Remember the saying ..." If u dont appreciate your good stuff then someone else may take it " ....Kiwisaver contributions make us all appreciate our great companies without many knowing about them ...
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Interesting chart
Wonder what the big thing will be next year when AI has run it’s course
Food security and supply. Just a casual observation yesterday farmland has doubled in value in AU. Interest rates have long been a farmers biggest cost. Watch farmers lower inputs as costs soar with predictable results. Any industry that can produce low cost foods will be worth a look, maybe some advancements in micro brewing and lab grown?
I thought inflation, interests rates and cost of doing business will come down before 2025. It's not going to happen. According to S&P Global forecast, Inflation unlikely to return to Reserve Bank’s target until 2026.
https://thewest.com.au/business/agriculture/australian-farming-prices-almost-double-in-three-years-c-11103209
Farmland prices have almost doubled over the past three years, according to new data from the Australian Bureau of Agricultural and Resource Economics and Sciences.
https://www.abc.net.au/news/2023-06-28/cost-of-living-hikes-hit-glenorchy-businesses-customers/102530312
https://thewest.com.au/business/economy/inflation-unlikely-to-return-to-reserve-banks-target-of-2-to-3-per-cent-until-2026-sp-global-forecasts-c-11047426
- In short: Small business owners in Hobart's northern suburbs are bracing themselves for the new financial year, as electricity and rate costs increase
- What's next? One council has relaxed penalties for late payments in recognition of tough times
Inflationin Australia is unlikely to return to the Reserve Bank’s target range for another three years, according to S&P Global, which remains positive about the ability of the home loan market to handle even more rate hikes.
https://www.9news.com.au/finance/rise-in-business-collapse-insolvency-interest-rates-inflation-cost-of-living-explainer/ca18acb7-eeba-4a4c-b08c-a060e998847e
A recent analysis by NAB shows there has been a bounce back in businesses collapsing with a huge 30 per cent rise in insolvencies in 2022 after a slowdown during the COVID-19 pandemic.
But with economic headwinds placing pressure on Aussie consumers and businesses alike, experts are worried there will be a far higher rise in collapses in 2023 as companies face a looming recession.
It appears Aussie farm prices are about half what they are here per hectare. Lots more land and different climate I suppose.
I do think people are too negative on the NZ market. There's this one listing for example, USF.NZX, that just reached an all time high in the last 5 minutes.
I don't know what it's about - some food producer I guess. It includes Apples and chips and a whole bunch of other things I don't understand (and don't have to fortunately).
USF is S&P 500 Index Fund of Vanguard as traded on NZX thru smart shares
"some food producer I guess" hahaha. Funny bobdn.
https://www.cnbc.com/2023/06/28/powe...-meetings.html
Federal Reserve Chairman Jerome Powell talked tough on inflation Wednesday, saying at a forum that he expects multiple interest rate increases ahead and possibly at an aggressive pace.
“We believe there’s more restriction coming,” Powell said during a monetary policy session in Sintra, Portugal. “What’s really driving it ... is a very strong labor market"
The fear of job loss due variously to mechanisation, automation, computerization, or AI has been a recurring panic for hundreds of years, since the original onset of machinery such as the mechanical loom. Even though every new major technology has led to more jobs at higher wages throughout history, each wave of this panic is accompanied by claims that “this time is different” – this is the time it will finally happen, this is the technology that will finally deliver the hammer blow to human labor.
And yet, it never happens.
We’ve been through two such technology-driven unemployment panic cycles in our recent past – the outsourcing panic of the 2000’s, and the automation panic of the 2010’s. Notwithstanding many talking heads, pundits, and even tech executives pounding the table throughout both decades that mass unemployment was near, by late 2019 – right before the onset of COVID – the world had more jobs at higher wages than ever in history.
Nevertheless this mistaken idea will not die. And sure enough, it's back
This time, we finally have the technology that’s going to take all the jobs and render human workers superfluous – real AI. Surely this time history won’t repeat, and AI will cause mass unemployment – and not rapid economic, job, and wage growth – right?
