3 wires that caught my eye this week

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Hamish Douglass: This time is different

‘This time is different’ is a sarcastic quip, often thrown around amongst investors who assume that short-term trends will continue into the future. Magellan’s Hamish Douglass speaks in full seriousness, however, when he urges investors to consider the ramifications of the huge technological changes happening in the world. Across a range of sector, we appear to be reaching an inflexion point in the rate of advancement. In his latest letter, he shares eight predictions of what could occur in the next 10-20 years, and what it means for investors:  (VIEW LINK)

Valuations vs. earnings: Reporting season 2016

Having read many reporting season previews, this one stood out. Rudi Filapek-Vandyck from FNArena has broken down the outlook sector by sector, adding his signature insights. The combination of hard data and qualitative analysis makes for a worthwhile read. Of particular interest was the breakdown of earnings growth by sector – it’s amazing what happens when you remove resources and banks from the equation. Read Rudi’s views on Expensive Defensives, high-PE stocks, banks and more:  (VIEW LINK)

Banks feeling the pressure

The need for banks to raise additional capital has been well-covered in the last year or so, however, that’s not the only pressure the banks are facing, explains Stuart Jackson from Montgomery Investment Management. With an increasing portion of deposit accounts paying zero interest, banks are hesitant to move these rates into the negative, meaning they can’t cut further. Regulatory changes also mean that banks will be forced to source a larger portion of funding from long-term borrowing. In this article, he explains why the banks increased their term deposit rates in the wake of the recent RBA rate cut:  (VIEW LINK)

Money flows from mining to technology (and back)

Hedley Widdup from Lion Selection Group shared this fascinating chart in the latest update. With the notable exception of the GFC, it seems that when tech is up, mining is down – and vice versa.

[Miners vs Tech stocks.PNG]

What’s been Trending this week?

Aussie Dividend Aristocrats and how to find them

Following the popular article about ‘Dividend Aristocrats’ recently, we reached out to three income-focussed fund managers to get their view on some issues around income stocks:  (VIEW LINK)

Why companies with the network effect win

Nick Griffin from Munro Partners explains why even Google has failed to compete against companies with established network effects:  (VIEW LINK)

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