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Capital Allocation

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Why central banks are becoming impotent

The power to control the creation of money has moved from central banks to western governments by the issuing of state guarantees on bank credit. What are the implications for investing and inflation?

How are the returns on your equity?

An important ratio for analysing companies is the ‘return on equity’, but while it may seem to be a simple measure of the earning power of a business, it can tell much more.

Companies crying wolf

The market rewards companies it thinks allocate capital well and similarly punishes those who don’t. It tries to anticipate the future and thus the changes in future returns on capital before they happen.

Capital allocation and management ability – Part 2

If a company is growing, with increasing equity and profits, how does an investor know that management and the board are dudding shareholders?

Not all growth is good

As equity holders we love to see companies reporting profit growth. In fact, we become wary if they don't. Find out how the wrong sort of growth can quickly and permanently destroy wealth.

Demographic insights: living longer with low growth

Australia is at a critical point on four fronts - economic growth, capital allocation, public finance and personal management of retirement income. Demographics provides a road map of where we are heading.

Most viewed in recent weeks

Vale Graham Hand

It’s with heavy hearts that we announce Firstlinks’ co-founder and former Managing Editor, Graham Hand, has died aged 66. Graham was a legendary figure in the finance industry and here are three tributes to him.

Australian stocks will crush housing over the next decade, one year on

Last year, I wrote an article suggesting returns from ASX stocks would trample those from housing over the next decade. One year later, this is an update on how that forecast is going and what's changed since.

Avoiding wealth transfer pitfalls

Australia is in the early throes of an intergenerational wealth transfer worth an estimated $3.5 trillion. Here's a case study highlighting some of the challenges with transferring wealth between generations.

Taxpayers betrayed by Future Fund debacle

The Future Fund's original purpose was to meet the unfunded liabilities of Commonwealth defined benefit schemes. These liabilities have ballooned to an estimated $290 billion and taxpayers continue to be treated like fools.

Australia’s shameful super gap

ASFA provides a key guide for how much you will need to live on in retirement. Unfortunately it has many deficiencies, and the averages don't tell the full story of the growing gender superannuation gap.

Looking beyond banks for dividend income

The Big Four banks have had an extraordinary run and it’s left income investors with a conundrum: to stick with them even though they now offer relatively low dividend yields and limited growth prospects or to look elsewhere.

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