No, that’s not going to happen – and in fact AI, if allowed to develop and proliferate throughout the economy, may cause the most dramatic and sustained economic boom of all time, with correspondingly record job and wage growth – the exact opposite of the fear. And here’s why.
The core mistake the automation-kills-jobs doomers keep making is called the lump of labour fallacy. This fallacy is the incorrect notion that there is a fixed amount of labor to be done in the economy at any given time, and either machines do it or people do it – and if machines do it, there will be no work for people to do.
The Lump Of Labor Fallacy flows naturally from naive intuition, but naive intuition here is wrong. When technology is applied to production, we get productivity growth – an increase in output generated by a reduction in inputs. The result is lower prices for goods and services. As prices for goods and services fall, we pay less for them, meaning that we now have extra spending power with which to buy other things. This increases demand in the economy, which drives the creation of new production – including new products and new industries – which then creates new jobs for the people who were replaced by machines in prior jobs. The result is a larger economy with higher material prosperity, more industries, more products, and more jobs.
But the good news doesn’t stop there. We also get higher wages. This is because, at the level of the individual worker, the marketplace sets compensation as a function of the marginal productivity of the worker. A worker in a technology-infused business will be more productive than a worker in a traditional business. The employer will either pay that worker more money as he is now more productive, or another employer will, purely out of self interest. The result is that technology introduced into an industry generally not only increases the number of jobs in the industry but also raises wages.
Think of what it would mean for literally all existing human labor to be replaced by machines.
It would mean a takeoff rate of economic productivity growth that would be absolutely stratospheric, far beyond any historical precedent. Prices of existing goods and services would drop across the board to virtually zero. Consumer welfare would skyrocket. Consumer spending power would skyrocket. New demand in the economy would explode.
Entrepreneurs would create dizzying arrays of new industries, products, and services, and employ as many people and AI as they could as fast as possible to meet all the new demand.
I fully agree with everything you wrote, bring on the progress! Here's a video on youtube I came across one time that's somewhat humorous.
It's worth noting there is a legitimate argument for regulation of AI, since it could pose an existential threat.
It doesn't. Throw out your terminator dvds and spend an hour looking at your toaster. You will sleep better.
Interestingly though... reserve bank policy is to fight deflation using any means necessary.
Which could mean printed money with no inflation consequences, which can be distributed more fairly to the population than currently.
It's sure going to be interesting & you could be correct re the outcome but no one really knows of course. I think some of your assumptions are incorrect.
The basis of job losses isn't based on a fixed amount of Labour required. It's based on the speed of change that is coming and will humans be able to adapt quick enough if their job is made obsolete. Machine learning is only going to accelerate and what occurred over 150 years with industrial revolution could happen in less than 15 years this time.
Will AI create more human jobs than it removes? I personally doubt it. AI will further consolidate wealth within the high tech companies and their power as they have the financial capacity to invest and develop or buy out others that have breakthroughs. These tech companies themselves are huge employers but it will be other industries that they absorb into tech is where the real 'damage' will be done.
Perhaps it's the transitional period that will be the rockies and after a while the expansion period you describe takes over.
What new jobs & new industries do you think AI will create new human jobs in?
Anyway it's all conjecture and it will be interesting how it all pans out, we will know soon enough and everyone is entitled to their own outlook to the future.
AI infrastructure and training models is currently a huge expense and is predicted to get more expensive over time.
The owners of this infrastructure could make unjustified demands from their own users to further limit competition and extract more revenues.
Strangely enough Sam Altman, Eric Schmidt etc don't include that as one of the key risks here.. ;)
Initially it's true that the companies that develop AI will probably have monopolistic pricing power, but regardless the consumers will be better off than if they had decided not to. There's nothing wrong with a company having supernormal profits over a set period if they are the ones to take on the risk by developing technology, patent law exists in order to incentivise innovation (I do think patent law does currently go overboard though).
In the long run, competition between firms should result in this monopolistic pricing power being subsided and prices will continue to fall.
The main thing is that even where a monopoly/oligopoly is created, consumers still will be better off than prior to the creation of the technology.
