Macro Investor Week 2

For those that don’t know or are yet to investigate, last week MB launched its new paid investment advice newsletter, Macro Investor.

The third edition will be published 8.30 Monday morning. In the mean time, find below the contents page of the past week’s edition for you to consider a 21 day free trial subscription. Remember, we’re offering a once only “founding subscriber” offer to MB readers; a 20% discount until the end of July rounding the price down to $385.

The same price as Rupert Murdoch’s Eureka Report and something of an improvement in quality and independence. Enjoy!

Macro Investor Volume 1, No 2

Macro Australia is different! 

• The half-life of optimism from Europe was shorter than expected, as focus shifted to weak data.
• Central banks in Britain, China and Europe all eased, but not enough for yields in Spain or Italy.
• Opportunities nevertheless abound for investors willing to consider deep value and specific stocks and sectors.

Data Global slide continues

• Australian non-mining activity improved but is still shrinking.
• A thaw is underway in retail spending.
• The US economy hit by Europe but not enough for QE3.

Technicals A false dawn

• A stalled risk market threatens to break back to previous lows on lack of stimulus.
• King US Dollar dominates the currency market and US bonds remains very strong.
• Australian stock market is sideways for now, probability of sustained breakout remains low.

Stocks

(CRZ)

• With a very high return on equity, Carsales.com.au has proven that it is still possible to mint money in media.
• Strong finances and a near-monopolistic position mitigate competitive threats and new entrants.
• Little margin of safety to present value however means CRZ stays on the watch-list for now.

(ARP)

• A significant beneficiary of the mining boom, ARB Corporation has seen its share price soar but still trails value.
• Sentiment is strong and market conditions are bullish, presenting a good case for allocation.
• Nonetheless, we remain watchful for a top in the debt and dirt dynamics that drive 4WD sales.

(BKL)

• With high returns on equity and capital employed, Blackmores is a profitable business in a growing sector.
• The recent acquisition of FIT-Bioceutical indicates an evolving strategy that may pose some risk.
• Nevertheless, the stock’s discount to estimated value mitigates the increase in debt or intangibles.

Trades

(US Dollar)

• Talk of the US Dollar’s demise has been pre-emptive to say the least.
• EUR and GBP rallies were snuffed out during the week and the AUD is struggling with overhead resistance.
• The USD index is positioning to break into a higher range putting further pressure on these pairs.

Fixed Interest Heritage delivers a modern return

• Households continue to seek safety in deposits, but the time may be arriving to diversify your fixed interest portfolio.
• How you structure your fixed interest portfolio also affects the volatility of your returns over time.
• Direct investing is best but investing options are manifold.

Property 

Developer friendly government to weigh on house prices

• While both Sydney and Melbourne house prices have fallen since October 2010, supply-side factors have meant the trajectory of those falls has been vastly different.
• Sydney’s bona fide housing shortage is supporting prices. Melbourne, on the other hand, has a supply glut.
• Recent reforms to land use and construction policy in both states will place additional downward price pressure, which threatens investor hopes for medium-term capital gains.

Special Report China will bridge its stimulus gap

• China has a unique political economy.
• It will have little choice but to stimulate.
• The longer run is a far greater challenge as the fixed-asset engine runs our of gas.

Classroom Gold in Currency ETFs

• Currency ETFs are available that hedge a regular stock portfolio without leverage.
• They offer currency exposure that is more easily controlled and lower risk.
• An alternative to gold that may perform better in genuine crisis periods.