THINKING OUT LOUD

Still Bullish

De-Equitisation & Unloved

April 16, 2019
by Rob Zdravevski

I am quite (very) bullish on global equities (that includes Australia). Generally, I feel equity markets are fair value but this call is based on momentum, trends, price action and money flow.

You can follow some of my general views on Twitter as well @KarriAsset or interested clients can call me.

The de-equitisation theme has been notable over the past decade and it still remains intact. There is less public equity available.

The “pie” has and is diminishing; whether companies have been taken private, chosen to remain private (lack of new issuance) and/or the huge conduct of share buybacks has led to a lower amount of shares available.

This is also known as scarcity.

Furthermore and rather subjectively, equities have remained so “un-loved” that I can’t help believe that a new wave of monies flows into the asset class in “sympathy” of unattractive bond markets and declining real estate assets.

Don’t ask me for qualitative proof. Put down these views to experience and the observation of history.