I think you meant to reply to SailorRob, but anyway the point is that throughout history jobs have been made obsolete due to technological developments, and the same arguments you are making have been made constantly throughout history to stop the progress.
It's the idea that it is very, very difficult to be able to predict what jobs will be created after jobs are lost, but still throughout history there have been more jobs created than lost. Could this time be different? Maybe, but I wouldn't count on it.
Eventually we could get to a point where the world is so absurdly wealthy that working a job is somewhat unnecessary and unemployment will be very high. But then again, we live in a world that comparatively to history is absurdly wealthy but yet still many people have to work to keep up their ever-growing lifestyles.
Innovation is a result of people trying different stuff in order to produce new goods and services, or the same goods and services but cheaper, in order to make as much profit as possible.
If they are creating a new good or service, awesome they have just created a new market where both the firm and the consumers are able to gain a surplus, even if they are producing at a point which is deemed inefficient. If they are able to produce an existing good/service at a cheaper price, awesome they have a competitive advantage allowing them to undercut other firms increasing surplus for both consumers and the firm.
What about the concept of open source? On wiki it says it delivers savings for the consumer, quickens innovation and brings in diverse perspectives.
Daytr wrote: "Will AI create more human jobs than it removes? I personally doubt it. AI will further consolidate wealth within the high tech companies and their power as they have the financial capacity to invest and develop or buy out others that have breakthroughs. These tech companies themselves are huge employers but it will be other industries that they absorb into tech is where the real 'damage' will be done."
Quite agree. Rise of AI could lead to under investment and shortage of staff in other vital areas.Besides,one of the main factors for high cost of doing business in many organizations is high cost involved in technologies.
Consumer welfare and shareholder welfare are the same thing, the richer shareholders become the more cool goods and services are produced for the masses of consumers.
As a business owner or shareholder it's in your own interest to sell to as many customers as possible. The largest market in the world for any product is the entire world, all 8 billion of us. And so in reality, every new technology – even ones that start by selling to the rarefied air of high-paying big companies or wealthy consumers – rapidly proliferates until it’s in the hands of the largest possible mass market, ultimately everyone on the planet.
Your phone Panda... cool gadget.... cool for you cool for shareholders
One potential weakness in your argument is that a percentage of consumers you refer are out of work. Overall the net profits may increase but potentially into less hands. Further consolidation of wealth is what I think is the likely result & the trickle down economics you refer to will narrow.
Everyone who is out of work still consume though. Someone buys them iphones.
But yes anything is possible, perhaps with so many out of work but living well due to the abundance of goods and services, these folk could support elderly or other community initiatives massively improving society.
I read a really good article on AI recently which I just cannot find at the moment but it should be mandatory reading. Potential for growth as a species is exponential and like todays phone AI will in time become a part of your everyday life. Imagine our greatest minds working alongside AI and the possibilities are endless. The only ones spreading fear are the ones looking to control the ownership or make money from another perspective.
If it does destroy the world though I wouldn't blame it, half of the USA voted Trump at one stage.
Actually SailorRob, re not this but re three waters but I don't remember where it was, I agree with you, it's a very bad idea. Just look at the state of the roads which are entrusted to central government, pot holes everywhere, hardly safe for 100K. If they're in charge of water we can expect the same cost cutting and bad or absent quality. Local people have an interest in getting it right.
(obviously I don't live in Wellington).
Reminds me of this clip. Government expands one tiny step at a time, until you have full blown tyranny
"Things get to terrible places, one tiny step at a time.
If I encroach you and I'm sophisticated about it, I'm going to encroach two millimetres. I'm going to encroach right to the point where you begin to protest. Then I'm going to stop.
Then I'm going to wait.
I'm going to encroach again, right to the point where you protest. I'm going to stop. And then I'm going to wait.
I'm just going to do that forever.
Before you know it, you're going to be back three miles from where you started. And you'll have done it one step at a time. You'll ask "Oh, how did I get here?".
The answer is "Well I pushed you a little farther than you should have gone, and you agreed."
