Slack Investor Guide to investing in ASX UK US Stocks Shares

The Super Squeeze – March 2026 End of Month Update

**Woman Giving Money to a Servant-Girl** (c. 1668–1672) – Pieter de Hooch.

In times of market turmoil, Slack Investor likes to take his mind off the day-to-day fluctuations of his share investments and concentrate on things that he knows that works. He knows that the stock market is volatile. He knows that the stock market provides excellent returns to the long-term investor. He knows that his Stable Income pile will fund his needs.

For a mood lift, He just taps into his inner Julie Andrews and simply remember My Favourite Things. These favourite things include long-term investing and Superannuation.

Compulsory Pay Day Super

Compulsory Super was brought into Australia way back in 1992 by the force of nature Paul Keating. Every time that there is a proposed change to the structure of Superannuation, Slack Investor steels himself for the worst.

However, to almost universal acclaim, there was some good news in Superannuation circles with the introduction of pay day Super. From 1 July 2026, employer paid Super must be transferred on the same schedule as an employee’s pay cycle rather than quarterly. Previously, the rules allowed for the Super Guarantee contribution to be paid in lump sums every 3 months. The new rules are expected to benefit lower-income workers under casual, and part-time arrangements. Their Super will be deposited into their accounts and earning money straight away.

‘By switching to payday super, a 25-year-old median income earner currently receiving their super quarterly and wages fortnightly could be around $6,000 or 1.5% better off at retirement.’ _{– Stephen Jones , Assistant Treasurer}

Bewdy … we can relax now and let the compulsory 12% Super guarantee fund our comfortable retirement … Not so fast!

The ‘Voice of Super’ outlines the ‘Squeeze’

The Association of Superannuation Funds of Australia (ASFA) update their Retirement standard every quarter. They follow the effects of household costs on a retirement budget for both a comfortable and a modest retirement. ASFA define a ‘comfortable’ retirement where the budget allows for Occasional restaurant meals, take-away coffee and a yearly domestic holiday and an overseas trip every 7 years . Slack Investor has more lofty goals than this. Let’s focus on at least a comfortable retirement!

Even before President Trump’s misadventures in the Persian Gulf, prices have been moving north. The CPI rose 3.8% in the 12 months to December 2026 – but other household costs are rising faster. ASFA found plenty of price increases for the same period.

Electricity up 21.5 per cent, driven by the expiry of energy bill relief subsidies
Coffee and tea up 15.3 per cent due to rising commodity prices
Beef up 10.8 per cent
Domestic travel up 9.6 per cent
Water up 7.1 per cent
Property rates up 6.2 per cent
Medical and hospital services up 4.3 per cent
Fruit up 4.2 per cent
Private rental costs were up 3.9 per cent, just above the general inflation rate.

These price pressures have moved the required income for a comfortable retirement to even higher levels.

‘… homeowners aged 65 and over now need $77,375 annually for a comfortable retirement as a couple, and $54,840 for a single.’ _{– ASFA Report February 2026}

ASFA calculate that these retirement incomes at age 67 would require a super amount of $630,000 for singles and $730,000 for couples – assuming home ownership.

Are we on track?

Age	ASFA Required Comfortable Super Amount	Actual Male	Actual Female
30	$66 500	$55 690	$46 586
40	$168 000	$140 680	$109 209
50	$296 000	$254 071	$190 075
55	$377 000	$319 743	$242 945
60	$469 000	$395 852	$313 360
65	$571 000	$448 518	$392 274
67	$630 000	?	?

Assuming a future pre-tax income of $65,000 a year that keeps track with inflation. ASFA have calculated the Super milestones for a single person to reach $630,000 in super at retirement – ASFA February 2026 Report. Actual Male and Female Super balances from Rest Super (March 2026)

Male Super amounts are approaching the required ‘comfortable’ Super levels – but are still lagging. There is a definite gender gap in Super balances. Women suffer from structural inequalities in the workplace that include lower paid professions and career breaks for family.

As well as these existing Super shortfalls for a ‘comfortable’ retirement, these ASFA budgets assume that the retirees own their own home.

Despite the difficulty, Slack Investor encourages all to have the goal of their own home by retirement age. This may be a modest apartment, tiny home, a granny flat, or a place in the country. But it must be yours! Also, keep an eye on your Super and how it relates to the ASFA targets at each age level. Slack Investor always made sure his Super was in the Highest Growth option when he was under 55 and topped up his balance regularly with ‘Salary Sacrifice’ contributions.

March 2026 – End of Month Update

It was in March 2025 Update when Slack Investor wrote about the first ‘Trump Slump’ due to the random application of his trade tariffs to the world.

Well, thank you again Donald for your contribution. All followed markets fell this month. The ASX 200 down 4.0%, the FTSE 100 down 9.7%, and the S&P 500 down 4.3%. For now, each Index remains above their stop losses – but both the UK Index and Australian Index are perilously close to their stops. For now, Slack Investor remains IN for the FTSE 100, the ASX 200, and the US Index S&P 500.

