Fund Monitors Pty Ltd

www.fundmonitors.com
© Copyright 2022
Printed: 01 December 2022 5:04 PM

News

13 May 2022 - Hedge Clippings |13 May 2022
By: FundMonitors.com

    

Hedge Clippings | Friday, 13 May 2022

 

Given there are only 8 days until the election, it is difficult (as we'd much prefer) to avoid the subject in Hedge Clippings. One would have to say it's been a pretty unimpressive campaign on both sides, but that of course ignores the reality that this time around there's a real chance that "Teal" independents (who claim they're not a party in spite of their common policy, branding and major source of funding) will hold the balance of power in conjunction with the Greens.

Of course, technically teal is a shade of blue, but it's not far off the green on the colour wheel. Politically a little less left, but that is possibly showing our political bias.

A major topic of the campaign, and particularly this week, has been Albanese's economic credentials, or lack thereof. This week in our view he compounded that by agreeing to support a 5.1% rise to the basic wage to offset the effects of inflation on the lowest paid in the community. Unfortunately, that's the kind of shoot from the lip kind of thinking that will only feed into higher inflation and the potential for a wage/price spiral, whilst only assisting one section (those employed on low or basic wages) of the community. It wouldn't help pensioners or anyone not in the workforce.

Hedge Clippings is only a kitchen (or possibly that should be pantry) economist at best, but that kind of thinking is either betraying Albo's left-wing leanings from his student days, or confirming he's not across the economic detail. Or both.

An alternative, albeit more radical view, might be to tinker with the tax system - Maybe by raising the tax-free threshold one could assist the low paid worker by putting more in their pay packet without adding to inflationary or cost pressures on business and employers, although there would have to be adjustments elsewhere (presumably at the other end of the tax scale) to pay for it. In case you missed it, "adjustments" mean higher taxes for the higher or highest paid. This would be a dangerous call at election time, as Bill Shorten discovered to his cost leading into the last election.

So, leaving the election (we're all sick of it anyway) and onto markets, which have finally succumbed to the warnings and storm clouds that have been well flagged on the horizon for some time. The tech sector, where valuations led all others skywards, has borne the brunt as leverage and excess are bringing valuations to earth. The sector most affected however has been cryptocurrencies where Bitcoin, the flagship, is now below US$30,000 and still falling. There are those evangelists and true believers who are convinced this is a great buying opportunity, and others, no doubt like Berkshire Hathaway's Charlie Munger, who will probably think there's a further $30,000 to fall.

That's what makes a market.

Meanwhile, many equity funds - particularly those that focused on tech and growth - have suffered over the past 6 months, there are others - long/short, alternatives, resource focused for example that are showing the benefits of a diversified fund portfolio.


News & Insights


Facts are stubborn, but statistics are more pliable | FundMonitors.com

Big Player - Investment Snapshot | Insync Fund Managers

One of the ASX's most impressive stocks | Airlie Funds Management


April 2022 Performance News


Bennelong Emerging Companies Fund

Delft Partners Global High Conviction Strategy

Insync Global Capital Aware Fund

L1 Capital Long Short Fund (Monthly Class)

Collins St Value Fund

ASCF High Yield Fund

Airlie Australian Share Fund


If you'd like to receive Hedge Clippings direct to your inbox each Friday

JOIN OUR MAILING LIST


 

Australian Fund Monitors Pty Ltd
A.C.N. 122 226 724
AFSL 324476
Email: [email protected]