AI work certainly end many white collar jobs lawyers / accountants / many paper pushers etc ... certainly great for lowering costs for consumers .. more white collar to work in blue collar jobs AI won't be as highly used ..basically many of the office workers or commercial office space replaced by data centres ... much more power will be needed ... small nuclear plant outside Auckland smartest longer term fix ...
I guess the whole next age in human development will be no different to the ones in the past ...the Stone Age, the Bronze Age, and the Iron Age...
Still one must think do we really need 10+ Billion humans in this next age ?
Main thing is, most of us, if not all of us, are going to run out of life before we run out of money. So it's imperative that we have fun along the way.
https://www.smh.com.au/business/markets/us-stocks-rise-on-oil-window-dressing-20090630-d2qb.html
"Fund managers are building up their portfolios before the quarter ends on Tuesday in a ritual known as "window dressing" by selling some of the quarter's losers and scooping up the winners. This move bolstered stocks as well."
It's funny that some people think other planets are a viable solution.
Sorry but robots are much better at space (in fact miles superior), humans need all that life support ironically made viable by machines like oxygen, temperature control.
I can predict that humans will never leave our solar system.
The proposed increase, from 33% to 39%, will bring trusts into line with the top marginal tax rates for individuals from 1 April 2024
Investors are realising that the impact of the widening of this tax rate gap on net returns will be felt both immediately and exponentially over time, and we have seen an increase in enquiries into the benefits of investing via the PIE investment vehicles versus investing via directly-held assets
“For those investors who use a family trust as their vehicle for investment assets, now is a good time to seek independent tax advice on the structure of your investments.
A trust investor accessing term deposits or cash assets directly at the same rate of 6% and paying the higher marginal tax rate of 39% will now earn a net rate of 3.66%. Put another way, for the same $1m investment, they would generate net income of $36,600 for the year; $6,600 lower than from the PIE assets
https://www.interest.co.nz/investing...benefits-using
Im guessing this will have ramifications on people investing directly in the stockmarket via trusts
Already listed PIEs had advantage for Individual Investors at rates higher than 28% ....now Trusts have also joined to enhance that advantage ....KFL shud shine more and why not ...as one saves 11% tax by choosing KFL over DIY ..especially for Trust Investments ....Percy shud advise his trust to have a look at listed PIEs tax advantages over direct investments in stocks ....Now such direct investments will have to pay further tax of 6% on top of already deducted 33% for directly held dividends :eek2:
My family trust is the vehicle for our investment assets, and where these are invested for income is heavily weighted to PIEs. But it begs the question whether the PIE rate for Trusts (or even individuals) will remain at 28% going forward.
Once the current proposed changes are enacted (to come into force on 1 April 2024) and are bedded in then if a Labour/Greens government prevails in October I expect the Pie rate to be reviewed to 33% for individuals/trustees, especially given that those persons for whom that exceeds their marginal rate can declare that income and receive a refund at year end subject only to lodging their tax return. Given a government which will be desperate for tax revenue to support their income redistribution initiatives that would be entirely unsurprising and completely foreseeable.
I have KFL in a trust account. Every time I read the comments section on interest.co they largely see interest rates rising further and pain through the whole economy next 12 months, regardless of election results. How do you think all of those growth stocks that have been following the property market down with interest rate rises will fare?
If you look at news this week you have lower asking prices in June, rising stress on loans and agents predicting a flood of listings in the next 6 months. Is this just the doom and gloomers?
Growth stocks following property down? USGs been doing well for me, its up almost 40 per cent year to date.
Are there other growth stocks out there I'm not aware of?
Sounds like I'm winning - I'm not. Truth is my overall per annum returns over the last two years is just 4.5 per cent net of fees and taxes. Well below the rate of inflation. Return of the Sp500 is 3.4 per cent in that period pa. My "out performance" is the slide in the NZD.
Tom Keene last night revealed that SPX has only returned 3.4 per cent per year over the last two years. I was shocked! Such low returns in a nasty high inflationary environment. Surely I've done better! Nope, not really.
Quite the opposite I find. Some pretty extreme points of view on there.
Ok not all of kfls holdings are down. IFT is a standout.
