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14 Feb 2020

Friday Tidbit

Why can’t we focus anymore?

Could it be because focused single tasking is thought to be less efficient than its sophisticated (and overrated cousin) multitasking?

Enjoy the insightful read.

Click to read.

 

13 Feb 2020

Coronavirus outbreak: What it means for markets

Clients are asking questions about the potential impact on global economic growth and financial markets.

You could expect to see a sizable decline in consumer spending and manufacturing activity in China and reduced tourism, luxury goods spending and commodities purchasing but it has not materially impacted financial markets.

Why because viral outbreaks similar to this have occurred in the past with minimal impact on financial markets.

Click for chart.

Note however, if the situation was much worse, for instance if the Coronavirus had a 100% death rate then there would be global panic and financial markets would be in chaos.

 

5 Feb 2020

22 Coal Power Plants

Don’t understand.

The Japanese are forward thinking and have chosen to return to coal.

Click to read.

Bill Gates, billionaire philanthropist and Microsoft Founder has a safe nuclear clean energy solution.

In Part 3 of the series ‘Inside Bill’s Brian’ he presents a safe nuclear solution which will use the current stockpiles of nuclear waste and also reduce pollution from fossil fuel consumption.

The old generation nuclear power plants are lethal and should be decommissioned and replaced with safe nuclear plants.

Click to watch.

 

4 Feb 2020

Market Metrics: S&P/ASX200

Question, are current valuations stretched in the Australian stock market?

Attached is price to earnings chart (P/E ratio) to 31 December 2019 for the top 200 listed companies in Australia.

The price to earnings ratio is used as a measure of a company’s share price to its earnings per share. Generally a lower P/E is better because it implies that you are paying a lower price but as with all indicators this does not always hold true.

Comparing the P/E ratio over the past 14 years implies that the top 200 listed companies in Australia are stretch with the biggest trouble coming from the extreme valuation in the technology and healthcare sectors.

Click for chart.

The message for investors however is unchanged and that is to remain invested according to your appetite for volatility and when fear and panic take hold during the next financial catastrophe, to take advantage by buying more quality assets at discounted prices.

 

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