After highs, pot stocks have come back to earth – John Collett SMH 30/06/2019

Shareholders in many of the cannabis companies to have listed on the Australian sharemarket in recent years are licking their wounds after the initial euphoria surrounding medical cannabis gives way to disappointment. Cannabis has been one of the hottest sectors of the market, after rapid growth in consumption of medicinal cannabis and legalisation of its recreational use in some parts of the world. The local industry started to gather steam after the government legalised patient access to Australian-grown and manufactured medicinal cannabis in 2016. The sector last year received a further boost when Australia lifted legal restrictions on the export of medical cannabis. That sent share prices sky high as day traders and short-term investors looked to cash in on the action. Dozen of cannabis companies – from cultivators to those developing medical cannabis – raised capital by conducting initial public offerings on the Australian Securities Exchange. Their shares initially made stellar gains for those who invested in the companies. However, the share prices of most of the companies in the sector have since dived. Many do [...]

By |2019-06-30T10:10:59+10:00June 29th, 2019|PIG|0 Comments

The future of CHESS going blockchain

ASX has announced that CHESS will be replaced with distributed ledger technology (DLT) in early 2021. While CHESS’s average monthly service availability over the last five years has been 99.99%, ASX states that the new DLT system (commonly referred to as ‘blockchain’) will improve upon CHESS and “provide a broader range of benefits to a wider cross section of the market”. Some of the main guiding principles for the project include providing greater control to issuers and end investors, taking future needs into account, and ensuring the new system is accessible, available, and reliable. We’re excitedly following Australia’s Consumer Data Right bill on open banking, and we hope to be able to integrate with CHESS (or its replacement) in the near future. (source: Sharesight)

By |2019-05-31T04:08:53+10:00May 31st, 2019|PIG|0 Comments

NBN Status – An excellent summary of the mess we are in.

It's the vision, stupid! Why we need Better Broadband By Laurie Patton Monday, 13 May, 2019 While neither side of politics is saying much about our increasingly maligned National Broadband Network during the election period, the fact is Australia is falling behind in the race to leverage the benefits — economic and social — of an emerging digitally enabled future. “It’s the economy, stupid” is the slogan attributed to James Carville, who was Bill Clinton’s campaign strategist for his successful 1992 US presidential bid. It was about creating a clear campaign focus in the minds of potential voters. In 2015, newly appointed prime minister Malcolm Turnbull similarly coined the term “innovation nation” to describe what he saw as a pressing need to make Australia more innovative and agile — and an issue that would differentiate his approach to government. Turnbull’s problem was that two years earlier, under pressure from his predecessor Tony Abbott, he had laid down tracks leading in the opposite direction. Dumping a full-fibre, fixed-line nbn network in favour of the so-called multi-technology mix (MTM) model has seen us fall from around [...]

By |2019-05-13T05:23:39+10:00May 13th, 2019|PIG|0 Comments

More on Yield Inversion

MORE ON YIELD INVERSION The following points came out of PIG’s April 2019 meeting. Yield curves as shown in the Forum show rate inversions in USA and Australia. In USA a rate inversion typically precedes a recession by 15 months but in Australia the linkage is not as definitive. A look at bond mechanisms showed the following relationships:  Bonds yields (Govt in this example) are inversely related to bond value. If bond yields fall, bond prices increase. Conversely, if bond yields rise then bond prices fall.  USA and AUS monetary policy post GFC was to stimulate the economies by increasing money supply and decreasing interest rates.  USA Federal Reserve did this by buying bonds in the open market. Bond prices lifted, Govt funds were thereby injected into the economy (quantitative easing).  In AUS the RBA seems to prefer public announcements via the management of the cash rate that influences the economy and perhaps some money supply management.  In USA in early 2018 the FED commenced quantitative reduction with the effect that interest [...]

By |2019-04-11T23:38:03+10:00April 11th, 2019|PIG, Portfolio|0 Comments

Yield Curve Changes

We have discussed yield curves at several PIG meetings and noted their conventional, upward slope from low short term rates to higher long term.  In recent weeks there has been a rare shift in the short term to below the medium term rates.  This has happened mostly in the US but Australia also shows this trend although at a lesser difference.  US experience has been that forecasters link inverse yield curves to a declining equities market. I am attaching the latest yield curves for the US and Australia and would like to discuss their position at next week’s PIG meeting.

