There is always a good reason not to invest.

That might seem strange coming from the Director of Research of The Motley Fool – a company that consistently preaches the benefits of long-term investing.

But it's true – there is always a reason not to invest. Which, ironically, is the same as saying there is always a reason to invest as well. 

Every market condition, every piece of news, and every economic indicator can be seen as both a risk and an opportunity. The key is to focus on the long-term potential rather than getting caught up in short-term fears.

The latest 'scare' came late last week, and stretched into this week as well. Weak jobs data and murmurs of a potential US recession. 

Indeed, that in itself could have pushed the market either way, at a time where bad economic news is often treated as good news. As backwards as that might seem, the rationale is that bad economic news could entice central banks – including the US Federal Reserve and the Reserve Bank of Australia – to cut interest rates, which would be good for business and consumer spending and, typically, good for share prices. When the 'R word' (recession) is also thrown in, though, it can often cause the market to panic.

But bad economic news aside, it was arguably the 'carry trade' that stole the show. This is something that many ordinary investors probably don't understand too well, with that uncertainty adding to the panic being felt.

What is a carry trade?

Imagine that your friend offers to lend you money for free. At the same time, another friend says he needs to borrow money from you, and is willing to offer you 5% interest for your trouble. You could borrow money from your first friend for free, and then make a 5% return by lending it to your other friend. You could make 50 cents by borrowing, and then lending, $10, or you could make $50 by borrowing and then lending $1,000. The more the merrier.

That's a really, really simplified explanation of a carry trade. And of course, it's much more complicated in the real world. But the point is, a carry trade is when an investor is able to borrow on the cheap from one party, and invest at a higher rate of return with another. The 'carry' is the difference in interest rates between what you pay, and what you get.

Snapping back to reality, in this case it was a country, Japan, that offered ultra-low interest rates. In fact, the country's interest rate had been negative 0.1% until earlier this year, before which it had sat at roughly 0% since the late 1990s (talk about cheap!).

Then, on 30 July 2024, the Bank of Japan increased interest rates for the second time since 2007, to around 0.25%. 

Source: Trading Economics

Compare that to the United States, where the federal funds rate is at a two-decade high of 5.25% to 5.50%, as seen in the chart below.

Source: Trading Economics

In the real world, currency exchange rates take much of this interest rate differential into account, so it's not as simple as borrowing at essentially 0% and investing at 5.5%. The potential returns are typically far less than those numbers suggest, which is how markets should work: the 'arbitrage' opportunity is essentially erased.

But there is the potential for some return – albeit typically a small one. And when the percentage return is small, you need to invest large sums of money to make it worthwhile. While that typically rules out ordinary investors, hedge funds and other large entities can borrow huge amounts of money (whereby a small return on a large sum of money can still generate pretty considerable gains). This is an important point: leverage is what makes the carry trade work.

Now, in this situation, investors were likely surprised by the fact that Japan raised interest rates. It had, after all, only increased rates one other time since before the Global Financial Crisis. When it raised rates, even to just 0.25%, the spread between Japan and the United States (and other markets) was narrowed, erasing much (if not all) of that profit potential. Because leverage had been used, in essence there would have been margin calls issued, whereby 'borrowers' of Japanese yen would have been forced into selling assets to make repayments.

Forced selling pushes down prices, which can lead to more margin calls, which can lead to more forced selling, and so on, as the vicious cycle continues.

It seems that the Bank of Japan has eased some of the fears raised, after it 'walked back' talks of further interest rate increases, at least while the market is unstable. That, in turn, has led to some relief on markets around the world.

Which takes me back to my earlier comments about there always being a time not to invest. This was just another example of that. You could easily justify waiting out the uncertainty, and investing after that. But you can be sure there'll be yet another reason not to invest even when that uncertainty eases: maybe something else around the world is causing unrest, or perhaps it's because you've just watched share prices rebound strongly, and you tell yourself "I'll wait until shares are lower again" (and if they're lower, chances are they're lower because of something else that has caused uncertainty!). 

Hopefully, you get my point by now.

At The Motley Fool, we're very focused on the long run. That's not to say that we don't care about what happens in the economy, nor that we don't take that into account when we analyse our businesses.