The talented David Rowe has summed things up again – David Rowe, AFR

All Index pages and charts have been updated to reflect the monthly changes – (ASX Index, UK Index, US Index).

The quarterly updates to the Slack Portfolio have also been completed. There are some significant changes since the December 2025 update. Slack Investor has tinkered – and tried to remove the more speculative stocks in the Portfolio. He has stayed with established growing companies that will hopefully weather the storm. He has ended up with a good amount of cash (17.5% of Slack Portfolio). This will hopefully be deployed when he sees a return to more stable conditions.

Housing is tough for the young

In a November 2025 report, Cotality state some pretty depressing numbers for aspiring young home owners – using median Australian values.

The reported housing to Australian household income ratio of 8.2 is even worse when you consider housing in terms of the more meaningful disposable household income. This is the household income after deductions for tax, Medicare and existing loan payments.

There was a period in the late 1990s when it would take 9 or 10 years of annual disposable income to buy the average Australian dwelling. On average, it now takes 16-17 times disposable income to buy a residence.

Average residential dwelling price vs annual household disposable income – Greg Jericho – The Australia Institute

It is not just homebuyers feeling the squeeze. Renters are also in pain because the high cost of housing means that property investors are asking for a fair return on their investment.

The median household required a record 33.4 per cent of its income for rent, which was well above the average of the past two decades. _{– Jason Dasey – ABC News}

The chart below shows the effect on house prices after a series of Australian Government initiatives that have just seemed to add to the housing unaffordability problem in Australia. The dwelling prices have been accelerating away from household income since 1990.

Chart showing rapid increase in dwelling prices compared to Household disposable income since 1970 – Greg Jericho, The Guardian

It’s just Unfair

Matt Grundoff from The Australia Institute outlines the absurdity of the current system using the example of a highly paid executive who just has made a $400 000 profit on an investment property. Because of the Capital Gain discount, the profit will be taxed at 50% of the executive’s marginal rate – 50% of 47% = 23.5%. Contrast this with a full-time retail worker on the minimum wage (~$50 000) who will pay 32% tax on any extra shifts. Why should the retail worker pay tax at a greater rate than the executive?

The incentives are driving high net worth individuals into the property investing market. Currently, 60% of the Capital Gains discount goes to the top 1% of earners – on salaries of more than $362 900!

Today, the capital gains tax discount appears in the federal budget as a tax expenditure worth more than $20 billion a year. _{– Luke Hopewell – Switzer}

Something is in the wind

On fairness grounds, something must be done to tackle this dire current housing situation for the young. Slack Investor has never been in the position where a massive 45% of his income was required to service a mortgage. Likewise, in his younger days, he has never had to provide 33.4% of household income for rent. It is no wonder that Roy Morgan found that 23.9% of mortgage holders were ‘At Risk’ of ‘mortgage stress’ in January 2026.

There are enough balloons going up to signal that the Australian Government is going to look at the Capital Gains discount in the 2026 Budget. In the way of compromise, they will probably just reduce percentage amount of the discount to owners of multiple properties. This is a delicate matter, as a more drastic change might spook any property investors out of the market – and worsen the already tight rental scene.

Slack Portfolio Surgery – February 2026 End of Month Update

Robert Liston operating. Painting by Ernest Board of Bristol (1877-1934) – Wikimedia Commons

The leg amputation depicted above was supposedly done in under 30 seconds. Dr Liston not only managed to kill the patient (Sepsis), but one of his assistants (Sepsis) – and also one of the audience (shock). A 300% mortality rate! Slack Investor hopes for a better outcome after some recent portfolio surgery.

SaaS-pocalypse

The ‘SaaS-pocalypse’, a trending term to describe the recent and dramatic sell-off in global Software-as-a-Service (SaaS) shares, is based on the idea that AI becomes so advanced that software becomes redundant. _{– The Guardian}

Slack Investor went into a bit of detail last post on the sell off in tech and healthcare stocks due to the release of AI tools such as Claude. This wasn’t just some tale in a distant land, the ‘SaaS-pocalypse’ was having a very direct affect on the Slack Portfolio.

ASX200 biggest falls since August 2025 (Data as of 4/2/2026) – Livewire

Is this really a disaster for the Slack Portfolio? Slack Investor prides himself on getting things ‘mostly right’. However, this 2026 Financial Year has been testing – it seems that he has been getting things ‘mostly wrong’! However, Slack Investor knows that only long-term results count.

It is certainly a setback, as Slack Investor has attached himself to 5 of these ‘Biggest Fall’ ASX companies set out above. Some remedial action is required.

Slack Investor has been in this game long enough to not panic. He has however given the Slack Portfolio a ‘very hard look’ and has been gradually building up his cash position by selling companies that have not a convincing story to tell in these frothy times – particularly those with an extended PE Ratio. Future incomes may not be enough to justify their expense (high PE Ratio). He is mindful that the recent sell-off might be overdone in some cases.

