Monthly Reports
January 2024 Report
"We simply do not believe that one can systematically add value by being with the in-crowd" - Kerr Neilson
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December 2023 Report
"If you don't know where you're going you may wind up some place else" - Yogi Bera
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November 2023 Report
"This mission is too important for me to allow you to jeopardise it" - HAL 9000
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OCTOBER 2023 REPORT
"Waiting helps you as an investor and a lot of people just can't stand to wait" - Charlie Munger
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SEPTEMBER 2023 REPORT
"Inflation is when you pay $15 for the $10 haircut you used to get for $5 when you had hair"
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AUGUST 2023 REPORT
"Economists can't predict the future. They can't even predict the past" - Gerald Ashley
JULY 2023 Report
"We use the term 'risk' all too casually and the term 'uncertainty' all too rarely" - Jack Bogle
JUNE 2023 Report
"When I see a bubble forming, I rush in to buy, adding fuel to the fire" - George Soros
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May 2023 Report
"There are two times in a man's life when he should not speculate: when he can't afford it, and when he can" - Mark Twain
April 2023 Report
"An economist is an expert who will know tomorrow why the things he predicted yesterday didn't happen today" - Laurence J. Peter
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March 2023 Report
"When combined with the drawdown in the Treasury's General Account, they (The US Federal Reserve) reversed, in just one month, half of ALL the liquidity withdrawn from the system in 2022"
February 2023 Report
"Good banking is produced not by good laws but by good bankers" - Hartley Withers
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January 2023 Report
"Everyone has a worldview, and everyone is positive theirs is the correct one. I can tell you without a doubt your [sic] wrong" - Wesley Gray
December 2022 Report
Sea change (idion): a complete transformation, a radical change of direction in attitude, goals....(Grammarist) - taken from Howard Marks Dec 2022 Memo
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November 2022 Report
"I see every day how competitive the markets are, and how tough. So the idea that you can do this yourself, that's out the window" - David Swensen, CIO Yale University Endowment 1985 - 2021
October 2022 Report
"When the facts change, I change my mind. What do you do sir"? - John Maynard Keynes
August 2022 Report
"It's worth remembering that it is often the small steps, not the giant leaps. that bring about the most lasting change" - Queen Elizabeth II
July 2022 Report
"Progress is impossible, without change, and those who cannot change their minds, cannot change anything" - George Bernard Shaw
June 2022 Report
"You got me in between the devil and the deep blue sea" - George Harrison
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May 2022 Report
"We believe in the reasons because we've already made the decision" - Daniel Kahneman
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April 2022 Report
"Playing where you're the most skilful player at the table is the best way to ultimately make money" - Michael Mauboussin
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March Quarterly 2022 Report
"You cannot beat a roulette table unless you steal money when the dealer isn't looking" - Albert Einstein
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February 2022 Report
"The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists" - Ernest Hemingway
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January 2022 Report
"Nothing ruins the truth like stretching it" - Roly Houghton
The investment landscape has changed. The strong tail wind of falling interest rates has run its course and instead markets face the headwind of rising rates.
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December 2021 Report
"We ignore outlooks and forecasts...we're lousy at it and we admit it...everyone else is lousy too, but most people won't admit it" - Martin J. Whitman
The traditional Santa rally saw most global equity markets close out the year on a high with the US S&P hitting a new record on the back of strong earnings.
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November 2021 Report
"It's a rare person who wants to hear what he doesn't want to hear" - Dick Cavett
Equity markets remained relatively buoyant given the arrival of the Omicron coronavirus variant....
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OCTOBER 2021 REPORT
"All I know is that I know nothing and I'm not even sure about that" - Socrates
Global equity markets experienced another strong month in October with several indices making new all-time highs.
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September 2021 Report
"If there must be madness, something may be said for having it on a heroic scale" - John Kenneth Galbraith, The Great Crash of 1929
Global equity markets were generally weaker in September with NZ and Japan notable exceptions.