But it is to say that we do our best to look beyond those worries, and understand that the market has consistently gone up over time, despite those temporary shocks. Wars, changes of government, interest rate hikes, recessions, you name it… life goes on and years later, we often see these incidents (however bad they felt at the time) appear as mere blips on the historical stock charts.

In other words, there is always a reason to be invested!

Fool on!

The post Why you shouldn't invest right now (and why you should) appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• 3 amazing tech ETFs to buy and hold forever
• ASX 200 stuck in the red as investors wait for US lead
• PLS shares drop 5%: What's driving the move?
• With the gold price up on Monday, are Northern Star shares a good buy now?

Motley Fool contributor Ryan Newman has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Numerous influential figures have shaped the investing world throughout history, their strategies and insights continuing to guide modern investors. By studying their successes and failures, contemporary investors can glean invaluable lessons in risk management, market analysis, and long-term planning. These timeless principles, forged through decades of experience, remain relevant in navigating the complexities of today's financial landscape.

In this article, we delve into the story of 'The Witch of Wall Street', Hetty Green, a formidable and pioneering figure in American finance during the late 19th and early 20th centuries whose unwavering commitment to frugality and financial gain attracted admiration and criticism.

Premium content from our Investing Team

Hetty Howland Robinson Green was born in 1834 and died in 1916 at the age of 81. At the time of her death, she had a net worth of approximately $100 million, or $2.5 billion in today's dollars, making her the world's wealthiest woman at the time.

Though Hetty can thank an impressive inheritance for much of her early wealth (her grandfather and father were business partners in a whaling fleet, which they evolved to focus on shipping cargo), her savvy financial behaviour and decisions absolutely helped. She began reading financial reports in the newspaper by the age of six, opened a bank account for her saved nickels by the time she was eight, and soon learned how to trade shares.

Hetty became incredibly business savvy by observing how her father conducted business and negotiated deals. She developed a smart investment strategy for the portion of her wealth that she had control over (with much of her inheritance held in trust, and thus outside her control), and conducted extensive research into investment opportunities with a particular interest in railroads, real estate and government bonds.

Here's what the Smithsonian Magazine had to say about Hetty:

"Her handwriting was sloppy and riddled with misspellings, but she surely knew her numbers. More importantly, she knew how to increase them. She oversaw tremendous real estate deals, bought and sold railroads, and made loans. She was particularly adept at prospering during the downfall of others; buying falling stocks, foreclosing properties, and even holding entire banks, entire cities, at her mercy through enormous loans. Depending who you asked, she was either a brilliant strategist or a ruthless loan shark."

Though her success is undeniable, her financial story (summarised above) is somewhat straightforward. What isn't so straightforward is her absolute fixation on making and maintaining money in her personal life.

Despite her enormous wealth, she refused to seek medical attention for herself or her children because of the cost. Some reports suggest that her own son's leg had to be amputated due to infection because she refused to bring him to the doctor, while she personally endured a painful hernia for 20 years before finally agreeing to pay $150 to have it surgically repaired. The clothes she wore were fully black, which some reports suggest she wore until they turned mouldy, and she wore these even while brokering broker business deals. It was this behaviour and appearance that earned her the nickname "The Witch of Wall Street".

Source: HeadStuff

In other circles, she was also known as "The Queen of Wall Street" as both men and women sought her guidance in an otherwise male-dominated world of business and finance.

According to Lighting The Way: Historic Women of the SouthCoast, Hetty considered her most valuable gifts to be the jobs that her wealth created through her investments in the United States.

Finding Balance

More than 100 years after Hetty Green's passing, many families today face significant financial challenges due to high interest rates and rising living costs. These economic pressures can make it difficult to find a balance between saving and investing, but also still enjoying life. Though noble, Hetty's personal sacrifices can be considered nothing short of obsessive and highlight that extreme frugality isn't the only path to financial health nor success.

Here are some of the things that individuals and families today can do to navigate these challenging times, without sacrificing your quality of life.

First, prioritise essential spending. Things like food, healthcare (we're also very lucky to have free access to quality healthcare here in Australia) and housing are unavoidable, although you may be able to find ways to reduce those costs.

On a personal note, my family subscribes to Woolworths (ASX: WOW) Everyday Extra service which costs us $70 per year but gives us 10% off one shop each month. My wife, who typically does the shopping, does one large shop each month (and three smaller ones), and can save around $45 each month following this strategy. Over the course of a year, that's $540 saved by paying just $70 initially (Please note, I am not receiving any kickback or compensation for mentioning this service).