But the companies being indiscriminately sold are often those whose actual protection was never in the codebase to begin with. The durable moats live outside the software entirely, in proprietary data rights, regulatory licences, institutional relationships, deep workflow embedding, and sustained frontier research. None of these can be prompt-engineered into existence. – Mark Gardner, MPC Markets –Livewire

Since his last published quarterly portfolio, Slack Investor has reduced his exposure to the US market (Sold NVDA, NDQ, JNDQ) and sold off some of his more speculative holdings (TLX, MP1 and CXL). His cash position is healthy and waiting for some future opportunities. His Stable Income pile plus Slack Portfolio dividends are enough for living expenses and holidays. Slack Investor should never be forced into a sale of his stocks.

Rules of thumb when bad things happen

Slack Investor has general rules of thumb for when stock prices have a fall of 20%. These questions must be asked.

Has something fundamentally changed with the company? Such as sustained falling earnings, new competitors, etc.
After running the numbers for predicted PE Ratio, predicted ROE and predicted growth. Would Slack Investor buy this company at the current price?

As well, for SaaS stocks, Slack Investor has another question.

Does the company produce proprietary software and embedded relationships with its clients that would provide a durable moat?

These three questions were enough for me to hang on to my battered software-based stocks TNE, CAR, REA, and WTC – and hope for a recovery.

February 2026 – End of Month Update

Slack Investor remains IN for Australian index shares, the US Index S&P 500 and the FTSE 100.

Despite the turbulence in the Slack Portfolio, it was a good month for the ASX 200 (+3.7%). The FTSE 100 is in record territory with 6.7% February growth. A well deserved rest for the US markets (S&P 500: -0.9%).

All Index pages and charts have been updated to reflect the monthly changes – (ASX Index, UK Index, US Index).

Hi Claude … I wasn’t expecting you

Slack Investor likes to keep up with investor news and he was a bit slow with the emergence of the Claude Cowork platform. Claude Cowork is built by Anthropic as a way to bring the command line Claude Code tool to non-technical users. Claude Cowork is available as a desktop application for MacOS and Windows. This is just another way to help take AI into the workplace. Amazingly, the entire Claude Cowork feature was built in approximately ten days using Claude Code itself.

Since the release of this new platform, on fears that Claude is a bit of a gamechanger, software stocks have lost over 1 Trillion USD since the start of this month.

A legal firm conducted a test that asked Claude Cowork to draft a contract and critically read another legal contract to point out concerning clauses for a risk-averse client. The task was completed in seconds and was ‘Bang On’.

“I thought it was great. If I got that from a junior lawyer after they worked on that for hours I would be pleased. … It was clear, it was concise, it accurately reflected the commercial context _{– Sarah Pool, Lawyer and founder of EstateXchange}

Claude is not limited to the legal field. Apparently he is a deft hand at coding and assembling software. A Livewire article by Luke Hopewell has left quite an impression on Slack Investor. Early this month, the Xero CEO Singh Cassidy, who manages a very successful accounting software service stated: ‘Xero couldn’t be easily cloned with AI’. Further, ‘Investors are failing to differentiate between software tools that can be easily replicated and those that cannot’.

Luke Hopewell is a tech contributor to the Switzer report and has held editorial roles with Twitter and Gizmodo. He obviously has good tech skills … and he accepted the challenge and offered the task to Claude Cowork.

The article is well worth the read and he asked Claude if it could replicate the Xero software with Claude Code. It didn’t take Claude long to assemble 21 different pieces of financial software to mimic the Xero suite – at zero cost! This compares with Xero packages for small business which start at $75 per month.

Mr Hopewell admits that the Claude derived suite was clunky and ‘a pain to try and get running‘. This Claude assembled software is unlikely to satisfy a business owner who wants a seamless well designed product. However for something conjured up in a few minutes, Claude’s work is pretty impressive – and pretty cheap!

Claude and other AI developments have spooked the tech stocks

Claude Cowork and other AI-sourced jitters have set off a big slide in Healthcare and Software as a Service (SaaS) companies. Since August 2025, there have been falls of between 25% and 50% for some ASX stocks. Sadly for Slack Investor, these are just the type of profitable, low-overhead businesses that he likes and owns. He has been selling some of his tech stocks (but not enough!) whose chart patterns resemble ‘falling knives‘ – hoping to get back in when things stabilize.

As impressive as Claude is, there are a few hardy souls who maintain the recent sell-off of the SaaS stocks is a bit overdone. Slack Investor can comprehend that this type of intuitive AI software represents a massive change to the way we work. Businesses in many fields (legal, administrative, graphic design, financial, etc.) will have their earnings model challenged. However, he thinks that despite the industry-wide downturn, there should be a move towards quality businesses with platforms that are essential and AI-resilient.

