At uni in 1994, my tutor told me Australia would always be poor as commodities would always lose value versus autos and tech. Buying mining stocks then netted 1000% return over the next 12 years.
treu but bbs and divs are now financed via debt vs fcf previously, best examples are appl or mcd and hence neg equity like russell elaborated on this earnings/market theme podcast, so net net balance sheet of corporates especially in us is deteriorating at a faster pace vs previously and if fcf is not picking up soon, and debt refinancing to happen at 10% 10y like russell propagtes than trouble is brewing in coming years when refinancing gets a hot topic, watch out or HYG and HYGH (hedged) which are already rolling over i guess...
The Irish market now is much more reliant on Equity and Private Credit. The banking market has contracted a lot. Competition is weak.
Home building is actually funded by the Irish government through Housing bodies that over pay for housing upfront which enables home builders/developers to build out projects.
NB Don’t worry about the coffee - just avoid the Sfogliatella :-)
So many things that were taught at University have to be un-learned
1) The value premium
2) Mean reversion in long-term macro series
3) The risk-free nature of (Federal) government debt
etc
At uni in 1994, my tutor told me Australia would always be poor as commodities would always lose value versus autos and tech. Buying mining stocks then netted 1000% return over the next 12 years.
Correct, although BHP didn't really start appreciating until 2000.
Now in 2025 are we seeing the Prebish-Singer thesis redux?
The Chinese economy hasn't collapsed (although there's a sharp slowdown) and yet crude oil is relatively cheap.
True - 1998 and the Asian financial crisis was the real bottom
Thanks for walking through your thought process. Working with this data is always treacherous since the methodologies often change.
Yes and most countries only started doing NIIP from 2010 or so
One thing I would adjust is the dividend yield vs the 80s as buybacks are large vs divs at the moment.
https://yardeni.com/charts/sp-500-dividends-buybacks/
The yield on the S&P when including BB+Divs is around 3% which is pretty good with growth.
True.. like I said valuation is tricky concept...
treu but bbs and divs are now financed via debt vs fcf previously, best examples are appl or mcd and hence neg equity like russell elaborated on this earnings/market theme podcast, so net net balance sheet of corporates especially in us is deteriorating at a faster pace vs previously and if fcf is not picking up soon, and debt refinancing to happen at 10% 10y like russell propagtes than trouble is brewing in coming years when refinancing gets a hot topic, watch out or HYG and HYGH (hedged) which are already rolling over i guess...
The Irish market now is much more reliant on Equity and Private Credit. The banking market has contracted a lot. Competition is weak.
Home building is actually funded by the Irish government through Housing bodies that over pay for housing upfront which enables home builders/developers to build out projects.
NB Don’t worry about the coffee - just avoid the Sfogliatella :-)
Hi Russell. David Cervantes has good analysis on this, I might suggest reaching out to him
https://substack.com/@pinebrookcap/p-162149775
Yes - he seems to be saying the same thing.