Second, budget wisely. Create a budget that accounts for your current financial situation, and identify areas where you can cut unnecessary spending. At the same time, allocate a portion of your budget for leisure and enjoyment. You might need to cut back (e.g. dinner and a movie night once a month rather than once a fortnight, for example) but it's important to still enjoy life.

Third, continue to invest for the future. Granted, this can be difficult when other costs are going up, but it's crucial to invest even small amounts to build it into a habit. Consistent, disciplined investing can yield significant long-term benefits (that's likely why you're a member of The Motley Fool, after all)!

Fourth, build an emergency fund. Even if you can only afford small contributions for now, it's necessary to have a financial cushion to provide peace of mind in case of a crisis. You may even want to consider seeking professional advice from someone who is licensed to provide advice at the personal level (our financial licence allows us to provide general advice only).

Foolish Bottom Line

You don't need to live like Hetty Green in order to set yourself up for tomorrow. By prioritising essentials, budgeting wisely, investing consistently and maintaining an emergency fund, we can build a secure financial future while still enjoying the present.

Indeed, the goal of investing and saving is to enhance our lives, not to restrict them.

The post Modern Lessons From The Witch Of Wall Street appeared first on The Motley Fool Australia.

More reading

• How to build an ASX share portfolio that can survive a market selloff
• Woolworths shares vs Coles: Buy, hold, or sell these ASX giants?
• Why has the ASX 200 given up its early rebound today?
• Buy, hold, sell: Coles, Telstra, Wesfarmers, and Woolworths shares
• How to build a $1 million ASX share portfolio from zero

Motley Fool contributor Ryan Newman has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Thus far, 2022 hasn't been kind to investors in the share market. Although it's well established that temperament and patience are equally as important — if not more important — than skill and knowledge to succeed as an investor, no doubt the magnitude of this bear environment has tested the resolve of even some of the more experienced investors.

The question is, should investors sell their shares, what could they do with the proceeds? Where in this environment can they hide?

High Yield Corporate Bonds

Well, there's always corporate bonds. Rather than buying a company's shares (i.e. equity), bonds are a form of debt sold by a business to raise capital. Investors will typically receive fixed interest payments (coupons) in return for effectively providing a loan to a business, but they won't receive any extra income if the company performs well.    

Depending on the business, bonds tend to be less risky (but also less rewarding) than shares because, in the event of liquidation, all creditors are repaid before shareholders may see a cent.

But bonds still carry risk. High-yield (HY) bonds, typically offered by companies with lower credit scores, naturally carry greater credit risk than investment-grade (IG) bonds (those offered by businesses with sound credit scores, like the big-four banks). If we were to have a recession, or if economic conditions continue to become more challenging generally, you'd tend to see more corporate defaults. 

So whilst high yield corporate bonds sound good in theory, they do carry a higher risk because the underlying companies have poorer credit scores. 

Because of that heightened risk, the returns required by investors in high yield bonds increases; that leads to a higher yield and, consequently, a lower bond price — a bad thing for bondholders (bond yields and prices move in opposite directions).

Investment-grade Corporate Bonds

Okay, so maybe you could look at IG bonds instead. The risk is lower (because the underlying businesses have a stronger credit rating) and therefore expected returns (the interest payments for investors) aren't as high. You absolutely could do this, and bonds are a staple in many well-diversified portfolios. Would you want to put all your capital in them, though?

I'm not so sure.

Let's assume for a minute that you focus on the short-dated bonds (say, 12 months or less). If you hold the bond to maturity, you might pocket a couple of coupon payments and get your principal repaid at maturity. 

But the yield (your overall return) isn't likely to be very significant; although some would justifiably make the case for capital preservation, particularly in the current environment. The return also might not be enough to exceed inflation. For instance, annual inflation in Australia reached 6.1% in the June quarter, and the Reserve Bank of Australia (RBA) expects inflation could end up at 7.75% this year. Inflation is even higher in countries like the US and UK, so investors are currently finding it difficult to generate real returns (returns above the rate of inflation) from defensive assets. 

Investors could instead opt for longer-dated bonds (say, 5-10 years, or more!). These offer the potential for greater returns over time, partly through (typically) higher yields as well as due to shifts in the yield curve (which rises and falls based on expectations of future interest rate movements, amongst other factors). But if rates continue to rise, so too should the yield curve, which could negatively impact the value of your bonds – recalling that bond prices fall when yields rise.