This fear has been applied largely indiscriminately, with little consideration given to whether software platforms are embedded in core workflows with control of data and distribution _{– Jai Mirchandani – ELM Responsible Investments}

At the recent ProMedicus AGM, the CEO Dr Sam Hupert was asked whether their main software tool Visage was under threat from AI if anyone will be able to use AI tools to write industry grade software in a fraction of the time.

This, in our view, is an overly simplistic generalisation, one that certainly doesn’t apply to us. Visage 7 was built from the ground up using our own proprietary technology. It is not based on some readily available tool kit or platform. It is a very specialised, highly technical, patented suite of software that incorporates more than 30 years of domain knowledge; it is not a product that can be readily replicated with or without AI. We have not left a roadmap for others to follow. _{– ProMedicus CEO, Dr Sam Hupert}

Slack Investor is still a bit stunned by this rapid re-rating of all software related stocks. In the tech sector, the market is obviously not willing to pay the high P/E multiples on the promise of future earnings.

This may be wishful thinking, but Slack investor thinks Dr Hupert is right … and this AI scare for complex software products that are embedded in their clients workflow has gone way too far. Good companies will develop their own AI tools to enhance their software. It is time to focus on only high quality SaaS companies with a moat that Claude-type things will have difficulty in crossing. Time to get off the couch.

It was the best of times … it was the worst of times – January 2026 End of Month Update

Author of ‘A Tale of Two Cities’, Charles Dickens in his study at Gadshill

Slack Investor is a bit of a do-it-yourself bloke and has had reasonable success with his investing over the long-term. However, there is a place for outsourcing this noble task and it has always been Slack Investor’s intention to gradually take a back seat as he loses his faculties and hands over the whole kaboose to Ms Slack Investor. I always thought I would follow the great Mr Buffet’s thoughts on how to produce superior returns to most fund managers.

‘My advice to the trustee could not be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund.’ _{– Warren Buffet, 2013 Berkshire Newsletter}

Warren Buffet’s reasoning is based upon the relatively high fees that stock-picker (active) funds charge. It is his contention that these fees will erode any achieved outperformance for most of them. Is there still room for stock-pickers? With apologies to Charles Dickens, Slack Investor will examine this with a Tale of Two Funds from his own investing history.

The Tale of Two Funds

The Montgomery Fund

Slack Investor has always been impressed with Roger Montgomery. He often appears on the media and his own website with reasoned and intelligent comment. It was after one of these exposures that Slack Investor thought it would be a grand idea to allocate some of the Slack Funds to Montgomery’s signature vehicle. Slack Investor bought units in The Montgomery Fund. between 2012 and 2017. While there was some initial success, the continual long-term underperformance when compared to the ASX 300 Benchmark was enough for Slack investor to have misgivings – and pull the sell cord in 2020 for an eventual loss. It was a case of the ‘sizzle’ being more impressive than the steak.

The management fees for the Montgomery Fund start at 1.36%p.a. and there is also an outperformance fee of 15.3%. The table below shows that in all time frames, but most significantly, when using the long-term figures (> 5-yr), the Montgomery Fund has underperformed. The fund has been weighed down by its relatively high fees and poor performance. The fund is aware of its chronic underperformance and they attribute most of the blame to an old fund manager prior to 2022. However, the inability to keep pace with the benchmark even in the last 3 years, suggests to Slack Investor that the malaise still lingers.

Table of the Montgomery Fund performance vs S&P/ASX 300 benchmark till 31/12/2025 since since inception 17/08/2012 – The Montgomery Fund

PM Capital Global Opportunities Fund

Slack Investor’s ears pricked up during a Livewire Interview with Paul Moore, the founder of PM Capital. Mr Moore’s humility, common sense and experience came through when discussing his fund offerings. PM Capital run a number of different funds but the one that intrigued Slack Investor the most was the Global Opportunities Fund where:

The aim is to create long term wealth through a concentrated portfolio of 25-45 global companies that we believe are trading at prices different to their intrinsic values.

The PM Capital Global Opportunities Fund is available as a Managed Fund and also a Listed Investment Company (LIC). Slack Investor chose the LIC (PGF.ASX) as it is readily traded through his broker. PGF has fees of 1.0% p..a. and there are also an outperformance fee of 15%. However, looking at the intrinsic value of global companies is a skill that Slack Investor hasn’t got. For example, the largest position in PGF is European banks. PM Capital compare the Dutch origin ING (Book Value x 0.8, Forward PE 5) with Australia’s CBA (Book Value x 2.0, Forward PE 19). Slack Investor is happy to pay a fee to portfolio managers that are willing to seek out good value global companies. The long-term outperformance in the table below confirm that they are excellent at it!

Performance Table for the PM Capital Global Opportunities Fund, the Monthly update figures valid at 31/12/2025 were used together with the MSCI World Index returns in Australian Dollars (AUD). The PGF ETF was launched in December 2006 but the Fund’s inception date was October 1998.

