Invest
Tech bubble fears misplaced: Lonsec
While investors may be concerned by Facebook's recent share price wobbles the likelihood of a late 90s'-like tech bubble forming is thin, an investment officer has said.
Tech bubble fears misplaced: Lonsec
While investors may be concerned by Facebook's recent share price wobbles the likelihood of a late 90s'-like tech bubble forming is thin, an investment officer has said.
Speaking to Nest Egg's sister site, InvestorDaily, Lonsec Investment Solutions chief investment officer Lukasz de Pourbaix acknowledged concerns about the overvaluation of the technology sector.
But while it was important to consider valuations, he pointed out that it was equally important to understand whether the valuations were backed up by earnings.
“A lot of these companies, from an earnings perspective, are generating very strong earnings, which – unlike the tech bubble which we saw in the late 90s, early 2000s – there's certainly a big difference there,” Mr de Pourbaix told InvestorDaily.
“If you roll back to some of the stocks in the tech bubble, some of those stocks have no earnings.”
“Do we have another tech bubble? From our perspective, that’s not our base case.”
He cautioned against painting the entire technology sector with a broad brush, recommending the need for a more “balanced approach”.
“It is a stock by stock exercise rather than a whole of sector exercise. Because within that broad sector, there's [sic] absolutely strong companies supported by strong earnings,” he said, pointing out that Facebook was among the top-ten highly weighted companies in the S&P 500 index.
“Any of those stocks in the top 10, if they are experiencing volatility, then obviously that's going to impact the broader market, the index.
“And because those stocks have done well over the recent years, they do make up a larger part of the index.
“So if they are experiencing volatility, that will show through in the stock market as well.”
This recent volatility would present fund managers with “more opportunity on a stock by stock level”, Mr de Pourbaix added.
“If we are entering a period of more volatility, then really that individual stock-picking ability is going to become increasingly important.”
RELATED ARTICLES
Property
North platform adds household reporting feature to boost adviser efficiency
AMP's North platform has launched consolidated household reporting across multiple client accounts, helping financial advisers streamline their client review processes. Read more
Property
What Adds The Most Value To Properties?
Wondering how to up the value of your property? Properties are worth a lot of money in general, but there’s always a way to maximise value. The good news is that most of the things you can do to ...Read more
Property
Centuria reports strong growth in alternative real estate sectors for FY24
Centuria Capital Group has reported significant growth in alternative real estate sectors for the 2024 financial year, driving stable performance and increased guidance for FY25. Read more
Property
How to leverage equity in your home for investment or renovation
Home equity, the value of your property minus any debts owed, is a powerful financial resource many homeowners in Australia can utilize to further their financial goals. Whether you're looking to ...Read more
Property
Exploring REITs: Real estate investment without buying property
Real Estate Investment Trusts (REITs) offer a compelling investment alternative for those interested in the real estate market but may not want to endure the complexities and capital requirements of ...Read more
Property
Retirement communities: a pivotal element in meeting Australia's housing targets
The Retirement Living Council (RLC) has recommended that retirement communities should be considered a vital part in the Australian Government's initiative to fulfill the Housing Australia Future Fund ...Read more
Property
Australians adjust financial strategies amid changing property market dynamics
The 2023 calendar year saw Australian borrowers acquiring a total of $300.9 billion in new loans for property purchases, marking a 12.7% decrease from the previous year. Read more
Property
Split home loans unlocking doors for Aussie buyers
Australians are teaming up to dive into the real estate market and seize the advantages of home ownership, with the trend of split home loans surging as family and friends unite to buy properties ...Read more
Property
North platform adds household reporting feature to boost adviser efficiency
AMP's North platform has launched consolidated household reporting across multiple client accounts, helping financial advisers streamline their client review processes. Read more
Property
What Adds The Most Value To Properties?
Wondering how to up the value of your property? Properties are worth a lot of money in general, but there’s always a way to maximise value. The good news is that most of the things you can do to ...Read more
Property
Centuria reports strong growth in alternative real estate sectors for FY24
Centuria Capital Group has reported significant growth in alternative real estate sectors for the 2024 financial year, driving stable performance and increased guidance for FY25. Read more
Property
How to leverage equity in your home for investment or renovation
Home equity, the value of your property minus any debts owed, is a powerful financial resource many homeowners in Australia can utilize to further their financial goals. Whether you're looking to ...Read more
Property
Exploring REITs: Real estate investment without buying property
Real Estate Investment Trusts (REITs) offer a compelling investment alternative for those interested in the real estate market but may not want to endure the complexities and capital requirements of ...Read more
Property
Retirement communities: a pivotal element in meeting Australia's housing targets
The Retirement Living Council (RLC) has recommended that retirement communities should be considered a vital part in the Australian Government's initiative to fulfill the Housing Australia Future Fund ...Read more
Property
Australians adjust financial strategies amid changing property market dynamics
The 2023 calendar year saw Australian borrowers acquiring a total of $300.9 billion in new loans for property purchases, marking a 12.7% decrease from the previous year. Read more
Property
Split home loans unlocking doors for Aussie buyers
Australians are teaming up to dive into the real estate market and seize the advantages of home ownership, with the trend of split home loans surging as family and friends unite to buy properties ...Read more
