Hi Guys, It's looking allot like the markets are starting to react to Ben's speech and his hints at further easing. Zerohedge has gone as far as to put a number on it $770 billion now being priced into the markets for the next round of QE. Previously QE had quite a profound impact on MQG and various other stocks but the reason behind MQG is there exposure to allot of foreign debt. Because of this potential short term "lifeline" i believe MQG may benefit nicely from its current position which has been hammered. You may ask why i didn't look at any of the big-4 banks well the answer simply is because they are for the most part still showing positive gains YoY whereas MQG is -33% YoY. I'de love to hear some more thoughts on this one
MQG IMO is a the most diversified and dynamic business model of any Australian Bank.The have a huge level of Non bank fee income. I have them under monitor to buy however I think you will see them really perform in 2014 and after. I think they are a true Modern Blue Chip.
MQG is an incredibly risky business with an opaque business model and like all modern day banks and investment banks a highly leveraged balance sheet. Also I dislike the management team and the board who all seem to be greedy and arrogant (although that seems to be the Macquarie Group culture) and think they are geniuses. I always used to cringe when I heard Macquarie referred to as the 'millionaires factory'. Thankfully you don't hear the phrase thrown around often these days. Its a business that as it currently stands will in my opinion only do well in a credit bubble, and in the current environment will struggle to even achieve a low double digit return on equity which is below its cost of capital (I would say 15%-20% average ROE) for such a highly leveraged business. Hence in my view the business is worth no more than book value and possibly worth considerably less. Sure the company can make some money in the current environment but to generate excess returns they need asset market bubbles. The company couldn't be further away from 'blue chip' (what does 'blue chip' even really mean?) if it tried. In my opinion the company is speculative rubbish.
Back in the mids of financial turmoil in 2008ish, everybody ran for cover with their money. MQG I think was a bit late to the game, but they converted their CMT to a "deposit taking" institution in 2010 (you can read between the lines as to why would they do that, and why then). Also their was a ban on short selling financial stocks wasn't there imposed by APRA? Imagine if those two things did not take place, you would wonder where their share price be at the moment. I just think of them as babcock and brown, only on a larger scale.
Are you serious? First this post, then you recommend Macquarie to put SMSF funds? http://forums.silverstackers.com/message-288650.html#p288650 I 100% agree with Bargain Hunter thoughts. I also suggest you pick up a copy of "Six Months of Panic: How the GFC Hit Australia." You will see Macquaries fingerprints all over the speculative bubbles that popped here. One example is Storm Financial. Do you want to be the one standing when the music stops?
I did not recommend MQG for a SMSF if you read my post.I recommended them as a bank account for a SMSF. Any SMSF though should be diversified and managed in accordance with the written investment strategy that the trustees have approved. As I said I have them under review and may buy them at some point.