Government Debt

The same goes for government bonds, which carry even less risk than IG bonds. As we know, the lower the risk, the lower return we can expect from our investments. 

At the moment, 10-year Australian government bonds can be bought with a yield of 4.0%, meaning a negative real yield today (given that inflation is running hot) and minimal real return potential, assuming inflation returns to the RBA's target range of 2%-3% over time. 

Cash

So, rather than bonds, maybe investors should just carry cash. But as the least risky investment class (Australian deposit guarantees exist), we can expect the lowest returns from this asset class. 

One positive for cash is that as interest rates rise, the variable rate (or yield) on savings accounts increases. This is in contrast to bond coupons which are typically 'fixed' payments. 

Still, yields on cash are unlikely to generate a positive real (i.e. after inflation) rate of return.

Cash, however, does provide some optionality during volatile times, but it loses its usefulness over very long periods of time.       

Real Assets

Real Assets (such as commercial property and infrastructure assets) can offer some protection against inflation, as they typically generate strong cash flows with contracted or regulated price increases over time. For instance, a shopping centre landlord may set annual rent increases linked to the consumer price index (CPI), or a regulated toll road operator may have CPI-linked toll escalations.   

Listed real assets can also be bought and sold like other companies on the share market, and the market's inherent volatility means these assets can be bought below fair value from time to time.

Like any asset class, though, real asset investments are subject to a range of risks, including economic, liquidity and operational risk. They can also be pet expensive to maintain. Because real assets are typically funded with significant debt, there's also the potential for higher borrowing costs as interest rates rise, as well as declining valuations as asset prices and yields rebase across the economy.

The challenge with investing in real assets at the moment is that they are susceptible to rising interest rates which not only reduce their theoretical valuation but also reduce overall demand as less people can afford the mortgages and loans required to finance the purchase. 

The Case For Shares

Overall, when inflation is running high, often the best place for investors (with long-term horizons) to hide is in strong cash flow generating assets with growth potential. As you may have guessed, high-quality operating businesses can exhibit both these characteristics, making listed equities one place for investors to find opportunities to 'hide'. 

Of course, shares aren't without risk, either. We've witnessed plenty of businesses suffer from the impacts of inflation and supply chain pressures recently. And again, investors can absolutely make a strong case of 'capital preservation' for some of the above asset classes.

But bear in mind, the share market has already endured heavy falls. To cash out now (if you haven't already) could be to do so at precisely the wrong time. Indeed, just as one investor could argue the case for capital preservation from government debt or holding cash, another investor could argue that those safer asset classes won't be enough to help offset increases in inflation. They could also argue that there are plenty of attractive opportunities presenting themselves on the ASX for those willing to put up with temporary uncertainty. 

Compared to other asset classes, the long-term income and capital growth potential of certain equities remains very attractive. With some equity indices materially lower than they were just at the start of the year, there are inflation-beating opportunities that are being thrown out with the rest of the market.

Vanguard's study of asset class returns over 30 years shows that whilst shares are very volatile, they generally provide higher returns over the long-term. 

Foolish Bottom Line

It should be noted that we fully endorse investors having a well diversified portfolio. 

Not only does that mean investing across different businesses within different industries, and with different risk exposures; it also means maintaining some cash and balancing your exposure across different asset classes (e.g. real estate, fixed income, etc.).

However, the point is that each asset class has its own risks and potential benefits. To withdraw everything from the share market in the face of volatility to put it in bonds, for instance, is still likely to leave you exposed to credit or other risks while potentially limiting your upside. Likewise, to move all your capital into real estate could yield you some real assets, although those real assets may come under pressure from rising interest rates and a cooling economy.

The reality is that, in such an uncertain environment, there is no 'perfect' place to hide. With shares down considerably from their highs, however, we firmly believe there are attractive opportunities presenting themselves. That is, investors have sold out — possibly out of either necessity or panic — of businesses that are worth more than they are currently trading for. It may take some time to get back to what we consider to be more reasonable values, but we firmly believe that will happen.

In that sense, we strongly encourage investors to sit tight. In fact, we'd go a step further and encourage them to buy while prices are down, and potentially put themselves in a position to outpace the rate of inflation over the coming years.

