Secular changes are benefitting global growth investing. Are they here to stay?
Key points:Since the Global Financial Crisis (GFC), growth stocks have outperformed value stocks significantly. This follows a long period of outperformance for value.
Whilst the “tech bubble” made some investors weary of technology and growth companies, valuation levels for tech companies today are significantly lower than 20 years ago. Further, investors should look at the earnings certainty of industry incumbents through th...
Three things the Equity Risk Premium is telling us about investment markets
One of the key decisions that investors must make is how much to respectively allocate to equities and bonds. This decision is made in the knowledge that over time equities have generated superior investment returns. Compensation for the additional volatility, the additional return equities earn over bonds is known as the Equity Risk Premium (ERP). The ERP, while persistent over the long term, varies over the short to medium term, with the direction of the variance having broad implications for investment portfolios.READ MORE
Australian Royal Commission: Final report shakeup
After a year long review the Hayne Royal Commission (RC) into Misconduct in Financial Services has laid out recommendations. This reshaping of the financial services industry has significant implications and received strong political support, ahead of a likely election by 18 May 2019. It is possible that the Labor Party may have a harsher interpretation of potential changes than the RC recommends.READ MORE
New Zealand equity market debt trends
One of the driving factors behind the global financial crisis (GFC) was high levels of company debt. High leverage and lower earnings coverage of interest costs heightened risk in the US equity market. Recently published research by a global investment bank[i] suggests that US company debt levels may be creeping up again. But are we seeing the same thing happen in New Zealand?
Research by Harbour indicates that the median N...
Postcard from Colorado – outdoor retailers
Harbour’s Managing Director Andrew Bascand and Senior Research Analyst Oyvinn Rimer travelled to Denver, Colorado for the Retail Outdoor conference.
Why did we attend the Outdoor Retailer Winter Market?
The Outdoor Economy in the U.S. alone is 3x bigger than the entire GDP of New Zealand
The Outdoor Economy is growing and is a source of global growth
Trade war and tariffs are impacting on the Outdoor Economy directly
US mid-terms election results: it’s now Blue and Red
With Andrew Bascand on a company research trip in Denver, Colorado, he has shared his on the ground views of the US mid-term election results and their implications.
My impression is that the US equity markets are fairly sanguine following the US election result because right now it is not about the politics – the economic data remains helpful and on track for the economic expansion to continue through 2019. The mid-terms ou...
Harbour Navigator: Postcard from China - The eCommerce growth model
I visited China last week and met with companies and commentators to dig beneath the data and get a sense of the current issues.
We visited many malls and shopping centres. In particular we went to mother and baby stores to experience the consumer in action, and witnessed the new eCommerce model. We also visited “wet markets”, hired bicycles with WeChat, and saw progress with a2’s new Chinese-labelled product. We saw first-ha...
The state of Infant Milk Formula in China
Harbour Senior Research Analyst Oyvinn Rimer recently took a trip to China, to investigate the state of the Chinese consumer milk market.
Disclosure: Harbour owns a2 Milk in a number of portfolios.
Having regularly visited China for a decade now, it never ceases to amaze me the sheer scale and speed of their development. Despite frequent visits, there are always noticeable changes to the land and cityscapes.
Two weeks ago, ...
How active management can provide a solution to technological disruption
The impact of technology is one of the most exciting aspects of being a professional investor. Technology can enable a business to significantly enhance its service offering, improving customer service and hopefully making an increased profit along the way – a win-win.
Disruptive technology, however, is when technology, or the convergence of multiple technologies, is sufficiently powerful enough to disrupt existing companies ...
Trade Wars...Or Negotiations?
While many of the details of the US Government’s proposed trade tariffs directed at China (aimed at reducing the US’s trade deficit with China) and China’s reciprocal tariffs, are yet to be made public, the immediate response is to increase uncertainty for investment markets.
Investment markets have initially interpreted a break out of a trade war as being negative for growth and as being inflationary.
In Harbour’s view, the...