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August 2021 Report
"Most of the time, the end of the world doesn't happen" - Howard Marks
Another month, more record highs for equities, as the so-called reopening trade showed no sign of slowing down.
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July 2021 Report
"Solve one problem and you keep a hundred others away" - Chinese proverb
Global equities were generally stronger in July led by the US, which is reporting a strong Q2 earnings season.
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June 2021 Report
"I hate to lose more than I love to win" - Jimmy Conners
Global equities closed out the first half on a strong note with most major indices comfortably up double digits on the back of a strong economic rebound, the exception being the local NZX 50 which fell -3.3%
May 2021 Report
"Inflation is when you pay fifteen dollars for the ten-dollar haircut you used to get for five dollars when you had hair" - Sam Ewing
Global equity markets were generally stronger in May with the MSCI World Index closing up 1.5%
April 2021 Report
"Bitcoin reminds me of Oscar Wilde's definition of fox hunting - the pursuit of the uneatable by the unspeakable" - Charlie Munger
The global reopening continued in April as the covid vaccination program begins to reach critical mass with the US and the UK leading the way.
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March 2021 Report
"Smart men go broke three ways - liquor, ladies and leverage" - Charlie Munger
Oh what a difference a year makes. New Zealand investors looking at their annual statements this time last year could have been forgiven for feeling rather ill when virtually every global equity market was underwater following one of the fastest bear markets in history.
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February 2021 Report
"Bonds are not the place to be these days" Warren Buffett
February has seen sharp rises in wholesale interest rates leading investors to re-price yield assets.
January 2021 Report
Saxe Coburg portfolios had another solid month in January across both aggressive and conservative mandates thanks to some good results from long positions and non-correlated investments.
December 2020 Report
The correct lesson to learn from surprises is that the world is surprising" - Morgan Housel, The Psychology of Money
The bull market in equities continued through to the end of the year, with the broadest measure of global equities rising 4.3% in December.
November 2020 Report
"It is not the strongest species that survive, not the most intelligent, but the most responsive to change" - Charles Darwin
As we approach the end of this remarkable year in markets, Covid related issues remian the dominant drivers.
OCTOBER 2020 REPORT
"The majority of the stupid is invincible and guaranteed for all time. The terror of their tyranny, however, is alleviated by their lack of consistency" - Albert Einstein
Global equity markets were generally weaker in October as the US election loomed large on the horizon and Covid-19 cases accelerated to new record levels.
September 2020 Report
"Doubt is not a pleasant condition, but certainty is absurd" - Voltaire
September once again lived up to its billing as a poor month for equities with most global markets ending in the red. NZ, Australia and the US fell - 1.6%, -3.4% and -3.8% respectively. Looking back over the third quarter equities generally performed strongly.
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August 2020 Report
"If something cannot go on forever, it will stop" - Stein's Law
There has never been a time when this law of economist Herbert Steain was more applicable. We have technology stocks rising to mind blowing valuations, interest rates falling to new lows with talk in NZ of negative rates, debt rising to unimaged levels
July 2020 Report
How quickly things change. As I write this Auckland has recently joined Victoria in Australia by returning to lockdown following the recent unexplained outbreak of covid-19 in the community.
June 2020 Report
The June quarter was in stark contrast to the first 3 months of 2020. The recovery which began in the last week of March carried on unchecked until mid-June, when markets took a breather.
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May 2020 Report
May saw a continuation of the very strong rebound in equity markets which began at the back end of March. The recovery has been as record breaking as the decline was, when markets capitulated and investors off-loaded anything they could to get into cash, in particular, USD's.
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April 2020 Report
The pandemic which we are all tired of hearing about, analysing and prognosticating over delivered a new challenge to investors. Never before have we been faced with the task of valuing businesses which have lost all of their revenue and are surrounded by uncertainty about for how long, and how much will resume if things return to normal, if they do??
March 2020 Report
The sharp market sell-off has spelt the end of a decade long bull market in equities and we are almost certainly close to the end of a 40-year bull market in bonds.
The Covid-19 virus is a left field risk that has served as the catalyst to ignite a spectacular decline in the global equity market.