The post Where to hide? (And the case for buying shares) appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• 3 amazing tech ETFs to buy and hold forever
• ASX 200 stuck in the red as investors wait for US lead
• PLS shares drop 5%: What's driving the move?
• With the gold price up on Monday, are Northern Star shares a good buy now?

Motley Fool contributor Ryan Newman has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

"If you're going through hell, keep going."

The above quote is often attributed to Winston Churchill. It sounds like something he might have said, although there is no evidence to suggest that it was, in fact, his.

As per Quote Investigator, it's possible that it was adopted from a different source, such as "Christian Science Sentinel", a religious journal, in 1943. There, the story went that a man was asked how he was, to which he replied: "I'm going through hell!". His friend responded:

"Well, keep going. That is no place to stop!"

No place, indeed.

It's been a rough ride, Fools. These past few months have tested the resolve of even the most experienced investors, and have no doubt seen many give in to the market's pessimism.

But to do so now would, I believe, be consequential. 

The market is driven not by perfect information, but instead by incomplete information compounded by investor psychology. When panic sets in, people rush for the exits and leave behind those who are more focused on the underlying businesses and long-term wealth creation.

Bear markets, which can feel like hell for investors, are temporary. And while it mightn't feel like it at the time, this is where the foundations are set for the next bull cycle. 

Companies like JB Hi-Fi Limited (ASX: JBH), an Australian discretionary retailer recently reported a record sales result. Meanwhile, many companies in the United States that have recently reported their second-quarter earnings results – Netflix (NASDAQ: NFLX) among them – have also surprised to the upside.

Investors who sell out now, or merely remain on the sidelines, might avoid any further pain, should the market fall further. But many will also miss out on the gains which I expect will come to those who remain patient.

I'm not trying to call the bottom of the market. I don't know when that will be, nor if it has already been. But I will echo the words that Winston Churchill may or may not have said:

"If you're going through hell, keep going."

The post 'If you're going through hell, keep going' appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• 3 amazing tech ETFs to buy and hold forever
• ASX 200 stuck in the red as investors wait for US lead
• PLS shares drop 5%: What's driving the move?
• With the gold price up on Monday, are Northern Star shares a good buy now?

Motley Fool contributor Ryan Newman has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Netflix. The Motley Fool Australia has recommended Netflix. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Rising inflation and interest rates have probably got you thinking about the potential impact on your wallet.

It's certainly crossed my mind. So I spent time thinking about ways to stretch my family's money further.

I'll note that it was also important to me and my wife to have money left over for savings and/or investments.

So, here are some ways that I'm saving money.

Budget 

First and foremost, I got a budget going. 

I used a free budget template on Google Sheets which I found here. At the top right of the page, click "Template Gallery" and I chose the "Monthly Budget" option.

I got pretty precise with my estimates, using actual figures I came up with by analysing my bank statements from the past 12 months. In reality, however, using 'reasonable estimates' is a good starting point to seeing where your money goes each month.

You'll probably be surprised at how much you're spending on some items, which could be a perfect starting point to make savings!

Put away for big expense items 

I think this is a big one for most people. One month (or week, or fortnight – whatever your schedule for getting paid is) you seem to have plenty of spare cash to spend, and the next you're back in the red. The culprit: a large land tax payment, a child's birthday, or a car registration. Sometimes you can split these payments into more manageable bites, but others you can't. When that's the case, set cash aside regularly for these payments.

For example, if you expect your land rates bill to be $1,500 for the year, that's $28.85 per week or $125 per month. Sure, it's still a decent chunk of change, but either of those options are probably more bearable than a $1500 lump-sum payment.

So, list these big-ticket items in your budget. Add up the total annual amount due for those and chip away at them through the year. In effect, you're smoothing out your expenses and setting yourself up for a better routine.

Choose annual payments

This mightn't suit everyone, but where possible I've changed my subscriptions to the 'annual' payment option. 

Take Disney+ – a streaming service from Disney (NYSE: DIS) which my kids love – as an example. It's currently $11.99 per month, or $119.99 for the year, which works out to be $10 per month – a saving of 16.6%. Then, in the months between, I'm putting away $10 per month into a separate account (just like I am for the land rates bill and water bills, etc.) to make sure I've got the money set aside for next year's payment.