This is not advice, and Slack Investor acknowledges that past performance does not guarantee future performance. However, the table above suggests that Mr Moore and his team know what they are doing. Consistently outperforming the MSCI World Index (in $AUD) is a considerable accomplishment. Slack Investor has bought some PGF with thoughts of adding further to his position in the future.

January 2026 – End of Month Update

End of month updates - Blue rising chart

Slack Investor remains IN for Australian index shares, the US Index S&P 500 and the FTSE 100.

In another crazy month of world turmoil (Thanks Mr President!) all followed markets rose strongly. The S&P 500 (+1.4%), the FTSE 100 (+2.9%) and the ASX 200 rose +1.8%. Slack Investor remains uneasy about how this great experiment will work out.

All Index pages and charts have been updated to reflect the monthly changes – (ASX Index, UK Index, US Index).

Rethinking the Slack Factor

Slack Investor is a simple man and he likes things that are not too complicated. He introduced the Slack Factor 9 months ago – a way to condense a lot of information down to just one number. The things that Slack Investor likes go on the top line and the things that he doesn’t like to be a high value – go on the bottom line.

ROE is the **forecast** ROE (ROE 2028), EPSG is the **forecast** EPSG for the next three years (EPSG AV – Max 30) and, PE Ratio is the forecast PE Ratio (PE 2028).

Return on Equity (ROE) is a great measure of how profitable a company is and Earnings per Share Growth (EPSG) is a measure of growth – both of these are desirable company traits for Slack Investor.

Price/Earnings (PE) Ratio is a way of looking at how expensive a share is according to its earnings. This is a ratio that Slack Investor likes to be below 40 or 50 (ideally even lower!) when forecast for the next 2 to 3 years.

The Slack Factor has flaws

Evidence of this is the relatively poor performance of the Slack Fund in the last 6 months compared to benchmarks. The problem with the Slack Factor is that it gives prominence to a stock’s growth forecast. Slack Investor has found that many high Slack Factor stocks are found in the medical innovation sector where there are also very high risks – and if growth forecasts are not met, this can cause a massive slide in share price.

For example, back in August 2025, Telix Pharmaceuticals (TLX) had a very high Slack Factor. Slack Investor had thought that by limiting the 3-yr growth forecast to 30 might protect him from any outlandish growth forecasts. The raw figures for TLX EPS growth for the next 3-yr were 26%(+1yr), 97%(+2yr) and 92%(+3yr). On this high growth prediction, he bought a decent parcel of this stock back in March 2025 – based upon its high Slack Factor.

Suffice to say, it has not gone well.

The Slack Investor has flaws … just ask my wife!

Slack Investor recognizes his imperfections, but he always looks for ways that he can improve. To avoid being pushed into stocks that have extremely high growth forecasts that may fail to materialise, he has decided to take growth out of the Slack sorting equation … but putting the important growth property into the pre-requisites before he will invest.

The Slack investor pre-requisites or, ‘things he likes’ before investing are mostly found on the Market Screener Financials page:

Profit – An established record of profit or a trend towards profit in the next year or so
Increasing Revenue – An established record of increasing revenue and forecast revenue
High Return on Equity – A forecast ROE of greater than 15%
Maneagable debt – Slack Investor loves companies that fund their own expansion but debt is sometimes necessary to grow
Growth – A forecast Earnings per Share Growth (EPSG) of greater than 10%
Price Maker – Ideally the company will have a unique product or it is ‘best in class’ – a business with a ‘moat’

Introducing the Slack Ratio

This is just a simplification of the Slack Factor (without the EPS growth). Slack Investor likes a high Return on Equity (ROE). A high growth company may also have a high PE ratio because the price will rise to account for future earnings growth. By expressing these two factors as a ratio – hopefully profitable companies that are not too expensive will shine. If the Slack Ratio is above 0.7 – Slack Investor is more likely to buy.

Slack Investor has tabled the shares in the Slack Portfolio (in Bold type) and a grab bag of other stocks plus a few new ideas from Livewire growth stocks. I have sorted the table by decreasing Slack Ratio.

Over the next six months, Slack Investor will have a minor tinker with the Slack Portfolio. He will be more likely to buy a company that is higher on the list. If there are insufficient funds for a purchase, he will probably sell a company that is lower on the list. This is not advice, just an insight into Slack Investor’s financial journey.

Be Old and Get Gifts – December 2025 End of Month Update

Portrait of an Old Man – Rembrandt Van Rijn – Harvard Art Museum

Slack Investor would have to say that getting old has several disadvantages. However, the Australian government is compensating for this – perhaps a little too much. Under the current ‘Intergenerational contract’ and our ‘tax transfer’ system – it pays to be old!