Just dont worry ....Have faith in KFL portfolio mate ....it will be just fine ...We will discuss how fine in 12 months ...lol
Also please note that KFL portfolio is largely unaffected by NZ local economy ...when economy bottoms stocks are already 25% up from bottom .
That is 11% premium becoming almost 8% discount ....nothing to do with portfolio performance but with market dynamics ....I was crying hoarse that any premium is not justified and will not last ...similarly I know this much discount is not justified and wont last either ...1-3 cents is normal discount
my roughly weighted index i created of the performance of there stocks reflects there gross performance roughly , the fact there stock price is down 30% against a + performance from the portfolio gross suggests to me the dividend's are un sustainable in the long run as the continual payout of these div's + all the horrendous expense's to the fund manager is what is dragging down the nav and hence the stock price .
I don't agree with your analysis ....KFL has gone thru many turmoils before too ie GFC times and it has managed to come out INTACT with its current distribution policy of 2% quarterly NAV . It's still managed to have positive capital too while doing so ...it started from $1 value subscription ....it's now almost $ 1.40 after doing what it's doing for almost 20 years now . Fund managers are doing their job well consistently outperforming NZX50G for last 5 years or more
I am more than happy investor since 2010 and will continue to have my faith in them .
Trickle down economics was, and still is, a great smokescreen to justify a regressive tax system under which a working class sap pays a greater percentage of income and assets as tax compared with wealthier owners of land and capital. We now suffer the consequences of falling home ownership and diverging health outcomes based on family wealth.
I am inclined to agree, in a rising market even at a slow pace it was very stable. I preferred it over term deposits. The last 3 years have proven to be an anomaly. Yesterday a lot of core holdings had a reasonable day, where do you see todays nav Alok?
Shud be around $ 1.4050 ....Its core holdings will do well over next few months and years and we will be back in business as usual ...though I am not expecting premiums to come again and they should not also as thats not healthy sign
PS : MFT / SUM will lead its NAV up ....imo
Not only in social terms but in investment terms also ...like NZ tax system was so skewed towards residential property investment that all thought of becoming land lords was the only way to riches and it was too till it got fixed ...from April 2025 when all investment mortgages in property becomes non deductible expense ...it will become very clear that property boom was Govt policy doing majorly
Residential landlords in a country with low incomes and productivity (esp, when compared to australia).
Also, low tax, but what has that done for us.
Nonsensical retirement policies where everyone depends on the govt rather than encouraging kiwisaver, so businesses have to go overseas to find capital.
Not all investment mortgages, would agree the majority though.
If rates are the prime drivers of the stocks then anticipating future rates path will help one anticipate future market trend ....
Latest ASB report on RBNZ path ahead says 5.5% is the peak and they expect RBNZ to deliver first rate cuts in May 2024 .
If that holds true or actually eventuates then markets will be buoyant from last qtr of 2023 and almost near or over all time high by May 2024 .
One can miss timing by maximum a quarter but path of downward rates is almost a certainty ....thus it can be safely assumed that time of the stocks shining is round the corner ....buying the dip should be the mantra ahead
The fees are pretty insane in my opinion, the fund would need to outperform quite a bit for it to be worth it. I'll be staying away.
Management Fee: 1.25% (plus GST) per annum of the gross asset value, calculated weekly and payable monthly in arrears. The fee reduces if the Manager underperforms, thereby aligning the Manager's interests with those of the Kingfish shareholders. For every 1% underperformance (relative to the change in the NZ 90 Day Bank Bill Index) the management fee percentage is reduced by 0.1%, subject to a minimum 0.75% per annum management fee.
Performance Fee: Fisher Funds may earn an annual performance fee of 10% plus GST of excess returns over and above the performance fee hurdle return (being the change in the NZ 90 Day Bank Bill Index plus 7%) subject to achieving the High Water Mark ("HWM"). The total performance fee amount is subject to a cap of 1.25% of the adjusted net asset value (prior to performance fees) and is settled fully in cash.
You obviously don't like pies.
