Ten Thousand Words - September 2018

Apparently, Confucius didn’t say “One Picture Worth Ten Thousand Words” after all. It was an advertisement in a 1920s trade journal for the use of images in advertisements on the sides of streetcars. Even without the credibility of Confucius behind it, we think this saying has merit. Each month we share a few charts or images we consider noteworthy.

This month State Street demonstrates that buying stocks based on valuation has usually worked - but not in the current calendar year. Does that mean growth is in a bubble? Others ask if there are bubbles in cannabis or in the bond market. Fund managers are fearing trade wars. But Morgan Stanley shows that pulling money in and out of the market is often a flawed approach.

Meanwhile, fund services group Mainstream (ASX code: MAI) and drug prescription adherence tech play Medadvisor (ASX code: MDR) chart out some of their target markets (equitable Investors Dragonfly Fund has positions in both companies).

Value is usually rewarded in both high- and low-growth segments of the market - but it has not been so far in 2018 says State Street
Source: State Street, MSCI World Index, FactSet

Richardson GMP asks if cannabis stocks are in a bubble
Source: Richardson GMP, "The Anatomy of a Bubble Revisited: How High?"

Richard Bernstein Advisors is concerned that it is actually the (US) bond market that is overheated, with Cumulative Bond ETF and Fund Flows an indicator

Source: Richard Bernstein Advisors, ICI

B of A Merrill Lynch Fund Manager Survey finds "Trade War" considered "biggest tail risk" in recent months 
Source: B of A Merrill Lynch

While Morgan Stanley notes that investors tend to cash in or out of equities at "inopportune times"

Source: Morgan Stanley

Mainstream (ASX code: MAI) eyes off "Total assets under custody for Australian investors" as an opportunity

Source: Mainstream, Australian Custodial Services Association, August 2018

MedAdvisor (ASX code: MDR) sets out its opportunity in Australian health care

Source: MedAdvisor

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