Archive for October, 2018

Platinum, with Magellan and few others, is one of the premier Australian international fund. It actually was the first great Australian managed international fund.

Its shares have been going nowhere (mostly down) as the performance are lagging Platinum International 6.4% vs 19% MSCI Index, Asia 4.9% vs 10%. On a six month basis is even negative.

This shows great resilience of Platinum in front of a retail client.

A smart manager can see that the market is frothy and we are heading for a cliff. So it has to prepare the portfolio for the next cycle as he has a precise view of the risks and potential future.

But it also suffers backlash from clients (as cash outflows) as the retails clients see cheap ETF alternative as winners.

In the long run smart managers like Platinum, or Magellan are winners. But retail clients even if he knows that money (specially super) is for the long run – often say so, but see it differently.

This is a conundrum for the smart manager. and it is always sign of real skill to stay the course even in the face of market backlash.


US yield break out!

Posted: October 4, 2018 in Uncategorized

Finally the US 10 year broke with decision the previous top!

It is at 3.18% with a target 4.5%. Inflation will come!

But ..wait a minute…the market did not collapse!!

In reality if you analyse the last bond bear market 1952-1980 (yes that far away) there are takes.

1. 1952_1972 the market went more or less up

2. 1972_1980 the market went in dive…but only after the USD leaving the gold standard, oil embargoes, Nixon etc.

3. It is so far away that so many lot things changed.

In effect a few other events have to happen to start a crisis.

But they are all there…oil, Trump, trade wars. So maximum alert.

Many institutions will start to pay attention to 3.5% _3.8%.

One sure consequence is that the mortgage interest rates will go up and Australian real estate down.