Trying to hear what's not being said
May 22, 2025 Leave a comment
I’m not surprised by yesterday’s report that British inflation rose.
It’s currently 3.5%.
13 months ago, I wrote about the extreme lows being seen then and that 5% was my prediction (and remains so) to where UK inflation would move to.
And so I think UK inflation will rise further together with other correlated assets and securities.
May 22, 2025
rob@karriasset.com.au
July 10, 2024 Leave a comment
Since my note dated, February 29, 2024 and the subsequent peak in the GBP/AUD, it notable eased lower since.
And a new medium frame, downward trend is developing.
At the very least, I think that the British Pound will decline to the 1.83 mark against the Australian Dollar.
July 10, 2024
by Rob Zdravevski
rob@karriasset.com.au
April 17, 2024 Leave a comment
I am posturing for higher #inflation rates, again.
My expectations (found in my historical posts) for ‘lower’ inflation has occurred and is as good as being completed.
Following up my note dated April 11, 2024, suggesting the irrelevance of the U.K. March inflation report,
While inflation has abated, now it doesn’t matter so much whether this month’s #UnitedKingdom inflation rate of 3.2% is lower than last months (year on year) figure of 3.4%.
Keep in mind, that prices are still rising and I think that is mostly a cause of capacity and supply constraints rather than notable demand.
My thinking is that #UK inflation will move to 5% rather than 2%.
Slowing demand means companies will increases prices for goods and services, in order to maintain their shrinking margins.
April 17, 2024
by Rob Zdravevski
rob@karriasset.com.au
April 11, 2024 Leave a comment
It doesn’t matter if the March 2024 #UnitedKingdom inflation rate falls from 3.4% down to 3% or 2.6%……
This is small beans.
It is nearer the lower end of its travels.
The big call to make is when the #inflation rate is trading at ‘extremes’ to my illustrated moving average, appearing in the chart below.
Much like my American inflation note published yesterday, I think there is greater probability that #UK inflation rate should travel towards 5% rather than 1.8%……
and all that comes with it for interest rates and the equity prices of high growth (unprofitable) companies.
Incidentally, the U.K. inflation rate for March 2024 is due to be released on April 17th.
April 11, 2024
by Rob Zdravevski
rob@karriasset.com.au
Karri Asset Advisors
April 11, 2024 Leave a comment
I would like a reduction in interest rate please……
even though the world’s stockmarkets have risen between 25% and 50% over the past 3 years……
Following such wonderful investment returns, why are equity investors are so hinged on whether central banks will lower their interest rate policy or target?
This wish from ‘collective’ equity investors is most perverse.
What is the genesis and motivation behind this story-telling derived by the strategists and pundits from the investment houses?
Something must not be working well enough for ‘them’ when money is priced at 5.25%.
Are companies and individuals still too leveraged?
Perhaps corporate profits are still under pressure even following the rounds of jobs cuts and cost-cutting measures?
Or maybe, banks can’t make enough of a spread between the interest they need to pay on deposits and the amount they can loan out?
I’d argue that a fair cost of money is around 5%-6%.
And rate cuts are often used to flog a dead horse back into life……
Be careful what one wishes for.
April 11, 2024
December 5, 2023 Leave a comment
My previous post summarised my early 2023 reasoning to avoid the FTSE 100. Whilst that index is only 5% lower since then, the way I look at it, is there was little purpose to being actually exposed to the risk.
Today, the price action tells me that the #ftse100 needs to make a higher high’ to break it out of a consolidation funk.
Should it trade below 7,215, then probability of a move to the 7,030 area increases.
That is a further 5% below today’s level.
December 5, 2023
by Rob Zdravevski
rob@karriasset.com.au
December 5, 2023 Leave a comment
Don’t be surprised reading the headline of this Bloomberg article.
Of course, corporate taxes were going to rise.
The British government made sure of it when they increased the corporate tax rate from 19% to 25% in April 2023.
In this article from February 2023, I wrote that “Corporate taxes were as good as they were going to get”.
In addition, I cited that the FTSE 100 is “full”.
it was trading at 7,915 at the time of writing that note compared to today’s price of 7,513
Furthermore, in other notes, I alluded to a pragmatic case when the “I” in company’s EBIT rises and when the expected increases in the “T” occurs, we will see earnings (net profits) come under pressure.
It also contains a link to very good paper concluding that much of the attributed earnings for S&P 500 companies over the previous 18 years, came with the assistance of low (subsidised) interest rates and corporate taxes.
And people wonder why investors and corporations are always looking for low taxation domiciles.
December 5, 2023
by Rob Zdravevski
rob@karriasset.com.au
June 21, 2023 Leave a comment
British 10 year government bond yields are seldom this distance above its 200 week moving average while simultaneously registering a weekly overbought reading.
Forgetting Bank of England policy rate setting, I can see these 10’s back down around 2.40% over the coming 9-15 months.
Demand destruction commensurate with decline in GDP will aide this thesis.
June 21, 2023
by Rob Zdravevski
rob@karriasset.com.au
May 24, 2023 Leave a comment
My latest edition (written every Sunday) of Macro Extremes said, “In this weeks list, the British 10’s entered an overbought territory while the other 2, 3 and 5 year durations are nearly doing the same.”
And so during this current week we are now seeing the British government bond yields across 2, 3 and 5 year maturities trading at 2.5 standard deviations above their rolling weekly mean.
May 24, 2023
by Rob Zdravevski
rob@karriasset.com.au
October 7, 2020 Leave a comment
Last week I wrote about my two best Equity Index ideas.
Buy the U.K.’s FTSE 100 and Spain’s IBEX 35.
I wanted to attach some better charts showing the monumental extremes of an index being oversold, not on a daily or weekly terms, but on a Monthly basis.
Because we’re looking at them on a Monthly view, we’re not about to trade out this position next month.
When you’re a buyer of securities at such extremes, you’ve got to give yourself 10% of price movement. After all, in the case of the IBEX, I’m looking for a 45% rise over the next 2-3 years as the index means revert towards its 200 day moving average, which is currently 10,000.
October 7, 2020
by Rob Zdravevski
rob@karriasset.com.au
rob zdravevski's blog 