Forum
|
2.00 CE
| Research
|
![](/obj/thumbnails/pcf_tn_MichaelKitces_70x70.gif) |
Should we focus on E/P instead?
Is it time to start thinking more about E/P ratios than
P/E ratios? After all, predicting that returns may be
higher or lower with a low (or high) earnings yield (and
a corresponding P/E ratio) really isn't so
controversial.
Michael Kitces, Pinnacle Advisory Group
| White
Paper
|
![](/obj/thumbnails/pcf_tn_Louis-Gave_70x70.jpg) |
No one likes to pay taxes
In maintaining "no taxation, no representation" deal
with its people, China's leadership appears to be going
down a path that would see index funds as forced buyers
of Chinese equities.
Louis-Vincent Gave, GaveKal
| Opinion |
![](/obj/thumbnails/pcf_tn_TaiHui_70x70.jpg) |
China equities: Is the rally sustainable?
A surprise rate cut in November 2014 and investor
expectations of further easing measures have triggered a
strong rally in China equities - both A shares, and in
the last three weeks, H shares. Can it last?
Tai Hui, JP Morgan Asset Management
| Opinion
|
![](/obj/thumbnails/pcf_tn_megaphone_70x70.gif) |
Member
comments
Lower for longer
I
agree with your thinking here Tim. I would add, that in
addition to a slower growth in workers we have higher
growth in retirees.
Aaron Minney
| Comment
Academy
Autumn Seminar - Key takeout
Avoiding investments in order not to support PETS
concerns may not be conducive to maximising returns on
investments, respecting client sensitivities to PETS can
be very important in building long term client
relationships. In my experiences with clients you really
do have to "meet them where they live". I also like
"clients don't care what you know until they know you
care".
Jenny Atkinson, Xentinel Financial Services
| Comment
Academy Autumn Seminar - Key takeout
PETS can affect portfolios in many ways and their
influences are very hard to quantify. While themes may
be easy to provide commentary on, assessing whether they
will materially impact on portfolios is the hard part.
Jonathan Costello, Australian Unity Personal Financial
Services
| Comment
|
RECENTLY... |
![](/obj/thumbnails/pcf_tn_JackGray_70x70.png) |
Risk, uncertainty and ignorance
Investors often face unknown and even unknowable states
of the world. How should we make investment decisions
under ignorance?
Jack Gray, UTS
|
Opinion
|
![](/obj/thumbnails/pcf_tn_Tim-Farrelly_70x70.jpg) |
Much lower interest rates for much longer
Low GDP growth, very low real rates, higher PEs and
valuation multiples - it's a new world. We all need to
get used to it. In particular, we should review client
spending plans.
Tim Farrelly, farrelly's
|
1 comment
|
Opinion
|
![](/obj/thumbnails/pcf_tn_Robert-Gay_70x70.jpg) |
Playing with matches
Fixed income markets seem to have gotten the correct
message, albeit perhaps for the wrong reasons –
short-term interest rates will stay low for a long time.
Dr Robert Gay, Fenwick Advisers
| Opinion
|
![](/obj/thumbnails/pcf_tn_Charles-Gave_70x70.jpg) |
A post-volatility world
These are words that I utter with the utmost caution -
this time, it really is different. Consider the
curious case of collapsing equity volatility.
Charles Gave, GaveKal
| Opinion |
![](/obj/thumbnails/pcf_tn_TaiHui_70x70.jpg) |
EM: Cyclically challenged, structurally adjusting,
secularly promising
EM equities and fixed income enjoyed a boom in the
2000s. Now after several years of relative
underperformance, EMs appear to be on the cusp of
stronger growth.
Tai Hui, JP Morgan Asset Management
| 1.00 CE
| White
Paper
|
![](/obj/thumbnails/pcf_tn_RobertMead_70x70.jpg) |
Australia’s New Neutral: Low interest rates for even
longer
Lower 'neutral' monetary policy rates across the
developed world will continue to serve as an important
anchor for the secular valuation of all asset classes.
Robert Mead, PIMCO
|
0.50 CE
|
Resources
*
Rated in the top 10 presentations by Markets Summit 2015
|
![](/obj/thumbnails/pcf_tn_megaphone_70x70.gif) |
Member
comments
Academy key takeout - Unknown unknowns
With regard to unknown unknowns (UUs), the payoffs are
hugely asymetric. Max downside 100%, unlimited upside.
Thus, notwithstanding the unknowns, take a large number
of small bets, and hope that some turn into very big
bets.
John Cameron, Black Swan Event Financial Planning
| Comment
Academy key takeout - uncertainty
Mistakenly we make decisions in the face of uncertainty
based on limited experience rather than make decisions
on information that we are uncomfortable with.
Brendan Irwin, Mercer Financial Advice
| Comment
|
PLUS...
|
![](/obj/thumbnails/pcf_tn_twitterbird_70x70.jpg) |
Keep up to
date - follow us @PortfolioForum
There's no need to wait until
our weekly Forum Fodder email to know what's new with PortfolioConstruction Forum.
Just follow us on Twitter to hear as soon
as we release new articles on
PortfolioConstruction.com.au and
registration opens for our live programs. |
|