Month: November 2025

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.

Ride that Horse! – October 2025 End of Month Update

Calgary Sun

Slack Investor reads a lot of finance news each week. Sadly, there now seems to be a portion of the finance news that seems to come from AI sources. However, there is still a lot of good stuff by real people – and he came across an excellent article by Carl Capolingua that had some great investor truths that apply to the current market.

A disciplined investor doesn’t fight the market – they respect it. They accept the market is responsible for their investing outcomes, win, lose or draw. They also accept that they have absolutely no control over the market or the outcomes it delivers. – Carl Capolingua, Livewire Markets

The original article focuses on the difficulty of letting go of investments that have shown a loss. Slack Investor is still searching for this zen state and has written about his own troubles with selling stocks that have had a sudden fall. However, the quote above sums up ‘the bargain’ that Slack Investor has made with stocks and their volatility. I don’t know when the next correction (or worse!) is coming … but I know it’s coming.

World Markets are Expensive at the Moment

Although Slack Investor collects his own data on relative market value using CAPE numbers, the remarkable Ashley Owen has produced a great graphic showing the relative size of the world markets and how expensive they are at the moment in terms of PE and Yield. Clearly, the US market looks over ripe and any corrections here will historically influence all other markets.

World markets plotted by PE Ratio and Yield – From the very erudite Ashley Owen of Owen Analytics

Short-term Returns are Volatile

The chart below shows that the S&P 500 returns for a calendar year are all over the place, but if you just hung on, and didn’t sell the S&P 500 when times were tough, you would be rewarded with an average annual return of 12.2% over 30 years. Not Bad. Australian shares have returned an average yearly gain of 11.5% from 1900 to 2020.

Yearly Returns of the S&P 500 (green columns) and 15-yr rolling returns (blue line) – From T. RowePrice

What to do when the Correction comes

‘If you have trouble imagining a 20% loss in the stock market, you shouldn’t be in stocks.‘ – Vanguard founder – John C. Bogle

Slack Investor has had no real luck in timing the markets – despite a disciplined 21-yr project trying to do this. There are those that can, Marcus Padley and his investment team have gone to 100% cash and reported this on 21 October 2025. Slack Investor hasn’t the knowledge, or gumption, to confidently predict market exits and entries – and yet, has done OK in the investing business without too much angst.

Slack Investor knows that for an ordinary person, the stock market is the place with best long-term returns with minimal transaction costs. The bargain – to accept volatility in return for long-term gains – is accepted.

  • He has his stable income pile to keep the dogs from the door.
  • He tinkers with his Investment Portfolio of predominantly growth shares, but mostly he leaves it alone.
  • He will not sell his shares after a correction and convert to cash.
  • He has elevated his cash position slightly (6% cash, 94% invested) in case some bargains come up post-correction.

These are choppy times and there is an uncertain near-term future – situation normal in the stock market. Some of his portfolio (e.g. CSL, WTC, TLX) have had big falls lately. However, Slack Investor has had a look at future revenue predictions and has not completely given up on these stocks. Though, CSL is losing its shine as a growth company in Slack Investor terms.

He will keep riding that stock market horse … and push to the forefront of his mind the pleasant times at the rodeo bar with his cowboy mates … reflecting on our glorious achievements.

October 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 (+2.3%) and the FTSE 100 (+3.9%) have continued their strong monthly growth. Slack Investor is pleased to stay on board but there he remains nervous about the US markets. For the ASX 200, (+0.4%) a flat month with plenty of volatility.

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