The only way high fees are worth it is for geared/aggressive funds. I do like those, but not when interest rates are high.
https://apnews.com/article/stock-mar...d1c054981575f3
"Other markets around the world fell more sharply following the latest discouraging signal from China’s economy. Growth in China’s services industry slowed by more than economists expected last month. It’s the latest evidence showing the world’s second-largest economy is stumbling in its recovery following the removal of anti-COVID restrictions."
Meta launches Instagram Threads in a direct challenge to Sharetrader
https://www.cnbc.com/2023/07/05/meta...g-twitter.html
ASB has lifted a number of fixed-term mortgage rates, including the key one-year rate past 7%
https://www.1news.co.nz/2023/07/03/m...e-rate-past-7/
see the 10 yr almost at all time high this cycle taday ...... more rate rises ahead ?
New Zealand households are getting poorer as high interest rates cut the value of their properties and other investments.
Statistics NZ’s March data, released Thursday, showed household net worth had fallen for a fifth consecutive quarter, driven by a 2.6% drop in owner-occupied property values.
A $42.7 billion (or 1.9%) decline in household net worth during the first three months of 2023 brought the annual decline to $175 billion, or 7.3%.
https://www.interest.co.nz/personal-...cline-pandemic
maybe they should invest in kingfish ?
If everyone else is raising why would we not? RBNZ over 25 years average is 6.9% and over a longer time probably higher. I remember people quoting 9% as average pre 2008
Great post mate.
Yes rates are the prime driver and the simple ability to be able to predict them will allow you to time the market.
All you need to do is follow what ASB say and you will have unlocked the key to being able to predict the market.
I mean just look what they were saying in 2015,2016,17,18,19,20,21,22 and 6 Months ago.
The look what BNZ said and Tony Alexandra, Westpac...
The list goes on.
Just listen to what the bank says is going to happen and buy and sell accordingly.
Unreal people are so dumb not to just follow this simple method to riches.
Within one quarter it's almost certain the path for rates is down.
Good on you Sport, keep it up.
" Lenders charged Kiwis $3.8 billion in home loan interest during the first quarter of this year, according to figures from the Reserve Bank.
The interest charged is the highest recorded since the Reserve Bank began collecting the data in 2014."
This is when only minority refixed on higher rates so far ...next 2 quarters shud create newer records ...shows how higher absolute mortgage values due to higher buying prices makes even moderate hikes work harder then before ....
Unlike u many like me look at longer term picture and position accordingly ....Already record interest payments going from mortgage holders's pockets ...it will further accelerate ahead on its own when more mortgages gets re fixed at much higher rates ...RBNZ will have a very high threshold to raise rates ...bonds will seesaw on daily basis ...but US markets shud be more worried sitting so close to all time high ...NZX is and will be more steady ...IMO
orr said at last meeting mtge's should not need to rise from here as we are not raising the ocr anymore
so now we have all big banks raising mtge rates so they ethier dont listen to orr and just follow bond rates or they dont believe rbnz wont raise again and are just raising in advance of orr raising ocr again ( prob not next meeting but later )
According to the banks the rise in rates are due to the rising costs of offshore funding. Seeing only about 15% of their funding comes from offshore it's pretty hard to believe. Bank's margins had been squeezed as they absorbed some of the RBNZ rate increases. I would suggest it's the banks pushing those margins back out.
It also appears by the look of the curve they are countering demand for those rolling onto the new rates from locking in short term & enticing them to go 3 - 5 years.
With most predicting the Reserve Bank will lower rates in the first half of '24 many home loan holders probably only want to lock in short term.
Looks like more people are falling for the 3 year lure - https://www.interest.co.nz/personal-...interest-rates
nz market getting savaged today , bond yield's at record high's this cycle
that was a big comeback this arvo by nz market
bull's nz stock's hanging in there
fbu the only notable entry holding up well
bull's multi - baggers have been doing well this week though
meta
duratec
close loop
when stocks do well on a bad tape thats a good sign
Interesting short clip on how Roman emperors one after the other devalued the currency that lead to rampant inflation and the destruction of the empire.
https://youtu.be/qjkwVjpt6jk