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
Sunday 15 May 2022
Another pretty miserable week on global markets, the ASX 200 down 1.81%, Resources down 3.91%, Industrials down 1.07%.
When does the market start going up again? Probably when you stop wanting to ‘buy the dip’ and your house is worth 20% less than it is today. Relax, relax, I’m kidding! (sort of).
Markets have already de-rated dramatically. PE on the ASX has gone from 18.5x to 14.5x in 5 weeks. Historically, when 10 yr bond yields have been 3-4% (as they are now), the ASX has traded on 14-15x.
The important context here is EPS is normally slowing at that point… doesn’t look like slowing to me.
In fact, net revisions are accelerating.
Pretty hard to argue the case for an imminent recession when earnings are forecast to rise 23.72% YoY.
Sunday 08 May 2022
The ASX 200 had a rough week, down 3.09% and is likely to drop further with the futures pointing down another 0.71% for Monday.
Back in December last year, I wrote about the RBA being asleep at the wheel and the relationship between the standard variable mortgage rate and the 10-year government bond yield.
Well this week, as you are undoubtedly aware, the RBA woke up and realised that 6% inflation, house prices at 6x income and flat wages growth probably aren’t a great combination for economic prosperity and a happy population.
Here’s the 10-year bond now vs variable mortgage rates vs the RBA cash rate:
The “gap” we talked about in December is even worse now.
Friday 29 Apr 2022
The ASX 200 closed up 1.04% but down 0.51% for the week, not many places to hide.
It was worse earlier in the week tbh, we’ve actually had a really positive Thursday (+1.32%) & Friday (+0.71%). A chart of the ASX 200 over the past 10 days is below for context.
More broadly though, Australian investors should be stoked with their ASX returns in the broader context – we’ve outperformed the US, Europe and Asian indices in AUD terms over the past 3 months.
Australian investing in overseas markets should be wary of a rising AUD according to Macquarie’s 3-factor model below. Perhaps time to hedge those overseas funds and redeem those USD deposits?
The flipside of this is a rising AUD can attract international investors to the Aussie market. We do have some pretty favourable demographics compared to other developed markets.
Friday 22 Apr 2022
I hope you didn’t miss me too much on Good Friday and got to enjoy some downtime over the Easter break. Another short week and another long weekend ahead should have you all in good spirits.
S&P/ASX 200 is down 1.53% as I type this at 2.40 pm on Friday afternoon after US markets were down 1.48% on Fedspeak Thursday night. For the week, the Australian market is down 0.68%.
Despite today’s negativity, the S&P/ASX 200 Accumulation Index made new all-time highs this week, $100,000 invested in 1992 on Thursday was worth a faction over $1,500,000 (assuming dividend reinvestment, no franking).
And despite the headlines, predictions and pontifications over the past 30 years, monthly returns are positive 64% of the time.
Sunday 10 Apr 2022
The ASX 200 index was fractionally down for the week, with technology & related mining names the worst performers, defensive sectors & stocks the best performers. The S&P 500 was down 0.27% on Friday night and the NASDAQ was down -1.34%.
US 10-year bonds were sold off this week, with yields up over 0.30% after the FOMC Minutes were released and some hawkish comments from Fed Governor Brainard. Even before this week’s sell-off, Goldman Sachs pointed out that the 1-month change in rates was a +3 standard deviation event in nominal terms and +2 standard deviation in real terms, moves which have historically been a headwind to equity returns.