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 Friday 18 September 2015

Independent continuing education for investment portfolio construction practitioners


In Fodder this week, PortfolioConstruction Forum faculty member, Tim Farrelly, picks apart the argument that Australia's residential property market is a bubble that's overdue to crash and cause a recession. Tim is effectively arguing directly against Chris Watling's presentation on the likelihood of an Australian recession at our recent Conference, as featured in last week's Fodder.

Independent economist, Saul Eslake, also argues against Chris's thesis that an Australian recession is looming. Rather, as Saul presented at Conference, a recession is possible but not probable. As always, our role is to present contrasting views - you can "attend" both Chris's and Saul's presentation and decide who you agree with and whether you need to investigate further.

On Europe, (German trained) economist and faculty member, Oliver Hartwich, argues that the EU is coming unstuck as its four freedoms, being free movement of people, capital, goods and services, come undone. Having shown with its treatment of Greece that capital controls can be introduced, now member countries are closing their borders in the face of the refugee crisis, effectively restricting the free movement of people. 2015 has seen the re-emergence of the nation-state in Europe, he argues.

Partners Group's Charles Dallara - a very highly rated speaker at our Markets Summit earlier this year - points to the rising sense of nationalism and divisiveness among EU countries as well, highlighting it as one of three key drivers of global markets, along with China and the US Fed. The later seems to worry Charles most - in particular, that the Fed will undermine the US recovery by being too cautious. And right on cue, the Fed has today kept rates on hold at its much anticipated meeting.

Finally, Zenith Investment Partners identifies another "Undiscovered Fund" - a relatively unique Australian equities fund that targets an asymmetric risk/return profile.

All the best for another great weekend's learning! - Graham

P.S. It's not investment related, but take a moment to enjoy the latest blog from Graham Long, a highly popular member of our Conference 2015 Great Debate panel.


The residential housing bubble to cause a recession?
The Australian residential property market is stretched. But about to crash, triggering a recession? It's nuts and you can clearly see it's nuts.
Tim Farrelly, farrelly's

Crossroads... The Australian economy – recession or “she’ll be right”?
An Australian recession - possible, but not probable
It's been almost 24 years since Australia's last recession. It could be said Australia is “due for one”. While it would be foolish to say that the chances of a recession in Australia are zero, it's also wrong to say that they are over 50%.
Saul Eslake, Independent Economist Resources
* Rated in the top 10 of 40 presentations by Conference 2015 delegates

The EU is falling apart
Europe in 2015 stands at the crossroads. The euro crisis and the refugee crisis are testing the foundations of the European project. Even if the EU survives this challenge, it will be a much changed and probably much weaker.
Oliver Hartwich, The New Zealand Initiative

The 3 key drivers of markets
The last few weeks have felt like riding on that old, antiquated rollercoaster – unexpected turns, harsh stops and, frankly, no clear sense of when the ride was going to end. Why have markets reacted so sharply, and what's ahead?
Charles Dallara, Partners Group Opinion

Undiscovered Fund: Au shares strategy with strong downside protection
An actively-managed Australian shares strategy that is complemented with strong downside protection capabilities, with the aim of reducing losses in market downturns by approximately 50%.
Zenith Investment Partners

Member comments
Real Return funds…lacking reality?
Michael, I agree, but with a few qualifications. I agree that the chances of a manager hitting their CPI + 5% objective are low in the latter stages of a bull market...
David Blunt, Perpetual Private Wealth


Oil's new normal
Oil prices have headed south again. The current decline also has an important demand dimension. A sustained price recovery will not occur quickly...
Mohamed El-Erian, Allianz

The real message from oil
If you want to understand falling oil prices, forget Chinese consumption and focus on Middle East production. And, if you want to understand the world economy, forget about stock markets - focus on the fact that cheap oil always boosts global growth.
Anatole Kaletsky, GaveKal

Crossroads... The Australian economy – recession or “she’ll be right”?
Australia – recession is beckoning
Special one-off factors have underpinned Australia's record expansion. The key to forecasting the next Australian recession lies in forecasting the end of cheap money – if correct, then clearly a major investment crossroad for all Australian residents and investors.
Chris Watling, Longview Economics
* Rated 2nd of 40 presentations by Conference 2015 delegates

Crossroads... Retirement income certainty - is it an oxymoron?
A client's life is a mix of stocks & bonds - allocate around it
It is time to properly account for risk characteristics of client’s most valuable asset - their human capital. This isn’t easy to implement and places practitioners in a difficult situation...
Prof Moshe Milevsky Resources
* Rated 1st of 40 presentations by Conference 2015 delegates

Real Return funds…lacking reality?
Real return investing isn't too real at all, with big targets like CPI+5%. It is an objective that is not strongly linked to the reality of investment markets - so prepare for another investment approach aligned with disappointment.
Michael Furey, Delta Research & Advisory
8 comments Opinion

Europe's recovery - from caterpillar to butterfly?
The progress we have seen in European markets in 2015 is sustainable over the next 12 months. But, investors should temper return expectations and anticipate continued market volatility.
JP Morgan Asset Management White Paper

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