Altius Capital

Markets in 2026
Have not commented for awhile but read some interesting articles during a volatile week for markets this week with key takeaways for investors.
The financial markets have been supported by Policy Intervention, (GFC, Pandemic etc) but this just raises the bar for systemic risk, as shocks get absorbed without deleveraging/losses...leading to a larger eventual correction (?), when policy makers do not have the ability to continue to intervene?
I have long held that as the fact change so should your portfolio. In this market the set and forget Balanced/ Growth portfolio are not optimized for return but to diversify risk assuming asset classes are not correlated. Maybe they are?
I prefer a more active approach around risk optimization rather than return maximization. Simply put, can I get the same or a better return but with less, say 1/4 of the risk?
Finally Gold. Ignored by many and not part of most portfolios unless the manager bought Newmont or Northern Star as part of their ASX allocation. With all sorts of risk globally in trade and monetary policies, this is a real asset that has been purchased by reserve banks globally, and those who may not have trust in other assets.....note the long queues at Bullion exchanges. We see support for current prices and if we were a producer of gold, with our costs in control, our economic resource expanding (higher gold price = lower grade cutoff) and an increasing price for our product, we would be very enthusiastic about our balance sheet and P&L for the next 12 months

Thanks to Shaw & Partners for a most excellent day out to Rottnest Island to watch the Start of the kayak race to perth called "The Doctor'

Credit Suisse
If an Investment bank falls in the Global Eceonomic Forrest, and no taxpayers are there to fund the break up, did it fall.

The consequences will take some time to appear, but it is a substantial part of the global financial ecosytem. A good time to know where your portfolio exposures are.

Democracy - something you cannot take for granted?
I watched this get painted a week ago.
There are times we take for granted our right to self determination, that the Police will enforce the law, that we will have rights upheld, freedom of thought and access to due legal process.
I wish those younger democracies wanting to 'protect their freedoms gained' all the best, and those sent to fight in a battle they do not necessarily believe in, a swift end to hostilities.
Utter madness what is going on in Ukraine.

Meg O'neill - CEO Woodside

“I think this is a change that’s going to be with us for decades, honestly,” O’Neill said of the commodity shock ripping through global markets.

“When we talk to customers, they want affordable energy, they want lower carbon energy, but first and foremost, they want reliable energy. And I think this is going to cause the world to think really hard about energy security, and where we buy energy from.”

Yep.. The basis of any succesful Economy is reliable energy

A volatile week. Our investment thesis, 'do not sell into a panic'
Understand what you own, why you own it, and take a longer view

If you have $100,000 in a term deposit, earning 0.5%, and inflation is 5%, are you paddling your boat backwards upstream?
Maybe taking no risk, is risky?

Pop the Bonnet.
Interest rates on the rise, or will something else trigger a slow down, and cause rates to remain low? Either way, it is a god time to make sure you are positioned to benefit from any changes, and also ensure you are not overly exposed to areas or investments that may struggle.

I read this the other day, and think it is very relevant

John Hussman of Hussman Funds on "The folly of ruling out a collapse"

‘It may be the greatest collective error in the history of investing to pay extreme multiples for extreme earnings that reflect extreme profit margins and extreme government subsidies, while imagining that those multiples also deserve a “premium” for depressed interest rates that reflect depressed structural economic growth.’ Or it may not.

Will 2020 be remembered at the year of the great Toilet Paper wars?

Fighting in the streets? Bootleg toilet paper being shipped in across the border. Armed guards in the hygiene aisle?

In every good panic there are opportunities. Lift your eyes, rmember to maintain good hygiene, and set your portfolios for a recovery.

Lets face it. If you are a catastrophist, and this is the end, what is the use of having a pile of cash you can not spend, and a house full of toilet paper?
What you should be doing is stocking up with beer and ice!!

Risk v Return....simples

Why we are all being forced up the risk return curve

If I want to buy the newsagent business, the first thing I need to do is to work out what my RETURN on investment will be.

In other words, if the newsagent makes $10 a year after tax and he wants $100 to sell the business it’s simply a price times earnings multiple of 10….. a PE of 10.

Now if I am getting 10% interest on my bank deposit there is no way I am going to give the Newsagent his $100 simply because of RISK.

The money in the bank has minimal risk and requires no effort.
Now if I am getting 1% on my bank deposit it means I’m getting 10 times more for my money by buying the newsagent.

Risk simply starts from the lower end with Government bonds and rises to highly speculative (eg new mines) investment.

Low risk should equal low return!