Good afternoon,

Jeez it’s been a busy few weeks at work.  I’m enjoying the work but struggling a bit today after arriving back in Melbourne at 2am this morning (thanks to the fine folk at Tiger for delaying my flight by 2hrs!)

ASX200 got up to 6080 points on Tuesday and has been slipping away since, now trading at 5900 points.  For the week, the market was down 2.25%, with Resources the worst hit, down 4%.  Defensive Property and Healthcare sectors outperformed, however Property has been a pretty poor investment this year, down 7%.

I like to use the post-reporting season window to just take stock a little bit, so here’s a chart of the ASX200 over the past 12 months, it’s up about 200 points on where it was.  I find people are very quick to forget, but the market was stuck in a holding pattern for so long last year, tracking sideways for 3 quarters, largely trading between 5700 and 5800.
And whilst the return of some extreme volatility isn’t necessarily welcome, it’s reasonable to expect the recent uptrend in volatility to continue for a bit longer.  The ASX 200 Volatility Index has a median value of 15 over the past 5 years, what does this mean for index values?  I’d expect a 200-300 point trading range rather than the 100 point range we saw last year, which should throw up a few more opportunities to add value.
Margin Lending
I sat down with Shane Potter from Leveraged to talk about margin lending as a way to potentially bolster your portfolio returns.  I thought I’d get him on as I’ve been getting a few queries, particularly from the younger clients who have got decent incomes but not much capital accumulated yet.  You can click on the image below to view the video.Just for clarity, I don’t advise clients on whether or not they should gear their investment portfolios.  I’m happy to advise on the investments and help manage the geared portfolio, however I leave the higher level decision up to them.If you’re interested in having a chat about a geared investment solution for you, feel free to drop me a line and we can arrange at time to run through the basics.
Costa Group (CGC) has been screening well for months and came through with a result well ahead of market expectations.  Elsewhere, Nearmap (NEA) continued to rise as the market becomes more confident  (post some encouraging results in the last 12 months) that this aerial imaging business will gain some meaningful traction in the US over the coming 12 months.
There is plenty to talk about on the wrong side of the ledger this week. Had to increase the cutoff to over 8% loss.   Retail Food Group (RFG) is in a real pickle with its franchise network.  I’m not a huge fan of franchise businesses (see notes on Domino’s Pizza over the past few years), I like the idea of building brand, not buying it.

Harvey Norman (HVN) proved that there is a difference between bricks and mortar retailers who are adapting to the new world order (like JB Hifi, JBH) and those who are complaining, like HVN.  HVN down 10% over last 90 days, JBH up 6% (with the dividend).

A few stocks going ex-dividend at the moment, which makes some of these results look worse than they actually are.


Data Exchange Network Update
The institutional and investor roadshow begins today, I had the first meeting this morning at 8am with Dean & Peter, walking away impressed and confident they’ll be able to deliver for shareholders.  Below is a link to the Investor Presentation if you want to a have a quick read.Data Exchange Investor PresentationDemand for this initial public offer has been overwhelming to say the least, many multiples of the available stock.   If you are lucky enough to be allocated a holding, scale back is almost a certainty (sorry). 
Have a good week,
LL


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