The author has been described by News Ltd as an "iconoclast", "Svengali", a pollie's "economist muse", and "pungently accurate". Fairfax says he is a "Renaissance man" and "one of Australia’s most respected analysts." Stephen Koukoulas concludes that he is "85% right", and "would make a great Opposition leader." Terry McCrann claims the author thinks "‘nuance’ is a trendy village in the south of France", but can be "scintillating" when he thinks "clearly". The ACTU reckons he’s "an enigma wrapped in a Bloomberg terminal, wrapped in some apparently well-honed abs."

Tuesday, May 24, 2011

Aussie shares: the mother of all dud investments (S&P/ASX 200 just slipped below 4,600)

Here is a chart of the ASX/S&P 200 since 2005. Today it has slumped below 4600 points again. You get the picture: zero capital growth over the last six years with incredible 15-20% pa volatility. In contrast, you could have banked a circa 5.5% pa return with zero capital risk by putting money into a one year, government-guaranteed term deposit. Of course, there will always be individual companies listed on the ASX that are terrific businesses. If you have a view on a specific business, you might want to become a shareholder. But the overall asset-class performance has been horrible on a risk-adjusted basis over the last three decades.