25 years ago, the 75+ age group’s post-tax income was only 75% of the average, but now it matches the average, indicating a significant shift. _{–(Source: ANU)}

The Black line on the chart below, represents the net value (aggregate) of government taxes and services at each age. It is a good demonstration of how the Australian tax and transfer system works. A recent ANU Report shows that these transfers are part of the intergenerational contract where the working community ‘looks after’ the young and the old:

The Australian tax and transfer system – (Source: ANU). The intergenerational contract is graphically displayed – the black line is the net value of government taxes and services at each age.

When people are young, they pay relatively little tax and they receive services such as education.
During working age, people typically pay more in taxes than they receive in services.
After retirement, older Australians usually receive more in government benefits and services (age pension, aged care and health care) than they pay in taxes.

These principles are sound in a caring economy. However, there is something profoundly wrong with the whole Australian tax system where:

Australians over the age of 60 have enjoyed a post-tax income similar to that of mid-career working age Australians and much higher than Australians aged 18-30 _{–(Source: ANU)}

The report describes how, in earlier periods, older Australians earned relatively little income while the tax and transfer system provided income and support. In recent years, Australian retirees generally have generated income from significant Real Estate and Superannuation accumulated wealth – and the Australian tax and transfer system has not adjusted.

We’re a country that overtaxes hard work that actually contributes to the economy and rewards those hoarding unproductive assets while contributing little back. _{– Tom Stelzer, Livewire}

The Australian Budget is in a structural deficit – the cash balance will be negative in every year going forward! In the next few years, it will be necessary to increase taxes or reduce Government spending.

The ANU Report suggests that budget repair should include both a mix of tax increases and spending reductions on older Australians. The proportion of over 65s paying tax has halved in the last 20 years. Slack Investor is not one to eagerly put his hand up for extra taxes – but he can see the community benefit. He will take it on the chin when it happens.

December 2025 – End of Month and Year Update

Although December in the US was a flat month (S&P 500 +0.0%), there was a bit of a ‘Santa Rally’ this month for Australia and the UK. The ASX 200 was up 3.3% and the FTSE 100 up 2.2%. Slack Investor remains IN for the FTSE 100, the ASX 200, and the US Index S&P 500.

I haven’t yet done the full maths on the market yearly gains that include dividends. In raw terms (without dividends), for calendar year 2025 the ASX 200 was up 7%, the FTSE 100 up a magnificent 21%, and the S&P 500 up 16%.

Amongst all this positive news, the Slack Portfolio has had a negative calendar year and is down 3.1%. Slack Investor has good long-term performance and accepts the volatility of the stock market. He is not surprised by the odd bad year, but amongst all this background rising tide – it is just poor form!

The Ashley Owen graphic below shows one of the reasons for the Slack portfolio negative performance is that he has attached himself to some of the biggest losers of calendar year 2025 (CSL -35%, Goodman Group -17% and Wisetech -41%). My New Year’s resolution is to pay a bit more attention to the Slack Portfolio and try to turn things around.

The ASX top shares movement till 12 Dec 2025 – From Ashley Owen IFPA lecture series – OwenAnalytics

All Index pages and charts have been updated to reflect the monthly changes – (ASX Index, UK Index, US Index). The quarterly updates to the Slack Portfolio have also been completed.

A technical note on the Slack Portfolio. Slack Investor has moved his Wesfarmers (WES) and Coles Group (COL) shares out of the growth-oriented Slack Portfolio because of their relatively weak projected growth (5%-10%). He remains a shareholder of these solid companies, but he has moved them into his Stable Income Fund – where they more comfortably sit.

Small Things

Slack Investor is enjoying the hallmarks of the festive season and has collected a ‘grab bag’ of smaller finance issues that just wouldn’t make a whole post. So, here they are as a collection.

Revised Division 296 Super Tax

Slack Investor wasn’t the only one going on a bit of a rant about the poor design of the proposed tax on large super balances – Division 296.

There was an unusual change of heart within the government after many months of stonewalling. The Division 296 proposal to tax both ‘realised’ and ‘unrealised’ gains on superannuation balances over $3m was finally revamped. The Australian treasurer Jim Chalmers relented. The new revisions are not law yet and are expected to be presented, and passed, in early 2026 with an implementation date of 1 July 2026. The changes from treasury outlined below are practical and sensible – and include indexation on the balance limits.

Superannuation earnings attributable to balances between $3 million and $10 million will be taxed at an effective rate of 30% (i.e. the existing 15% rate plus the additional 15% Division 296 charge).
Earnings attributable to balances above $10 million will face a 40% rate.

Slack Investor sees this as a welcome change of heart and a testament to the many persistent voices in the superannuation community that pointed out the flaws in the initial proposal. It is not often that Slack Investor is pleasantly surprised by a proposed tax outcome.

Yes, the S&P 500 is currently expensive

Slack Investor is a fan of using the forward adjusted S&P 500 Price/Earnings ratio (CAPE) to evaluate market value. Another way of looking at how expensive the S&P 500 is currently – is through a whole market yield analysis. When the overall market yield is high, this indicates that the market is cheap, lower yield (dividend) values represent an expensive market.