By |2019-04-11T23:36:30+10:00March 27th, 2019|PIG, Portfolio|0 Comments

Lithium is finite

Lithium is finite – but clean technology relies on such non-renewable resources Parakram Pyakurel, Southampton Solent University Until we cut consumption, we will only shift problems from one natural resource to another. Replacing conventional cars with electric cars A quick calculation shows that, if all conventional cars (those using petrol/gas or diesel) were replaced by electric cars, the world would run out of lithium in around five decades. I take the total amount of lithium from the US Geological Survey, which estimates there are currently 14m tonnes of proven reserves worldwide. I used industry figures for the total amount of passenger cars sold worldwide – about 69m in 2016. That same year, less than a millionelectric vehicles were sold, even including plug-in hybrids. Now, if we imagine a future where all passenger cars were electric and the number of cars sold per year remains constant at 2016 levels, almost 69m (technically: 69.46m minus 0.75m) electric cars will have to be produced each year even at a very cautious estimate. Our assumption here that the demand of cars will remain constant is actually [...]

By |2019-04-11T23:37:39+10:00January 14th, 2019|PIG|0 Comments

RotoGro: the triple threat poised for Canada’s recreational cannabis

RotoGro: the triple threat poised for Canada's recreational cannabis market ASX ANNOUNCEMENT 29 OCTOBER 2018 RotoGro International Limited (ASX:RGI) has today entered into a definitive share purchase agreement with Valens GroWorks Corp. (CSE:VGW) to acquire all of the issued and outstanding shares in the capital stock of Supra THC Services Inc. The development is a major coup for RGI, with the SPA giving the company cultivation, technology and agricultural services that generate revenue in their own right. Under the agreement, both RGI and VGW will collaborate on an offtake agreement for the sale and purchase of cannabis produce at the new RGI facility. Thanks to the SPA, RGI is a unique ‘triple threat’ when compared to market peers. This is a particularly advantageous development for the company, with key analysts already flagging the potential for a huge supply gap in the Canadian recreational cannabis market. A recent report by the C.D. Howe Institute projects that current suppliers will meet just 30-60% of the nationwide demand (610 tonnes). Anindya Sen, who is an economics professor at the University [...]

By |2018-11-07T10:10:16+10:00October 31st, 2018|PIG|0 Comments

Hgh Frequency Trading

ABC Radio National – Background Briefing Attack of the algorithms Robot Traders – High-Frequency Trading There's mounting concern in the world's financial markets about the influence of High Frequency Trading. This so called 'robot trading' was responsible for the Flash Crash of 2010 and in August this year, the US company, Knight Capital, lost $440 million when a trading algorithm 'went rogue'. Robot traders are dominating stock markets using high speed computer algorithms. Human traders and government regulators can’t keep up, and markets could be one programming glitch away from the next big crash. Stan Correy investigates. Program Audio ______________________________________________________ ABC Background Briefing is daring narrative journalism: Australian investigations with impact. Our award-winning reporters forensically uncover the hidden stories at the heart of the country’s biggest issues. ______________________________________________________

By |2018-10-31T06:23:59+10:00October 30th, 2018|PIG|0 Comments

Wesfarmers Coles demerger

The Wesfarmers Coles demerger is certainly worth discussing, particularly considering the size of the Coles Listing coming within the top 30  ASX companies. Some items of interest/concern – The Coles Board expects to have a dividend payout ratio of 80 to 90 per cent. The New listing will be carrying a debt facility of $4 billion. What is going to be the future direction of Wesfarmers post demerger. In a year or two will Wesfarmers get Coles to buy Kmart and Target from them The continuing impact of on-line shopping on bricks and mortar retail outlets What is the real reason for the demerger as I find some of the verbiage by Wesfarmers a  little contradictory – ie: “Demerging Coles shifts our investment weighting and focus to businesses with higher growth prospects” whilst in the next paragraph they say “Coles is well positioned to grow as a defensive business with strong investment characteristics” Additional issues to keep in mind with such a large new listing coming to the market is that Investment Funds managers have to re [...]

By |2018-10-15T07:52:08+10:00October 14th, 2018|PIG, Portfolio|0 Comments