SMSF’s short banks and long miners at precisely wrong moment

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I have to write this story every few years. Whenever we have a positive iron ore cycle, investors make the same old mistakes. In particular, they assume that the mining cycle of plumped-up dividends is sustainable:

  • SMSFs have gone shorter banks for fear of lower dividends.
  • They have rotated to miners for higher dividends.
  • The shift is almost one-to-one and has pushed miners to very high levels of SMSF holdings.

The last time I had this fight was with journalistic legend, Trevor Sykes, who was advising all and sundry to buy miners in the “Sykesnado” of 2015, right before dividends got slashed.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.