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February 2020 Report
Financial markets have reacted to the disruption being wreaked by the Covid-19 virus. The impact of shutting down whole cities, and now countries is a new shock, one most of us have never experienced. It is a 'tail risk' a 'black swan' event, impossible to predict.
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January 2020 Report
January was very much a month of two halves for global markets with the strong performance of 2019 carrying through into the new year before coronavirus fears (more below) bought markets back to earth.
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December 2019 Report
What a difference a year makes. 12 months ago we were reeling from one of the worst quarters in living memory with virtually every asset class taking a battering.
After the sharp falls in equities during the fourth quarter of 2018, the first four months of 2019 brought a strong rebound.
November 2019 Report
November was yet another strong month for local equity markets with the Australian All Ords up 3.1% and the NZX 50 up 4.9% taking year-to-date returns to 26.4% and 28.4% respectively. This puts them on track for their best return since the GFC, something I'm sure no one was predicting back in January.
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October 2019 Report
October was another good month for global equity markets (+2.6%), as central banks maintained their easing bias and diminished geopolitical tensions while Emerging markets (+4.2%) also rallied as investor's risk appetite increased
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September 2019 Report
September was another strong month for risk assets with most global equity markets closing in the black.
Emerging markets led the way with a gain of +5.7% versus a gain of +2.2% for their developed market cousins.
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August 2019 Report
US equities fell -1.6% in August following the late July cut in interest rates, as the yield curve inverted and the Fed flagged slowing economic growth. Unsurprisingly, volatility spiked on increased fears, with August experiencing 11 daily market moves greater than 1%
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July 2019 Report
While global equity markets paused for breath in July the local markets continued to forge ahead with the NZX50 up 3.4% and the Australian All Ords up 3.0%, taking returns for both indices to 23% YTD.
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June 2019 Report
Global equity markets rallied +6.6% in June as they shrugged off trade war fears, with central banks across the world indicating further stimulus was at hand. US markets led the charge to record highs.....
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May 2019 Report
Turmoil returned to global equity markets in May following Donald Trump's latest salvo in the ongoing US/China trade war.
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April 2019 Report
April was another strong month for global equities with the MSCI World Index rising 3.6%, taking gains for the year to 16.7% the strongest start to the year since 1987.
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March 2019 Report
The equity market recovery rolled on in March with most major indices closing higher.
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February 2019 Report
February saw a continuation of the strong rebound in equity markets which began in the last week of December when the Fed about turned on its tightening agenda.
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January 2019 Report
Equity markets snapped back from December's carnage with the S&P 500 up 8.0%, its best January since 1987. Tech stocks led the charge driving the Nasdaq up 9.7% while the local NZX50 dragged the chain with a measly gain of 2.0%.
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December 2018 Report
The roller coaster ride that has been global equity markets lately became more extreme in December with the MSCI World Index falling -7.5% despite rallying +5% in the last four days of the week.
November 2018 Report
Uncertainty reined in November as the general weakness in equity markets rumbled on for the first few weeks of the month...
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OCTOBER 2018 REPORT
The "October Effect" - or the "Halloween Effect" if you're American - received renewed impetus this month with global equity markets taking a battering.
The theory goes that stock markets tend to fall in October and is probably due to the October stock market crashes of 1929 and 1987.
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SEPTEMBER 2018 REPORT
We could join the chorus of opinion about what is happening in global equity and bond markets but we really have no unique insights to add. In the quarter, and for the past few years, we have read numerous arguments for why we are approaching the end of this current rise in share.
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August 2018 Report
August was an interesting month locally with the half yearly reporting season an opportunity for local managers to review their portfolios and gauge the mood of the market
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July 2018 Report
After hitting new highs at the beginning of the month the NZ stock market eased slightly to end the month down a modest -0.2%. Meanwhile listed property paused for breath having gained 9.1% in the last five months.
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June 2018 Report
Lately I have had a number of people ask me 'what are you investing in these days'?
