Making sense of the US economy
How is it that, in the world’s largest economy, unemployment is down, the housing market is strong, the Fed has started to raise rates – and yet, the agricultural sector is in a downturn more severe than during the Global Financial Crisis (GFC)? It’s somewhat of a contradiction to say the least. The US economy […]
Is the iron ore price rally sustainable?
Since late last year, the iron ore price has rallied by more than 50%, increasing from less than $40/tonne to approximately $60/tonne today. It has coincided with renewed optimism (by some) over a return to the credit-fueled fixed-asset-investment-led growth model that has characterized China over the last decade. Should Chinese policymakers instruct their banks to […]
The US oil boom that debt built
We follow economic drivers that impact your equity returns very closely here at Montaka. One of the key economic drivers that is impacting many global industries and markets is the oil price. We have written about the oil and gas space before, which can be found here, here and here. As we have noted in […]
Accounting for the GAAP in reported earnings
The importance of accounting cannot be overstated in the eyes of the Montaka research team. Accounting is the lens through which the underlying economics of a business are viewed. If this lens is distorted, the perception of a business’ health will be somewhat distorted too. One of the four characteristics we look for in an […]
Why barriers to exit are killing commodity prices
Many investors understand the importance of “barriers to entry” to an industry. If an industry is difficult, time-consuming or prohibitively expensive to enter, then-incumbent industry players will be protected from competition. This is an attractive characteristic for the shareholders of said incumbents and usually results in the industry generating above-average industry returns. Fewer investors consider […]
A year-end check on global monetary conditions
The year of 2015 has been rather eventful from a global monetary perspective. We thought we would provide a brief year-end pulse-check on global monetary conditions to set the scene for 2016. For us, three key dates shaped where we are today: December 16, December 3 and August 11. December 16 On this day, the […]
Smart money on next generation
In this column, published in the Herald Sun, Andrew Macken highlights the importance of understanding the differences in behaviors of generations. Read here.
Beware: the dangers of dollar-denominated debt
Every day we are presented with a myriad of economic statistics that can drown all but the most discerning of readers. Occasionally, however, we see one number that is so important and so significant in terms of potential future implications that it is worth pausing for some reflection. A few weeks ago, The Wall Street […]
The Healthcare Dilemma
In 2013, the U.S. spent a whopping 17.4% of GDP on healthcare, more than any other high-income country. The magnitude of U.S. health expenditure is a highly-public, highly-politicized issue, yet few can elucidate why U.S. health spend diverges dramatically from other high-income nations. It is worth trying to understand the cause of this difference and […]
Harvard looking for short-sellers
A couple of weeks ago, the Financial Times published an article highlighting the cautiousness Harvard’s $38 billion endowment fund was now exercising with respect to its outlook for global financial markets. It’s perhaps little wonder. Take a look at the table below circulated by economic observer, Cullen Roche, last month. Every single major asset class […]
