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At Seneca, we believe that at the core of any relationship is trust. And that trust is earned through consistent excellence and courageous transparency.
Having spent many years working at large organisations, we learned that it’s not the institution that our clients trust, but the people who work there every day. It’s about the careful consideration of each individual client’s unique needs and consistent application of the advisor’s expertise to the changing economic conditions.
As the CFO of one of the world’s leading specialist natural resources investors, and after having employed Luke in a previous role, I’ve been thrilled with the efficiency, capability and service-offering Seneca have been able to offer my SMSF. Relative to the conflicted banks and standard ‘stockbrokers’ they provide me with unique investment opportunities, considered financial advice and most importantly, really tailor their advice to my circumstances and investment preferences. I think their innovative approach is set to really corner the market.
Rob Bishop - CFO, AMCI Investments Pty Ltd
Luke and the team at Seneca have been instrumental in driving returns for our SMSF in recent years. As the CEO of one of Australia’s most innovative organic fertiliser company’s, whilst I’ve been busy operating our business, Seneca has been able to provide us with a diversified set of direct and indirect investment opportunities, provide timely and strategic advice and educate us on our behavioural biases, resulting in excellent compounding returns. We’ve been strong supporters of Seneca since day 1 and enjoy the high-touch, often daily interactions we have with the team and appreciate the respect they show us and our money. We look forward to a long associate with Luke, John, Victoria and the rest of the team.
Anton Barton - Executive Chairman, BioAg
As retirees, the staff at Seneca have done a wonderful job managing our super fund and our additional family financial assets. Their attention to detail, willingness to go the extra mile and friendship is something we value immensely.
Stan W. - Family Office, VIC
The team at Seneca are a refreshing mix of capital markets expertise and client-centric wealth and investment advisory. They have an ability to deeply and quickly understand equity capital market transactions and work with the corporate advisor, such as Cadmon, to devise a client-focused, favourable deal structure, find the appropriate investors and support a company from its first external capital injection through the various stages of development. We continue to enjoy working with Luke, John and the team.
Cameron Low - Managing Director, Cadmon Advisory
Friday 10 Dec 2021
Good afternoon,
The ASX 200 had a pretty strong up-week, adding 1.65%. Utilities, Real Estate, Consumer Staples and Discretionary stocks outperformed.
If I’m gazing into the crystal ball, the things the market is mispricing from my perspective are…
1. The risk of interest rates going up sooner than consensus estimates
UBS think the Federal budget might add fuel to the fire, with the deficit looking c. $57bn better than the same time a year ago and therefore, they reckon there will be c. $50bn worth of fiscal stimulus thrown at voters.
They also see a hard stop to QE in Feb and rates going up in Q4-22 rather than 1H-23 as previously forecast.
2. The COVID recovery in spending is underappreciated
Real consumption is still 5% below the pre-COVID peak and 9% below the US recovery… we’ve still got significant upside in consumer spending, particularly in services.
Friday 03 Dec 2021
Good afternoon,
The ASX 200 finished the week down a bit, healthcare the worst performer (COH -7%, PME -6%) while the large-cap miners forged ahead (LYC +9%, BHP +6%).
I’m running numbers today at 2.45pm as I’ve got a few meetings this arvo.
Despite some miners doing well, gold was the worst-performing corner of the market this week. This was because the Fed said inflation wasn’t transitory and these comments saw US TIPS fall 2%, gold followed.
On the green side of the ledger, a lot of stock-specific issues so I might cover that in the Movers & Shakers.
House Prices
I might be suffering from a severe case of confirmation bias but I loved the below chart from Jarden this week.
It shows the importance of credit availability in driving house prices and plays right into my theory/”fact that the public hasn’t learnt yet”… the only reason you have made money on property is that banks have been willing to lend the incremental buyer, incrementally more money, for 30 years straight.
And for those who think that property mortgage rates are somehow magically disconnected from global bond markets, think again. Aus 10 year treasury yield vs the standard variable mortgage rate over 30 years…
Friday 26 Nov 2021
Good afternoon,
The ASX 200 had a rough day, down 1.75% as a new variant of COVID-19 drove up case numbers in South Africa.
US Futures are pointing down 1.32%, taking a step back though, it is not normally the “known unknowns” that send the market plummeting… I could regret typing this but, I don’t think a covid variant sinks the global recovery. I sense, using my famous ‘3-wines-on-a-Friday-after-work intuition’ that the political winds have changed and it’s all about “living with the virus” rather than hiding from it.
Media
I was back on SBS World News on Wednesday night at 6.30 pm on the telly, covering the stockmarket moves of the day, full interview below:
How good is my new background for the home office! Wouldn’t even know I was wearing board shorts!
Friday 19 Nov 2021
Good afternoon,
The ASX 200 fell 0.80% over the past week (to lunchtime on Friday) with Commonwealth Bank (CBA, -9.1%) and BHP (BHP, -4.2%) causing the large-cap indices to underperform their smaller compadres. I’m not going to both to do the calc but I’d be willing to bet the market might have actually been up this week ex those 2 names given their heavy index weights. Midcap 50 up 1% and Small Ords flat.
Healthcare and technology names bounced back this week as bond yields came off a bit (Aus 5y Government bond yield fell 4.4%, though still up 354% over last 12 months.)
Earnings growth has peaked, but the PE of the ASX200 has already adjusted and ‘the market’ (in aggregate) looks about fair value – if you can buy something with double-digit growth on 18x, you’d probably be uncovering some value
Keep in mind our key tenant of “everything’s relative”. Here’s how the Equity Risk Premium is looking.
Friday 12 Nov 2021
Good afternoon,
The ASX 200 is pretty flat on the week, but up 0.93% today (as I type this about lunchtime.) Resources bounced back this week, with Gold miners the big winner.
Inflation is going up (we talked about this last week) and now gold has broken out of the range.
Gold stocks last week
We own EVN and RMS in the Seneca Australian Shares SMA.
Not all technology companies are made equal
I thought given US technology names reporting at the moment, I’d do a bit of a case study comparison of two “darling” technology names to highlight the difference between high and low-quality businesses.
Peloton (PTON)
Peloton is a subscription fitness business built primarily around a piece of hardware (a spin bike) and exclusive, on-demand fitness content, delivered via its app. It listed in late 2019 at USD $29 and reached highs of $171.09 during the pandemic as at-home fitness demand exploded.