The median dividend yield value for the S&P 500 is 2.83%. The Mid-December 2025 value is 1.14%. This is approaching the lowest point in the 60 years that the chart represents.

Payday Loan Sharks

Slack Investor’s pre-Christmas bliss was interrupted by a cheery ad on SBS offering a loan from Cash Converters … with no fees!

I thought this was very decent of the Cash Converter’s crowd to help out this way – because in finance world we are always trying to reduce our fees and transaction costs. A search down to the details revealed that, sure, there were ‘no fees’ but there was an ongoing interest charge of 48% on amounts owing!

Interest is charged at a fixed rate of 48% per annum on the total outstanding balance _{– Cash Converters}

Admittedly, these loans are unsecured but in an environment where the comparison rates for various products are typically:

Home Loan: 4.8% – 6.5%
Personal Loan: 5.8% – 22%
Credit Card: 8.0% – 22%

These interest rates would seem outrageous! ‘Cashies’ are not alone in this space with the heavily advertised Wallet Wizard offering a 47.8 % loan interest and Nimble puts the screws in for 47.6%. There are many other harmless sounding short term loan providers with similar products, e.g. Swoosh, Sunshine, CashTrain, etc.

Slack Investor knows that there is a market for these payday loans to help manage unexpected bills and was glad that there is some form of regulation of this sector through ASIC. There was a big push to introduce protections in 2013 but these regulations applied specifically to loans less than $2000. Further regulations were introduced in 2022.

However, it is time to sharpen the ASIC regulation again, and with a few more teeth. Payday lenders are now pushing punters into the less regulated area of loans greater than $2000.

In the meantime, if you are in desperate need of cash in a hurry – try to avoid these payday loan sharks and apply for no interest loans through a charitable organisation like Good Shepherd. To get out of a debt trap you often need help and government-funded debt counsellors can provide this.

For an entertaining comedy/drama on Payday Lenders, Bank of Dave 2: The Loan Ranger is recommended – based on a true story (Netflix). Slack Investor offers festive greetings to all.

On the Hunt – November 2025 End of Month Update

Hunting Scene with Foxhounds
John Frederick Herring – Art UK

Slack Investor has a little bit of spare cash and his Macquarie bank savings accounts are offering a risk free (but taxed!) interest rate of 4.25%. Not a bad place to park your money temporarily. However, even in this risky environment, he would rather have his money working in a profitable company. He is continually hunting for opportunities.

Last September, he read about a profitable business in a Livewire discussion with Martin Hickson and Steve Johnson. They mentioned SKS Technologies a company that is gaining contracts in building data centres and other types of electrical and audio visual fit out work. Slack Investor put SKS on his watch list and did a bit of research. This is not advice, just a little journey into Slack Investor’s small mind and a case study on how he finds companies to invest in. This type of information gathering is something all investors should try to do before they press the ‘BUY’ button. Extra research offers no guarantee of success, but Slack Investor only aims for ‘mostly right’.

SKS Technologies Group (SKS)

My first port of call is always the Market Screener Finance page to see if this idea is worth exploring further. Their income, projected income growth and lack of debt looked fine.

Next he looked at the projected numbers on the business health and relative price. Projected Price to Earnings ratio (PE) was refreshingly low for a growing company. Return on Equity (ROE) was high indicating a very profitable business. Because of some recent successful tenders, Earnings Per Share (EPS) Growth was also very high. These type of numbers gave an extremely large Slack Factor. Was this too good? Is the recent growth inflating the numbers too much?

Slack Investor was recently burned by a few recent purchases in the pharmaceutical sector that had high projected growth figures and a subsequently high Slack Factor score. The stock price came crashing down when there were a few regulatory problems and doubt on the future growth.

Over 70% of their order book now comes from data centres, and that’s up from zero four years ago … At the moment, the company has an order book of $200 million, a tender pipeline of $500 million _{– Martin Hickson, 1851 Capital}

SKS is an unusual type of business for Slack Investor to be interested in. They submit tenders for their services and their income depends on whether their tenders are accepted – there is always some uncertainty about the future income flow of these type of businesses. However, things are running hot at the moment with a just completed acquisition of a similar business and, they have just announced a new $130m project.

I don’t see SKS as a long-term ‘set and forget’ holding as the tender process is competitive and results (income) are not assured. But for now, data centres are the big thing and SKS certainly have the established expertise and a growing tender pipeline. They also have won contracts with Defence and other government work. I will hold my small parcel (0.5% of Slack Investment Portfolio) and, with the lessons learned from recent pharma investments, watch for the first earnings downgrade – then exit with some dignity (hopefully).

Waiting … Waiting

Daily Price Chart for SKS Technologies – incrediblecharts.com

Sometimes, the numbers (fundamentals) on the business can be really good and the chart tells a different story. Slack Investor kept looking at the charts, weekend after weekend in October. SKS was caught up with a general bad feeling on the AI and data centre companies – with a subsequent price slide. The market thought that these sectors were ‘overcooked’ – and prices were falling. This changed on Monday 24 November 2025 when there was a 10% price rise after a positive AGM presentation. Somebody was buying. Slack Investor got onboard with this momentum at $3.70.