To explain this, I really need to explain what we are trying to achieve, which of course boils down to what our clients want to achieve.
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May 2018 Report
The 'balanced' portfolio has become an institution in the financial world. Equities and bonds are the main ingredients and the 'mix' determines the categories of balanced funds commonly used.
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April 2018 Report
A question we are being asked about current portfolios is why we have so much in equities?
This is a fair question for retirees who rely on income from their portfolio and have a low tolerance for capital loss. It is also a fair question for someone seeking growth but with an emphasis on capital preservation.
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MARCH 2018 REPORT
The local NZX50 closed the '17/18 financial year with a whimper as it fell -0.7% for the month, ending the quarter down -0.9% but despite this gaining 15.6% for the year.
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February 2018 Report
The local stock market gave up all of January's gains this month following a fall of -0.8% for the NZX50 while across the Tasman the ASX All Ordinaries rose a modest 0.2% albeit continued strength in the kiwi dollar reduced this to -0.9% in NZD terms
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January 2018 Report
Market corrections are always uncomfortable. After a very strong start to the year in January, accompanied by talk of a 'melt-up', markets have suddenly decided instead that it was time for a 'melt down'.
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December 2017 Report
December was another strong month for equities with increases of +2.6%, +2.0% and +1.0% for the New Zealand, Australian and US markets respectively, however the relative strength of the Kiwi dollar detracted somewhat from US returns which were -2.8% in NZD terms.
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November 2017 Report
We are beginning to sound like a stuck record as equity markets seem to be hitting new record highs on a monthly basis.
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October 2017 Report
The bull market in global equities continued to roll on in October with gains of +2.7%, +4.1% and +2.2% for the NZX50, Australian All Ords and US S&P500 respectively.
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September 2017 Report
Global equities ended yet another strong month, up +2.3% (+1.6% in NZD), taking their gains to +5.4% (+6.5%) for the quarter and +18.8% (+19.8%) for the year.
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August 2017 Report
The music continued to play in equity markets with the NZX50 up +1.6% in August, its eighth monthly increase in a row and its 2nd longest winning streak in the last 20 years. This was only trumped by the US where the S&P 500 recorded a record 10th positive month in a row.
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July 2017 Report
July saw a continuation of the placid and rising equity market globally and locally. Global equities rose 2.8%, led by a 6% rise in Emerging Markets, and a 2% rise in the S&P500. The NZX50 rose 1.1% while Australia was flat.
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June 2017 Report
Our portfolios continue to muddle along, with a number of our managers struggling with the very low volatility in markets and the high correlation between stocks.
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May 2017 Report
Global equity markets rose +2.3% in May, led by the UK (+4.4%), Emerging Markets (+3.0%) and Japan (+2.4%), while closer to home markets were more subdued with the local NZX50 rising +0.5% and Australia's All Ordinaries falling -2.6%, largely on the back of weakness in the financial sector (-10% see below).
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April 2017 Report
With a third of the year already gone the local NZX50 is currently up 7.2% while the Australian All Ordinaries and MSCI World Indices are up 5.3% and 8.2% respectively. Over 12 months NZ equities are up 8.2% vs 10.0% and 15.3% for the Australian and World markets.
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March 2017 Report
For most NZ investors March 31 is the end of the financial year. It is always interesting to cast our minds back to what we were thinking this time last year. In our March 2016 newsletter, we described a world concerned about global growth.
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February 2017 Report
The February reporting season passed relatively uneventfully on the local market with analysts upgrading their 2017 earnings forecasts for 62% of the companies reporting versus 38% that received downgrades, although the optimism was dampened by a slight fall in expected earnings growth to 5.8%.
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January 2017 Report
Global equities continued on with the pre-Christmas rally in January, with the tech heavy Nasdaq index and Emerging Markets particularly strong, gaining 4.3% and 5.5% respectively. The S&P500 was up 1.8% but Europe and the UK were marginally weaker, down 0.6%, similar to the All Ords Accumulation Index in Australia, which fell -0.8%, mostly due to weakness in the banks.
