Podcast Archive

 This week we have another returnee to the couch, consummate professional and great friend of Henry - Julia Lee. Julia Lee is the Chief Investment Officer at Burman Invest. She has 20 years of experience in financial markets. Her passion in markets is in combining fundamental and technical analysis to analyse companies. Julia is one of Australia’s best-known financial experts and a frequent speaker at industry conferences. Julia is on the board of directors for the Australian Stockbrokers Foundation. She has her Master of Business in Finance (MBus), is an accredited Derivatives Adviser 2 (ADA2(ASX)) and is RG 146 compliant. Enjoy! 

We thought as we went to be last night with the futures down a few hundred points and our market down 2.5% and closing on its lows that we could have woken up to another precipitous drop. It didn't happen. Market marked up this morning and now not a lot happening. Lots of stuff in the Strategy section today - a lesson in charts - a debate about the second wave not affecting the market and a few other topical points of interest. We also have an article in the newsletter today called THE BIG END OF TOWN about the big industry and Super funds. If you have your money in one or are thinking of giving up shares and letting them do it for you, you need to read this. 

Wall St down 710 - our market opened down 109 then rallied 50 points. A one day wobble or the start of a downtrend? We'' find out in the next few days. Looking like a wobble at the moment. No sell signal on the ASX 200 (too early) but there was one of the S&P 500 overnight. See the charts in the Strategy section today. Today we taught Members about the Collins Class Rule and covered a few of the deteriorating headlines. We also re-published the stocks and sectors that sold-off in the last correction and then bounced in the recovery rally - it is a good guide to where the risk lies in the market if we do have another virus-related sell-down. Meanwhile the travel trade is over. Qantas parking A380s for three years and telling us it doesn't anticipate international activity for a year at least. Energy trade also over for now. 

We made the realisation today that the "Relapse Risk" is not a significant market event that will simply 'happen' one day. The relapse is already happening - the world, the US and now Australia, is beginning to realise that there are geographically defined hotspots and it is not for Trump, Morrison or Boris to tell their State governors what to do, the virus has to be handled locally.  In which case there will be no Federal decisions to upset the market, just rolling local decisions. On which basis the relapse risk is low. Which is why Morrison, Trump and Boris are now left, having played their national fiscal policy cards, encouraging state governors and premiers to re-open when they can...please. But it is not up to them. Today in the strategy piece we also have an educational piece on an interesting investment philosophy about trading BL2TR companies (read the strategy piece) and we then look at the tides beneath the sea, the sectors that are likely to struggle post virus, or thrive. And finally we ask an interesting question about "What would we do if we knew the market was going nowhere?". 

A wild ride today as a headline that the trade deal is "over" turns our market around from up 55 to down 62 although the White House adviser that said it now says his comments were taken out of context and we're up 2 as I write. Whatever. Still in cash watching to see whether the storm dissipates or develops, waiting for the next trend. The case number headlines continue to deteriorate but we wonder whether case numbers actually matter any more. Maybe not. We look at a few stocks and sectors today. If the US market wasn't close to all time highs you might develop some mild optimism about the worst being behind us. It probably is in some sectors, but nothing looks compelling today. That may change, but not today, not on the trade wobble, not on case number trends, not on Trump losing traction and not on price. 

The market is doing a bit better than expected this morning recovering an early fall as the Dow Futures rally off the lows. We're still cashed up in our SMAs and happy to be cashed up against the backdrop of 'Pandemic Resurgence' headlines, particularly in the US as well as Australia. We talk about watching the weather on the radar, ready to set sail rather than sitting in a boat on the stormy seas hoping the weather improves. We talk about the Trump Train losing speed, the cynicism over money printing, and the possibility that rising case numbers may not matter. We also list some of our now stock-standard investment philosophy one liners.

Back on the couch this week Henry is talking to his old buddy and long time stockbroker Adam Dawes from Shaw and Partners. A repeat offender on the couch, but a popular request to come back. This week Adam and Henry talk some stocks he likes, his views on the market at this level and specifically a look at Wisr (WZR), a neo-bank I have followed for some time, so it’s interesting and timely that Adam had lunch with the CEO and management team at Shaw's and shares his thoughts. Adam is a good friend of Henry from the old Sky Business days and one of Shaw and Partners Senior Investment Advisors and long time stockbroker. Adam is a very successful private client broker that many of you will have seen on TV - he is a familiar face. Great stuff. Enjoy! 

In the Strategy piece today we make the point that the precipitous moment we saw in the market at the end of last week appears to have passed but we're happy to be in cash waiting for the break than sitting fully investing hoping the market can extend its hair on fire recovery rally and fearful that it can't. We have all the power, no risk and we await the next trend. Today we talk about the idea that there may never be a second wave and we talk about being cute in a big uptrend. Happy to go into the weekend with no risk - our main worry is that we could be making more money. We can wear that for now. 

The market down today which suits us but there are reasons to doubt our recent cash call with a buy signal on our Heikin-Ashi chart. We discuss that in the Strategy section today and decide not to do anything about it, the market is a bit of a charade at the moment trading on constant Fed support which at some point is going to wear thin...maybe. Don't fight the Fed! Otherwise there are some interesting articles in the Strategy piece today. Most of the main messages are the same. Fears of a second wave and debate over whether there will be a V, U, L or W shaped recovery (W becoming the more likely).

We spent the day yesterday in cash watching the market go up 223 points or 3.9%. It can be stressful not making any money,  but its a lot more palatable when you're not losing anyone any money. We list the positives and negatives in the strategy piece today and deliver on our promise to dissect the anatomy of the recent fall and there are some very interesting observations not least of which is that there has been a significant rotation in the last week from recovery sectors to safe sectors. The other observation is that the technology sector is still outperforming. It seems to be adopting the US identity of being a safe or at least, desirable, sector in a COVID-19 world. On that front we have highlighted a good article on Livewire today about the digital growth companies benefiting from COVID-19 and we have also highlighted a few Non-Member emails and answered them today. Still in cash and, whilst we are open-minded, in the new volatility, we don't expect that to change for some time.