November 2025 – End of Month Update

Slack Investor is IN for Australian index shares, the US Index S&P 500 and the FTSE 100.

The S&P 500 (+0.1%) and the FTSE 100 (+0.0%) had a volatile but eventually flat month. For the ASX 200, a bit of a slide downwards (-3.0%). The UK Index (FTSE 100) needed its stop loss moving upwards as prices were 15% above the previous value. The new UK stop loss was moved up to the new ‘higher low’ of 9276.

All Index pages and charts have been updated to reflect the monthly changes – (ASX Index, UK Index, US Index).

Warren Buffet and Market Value – November 2025 Update

Warren Buffet and his offsider the late Charlie Munger are dead set Slack Investor Heroes – and a reminder that the USA offers a crucible for outstanding qualities to emerge in individuals – as well as, in some presidential types, some not so good qualities. Mr Buffet is a great investor and philanthropist and full of insightful but humble advice that is worth heeding. Every November he writes a letter to his Berkshire Hathaway shareholders and it is a delight to read in full. This will be his last shareholder letter as he is retiring at the grand age of 95.

‘Our stock price will move capriciously, occasionally falling 50% or so as has happened three times in 60 years under present management. Don’t despair; America will come back and so will Berkshire shares.’ _{– Berkshire Hathaway 2025 Newsletter}

Even investors as great as Warren Buffet are not immune to large market swings. After all, it is your long-term performance that is the most critical for a lifetime investor.

‘Since 1965, shares of Warren Buffett’s conglomerate, Berkshire Hathaway (BRK.B), have delivered a compounded annual return of 19.9% — almost double that of the S&P 500 over the same period.’ _{– Investopedia using data from the Berkshire Hathaway 2024 Newsletter}

Warren Buffet liked to look at current market valuation (S&P 500) as a ratio with the current US Gross Domestic Product (GDP). At 30 June 2025 the ratio was 217%. A long way above the trend line and a warning that the S&P 500 was growing at a rate much faster than the general economy – this is a danger sign.

The Buffet Indicator is the ratio of the total United States stock market to GDP. The ratio is now two standard deviations away from the historical trend line – from Current Market Valuation

Market Value – November 2025 Update

Slack Investor also likes to keep up to date with how the markets are travelling for value and he has been using charts for the Cyclically Adjusted Price to Earnings ratios (CAPE). This value is also known as the Shiller P/E Ratio after Robert Shiller the economics professor that made this measure popular. Slack Investor first started using CAPE as a ‘value’ tool in September 2021. The most recent post on Market Value was mid-April 2025 about 6 months ago.

For the following charts, Slack Investor uses monthly CAPE data from Barclays, the 40-yr mean is calculated and plotted together with the latest actual CAPE values up until 31 October 2025. A ‘fair value’ zone is created in green where the CAPE is within one standard deviation of the mean (average) – click images for better resolution.

ASX 200 CAPE Value 22.89 (11% above long-term av.)

ASX CAPE values – up to **31 October 2025**

FTSE 100 CAPE Value 18.24 (5% above long-term av.)

UK CAPE values – up to **31 October 2025**

S&P 500 CAPE Value 39.76 (59% above long-term av.)

US CAPE values – up to **31 October 2025**

The UK and Australian markets are not too overvalued. However, in terms of the Shiller P/E the S&P 500 has entered some lofty territory. Unfortunately, whenever the S&P 500 has a large correction the effects are usually felt in other markets.

There is some good research that links CAPE to long-term returns … and future returns are what gets Slack Investor excited. The predictive skill of the Schiller CAPE is not very good over 1-yr and 5-yr periods. However, it does show some skill for periods of 10 years and longer. The tight spread around the trend line indicates that the Shiller P/E might have some predictive skill.

Shiller P/E and S&P 500 10-year annualised forward returns since 1983. The data shows 41 years of S&P 500 10-year average annual returns based upon the Shiller PE ratio (from 10 years ago). Slack Investor has modified the chart and circled the 10-year average returns based upon the times when the Shiller P/E was previously around 40 – From Invesco.com

If this relationship holds, the average S&P 500 10-year annualised forward returns are predicted to be close to zero or negative. This indicates that now is not a good time to start buying the S&P 500. Tech stocks (with high P/E) have fallen sharply lately and this could be early signs of a readjustment.

Slack Investor is not one with predictive skills. He just plods along – staying mostly invested and knowing that he has his stable income pile to ride out any market gyrations. Cripes … even the great Warren Buffet’s Berkshire Hathaway stock had 11 negative years between 1965 to 2024. Slack Investor could only dream of emulating the Buff’s long term compounded annual return of 19.9% over 55 years.