Where to from here?

A crucial time is approaching for the global economy and stock markets. The policy induced ‘recovery’ from the credit crisis is now petering out. While this inevitability was hardly consensus opinion months ago, most market participants are now coming around to the viewpoint that the developed world faces a low growth future.

This is the reality currently being priced in to stock markets around the world. It’s the reason why we have been content to be predominantly in precious metals and cash, although that is changing now that value is beginning to appear.

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BHP Billiton – Why so cheap?

Usually, it’s the small cap companies that offer the best value. This can be because they have unproven business models, unknown management, or a lack of revenue diversification. All these things increase a companies’ risk profile and as a result, the company in question can appear ‘cheap’.

But that is not supposed to happen with big, quality companies like BHP Billiton (BHP). The stock is probably one of the cheapest in the commodities space right now. It has unparalleled diversification, the strongest balance sheet and quality assets across a range of commodities.

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Silver – A bullish development

Back in late June we began writing about the silver market and opined that the metal was slowly becoming ‘re-monetised’. That is, we suggested that silver was slowly regaining its place in history as a monetary metal.

A few months have passed so its time for a brief update. Over the past few weeks, there has been some interesting price action in silver. After consolidation for months, it recently ‘broke out’ from a well-defined triangle formation.

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20 Most Profitable

The biggest companies by market capitalisation or revenues are well-known but useless for an investor seeking out quality businesses. So this week, we decided to include a table showing the top 20 most profitable companies on the ASX. 

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