In doing so, though, it's important to be careful not to create a cash-flow problem for yourself in the immediate future.

Find discounted alternatives

Human beings are typically a pretty routine species. We find something that works and often stick with it for simplicity. But that habit might be costing you. 

Here's an example. To buy a 48-pack of nappies costs us $32 at Woolworths (ASX: WOW). I decided to check out prices on Amazon (NASDAQ: AMZN)'s store. Not only was it cheaper, I could get them even cheaper still by setting up a recurring purchase of that item. You won't be able to do that for everything, but it's worth a look for some of your more regular purchases.

Identify other habits

Speaking of habits, it could be worth looking into habits elsewhere in your life. Our grocery bill is typically pretty large. One way we can cut that back is changing what I have for lunch. I was regularly buying pre-made salads from Woolworths for simplicity at $6 a pop. It's convenient, sure, but I can make something just as healthy (if not healthier) for less.

Invest in yourself

From the get-go, I figured out what my family's monthly income was expected to be. After I accounted for the absolute top-priority payments (e.g. any debt repayments), I calculated what 10% of that total income would be and committed that to savings and/or investments.

This takes discipline and it could well require you to cut out some other expenditures that you deem to be less necessary. 

But this is an important step. After all, very few of us want to work forever. Saving money effectively buys you flexibility with your time – maybe not today, but in the future.

Interest rates are going up, which means any cash saved could earn a higher return. Perhaps even more opportunistic is the fact that the stock market has also come down, affording those people with a long-term time horizon an opportunity to buy shares at very attractive prices. 

If you can commit to setting aside a certain amount of money each week, fortnight, or month, doing so could be an excellent way to reward the future you.

The post Here's how I'm saving money, despite higher inflation & interest rates appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• 3 amazing tech ETFs to buy and hold forever
• ASX 200 stuck in the red as investors wait for US lead
• PLS shares drop 5%: What's driving the move?
• With the gold price up on Monday, are Northern Star shares a good buy now?

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Ryan Newman has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet (A shares), Alphabet (C shares), Amazon, and Walt Disney. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2024 $145 calls on Walt Disney and short January 2024 $155 calls on Walt Disney. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, and Walt Disney. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Australians have been inundated with new rules and restrictions in relation to the coronavirus crisis. Some of these regulations, we're being warned, could last for 6 months, or perhaps longer, to help stem the rate of growth in coronavirus cases around the country.

In the chart below, the blue line represents the total number of reported cases in Australia (measured on the left axis). On 22 February there were 19 cases; we surpassed 100 cases on 11 March, eclipsed 1,000 cases on 21 March, and had 5,687 cases yesterday, on 5 April. 

That represents a compounded daily growth rate of 14.2% over 43 days. If we continued at that pace for another 43 days, we'd have 1,702,209 cases by 18 May. 

What's more, using the World Health Organization (WHO)'s estimated fatality rate of 3.4%, more than 57,800 people would have succumbed to COVID-19, the disease caused by the coronavirus.

As is clear from the chart above, however, the rate of growth has dropped off, substantially. 

In fact, at one point only a few weeks ago the coronavirus case numbers were rising more than 25% daily, compared to low single-digit growth today. Does this mean that the restrictions put in place are working?

How effective are these restrictions?

This is, in large part, the result of government intervention, which has resulted in the unprecedented restrictions we are currently facing. 

Below is a timeline of when those restrictions were put in place (notably, this is not an exhaustive timetable — many other restrictions, including state-specific restrictions, have also been put in place).

The chart also differentiates between new confirmed cases and new infections, assuming an incubation period of 6 days (which is the incubation period for the median case). 

As an example, while the Federal Government's Stage 2 restrictions came into force on 24 March 2020, we would assume that would have an immediate impact on new infections, but those new cases would not be confirmed by testing until 6 days later. 

This chart is by no means perfect. While I have assumed an incubation period of 6 days (again, this is considered the median incubation period), the incubation period for coronavirus cases is currently estimated between 2 and 14 days.

But I think it does give a pretty good indication of the effectiveness of the restrictions themselves.

Blocking arrivals from Iran, South Korea, and Italy, for instance, likely went some way towards reducing imported coronavirus cases from certain 'coronavirus hotspots' around the world, but others were still being imported undetected from countries like the United States.

The Stage 1 and Stage 2 restrictions enforced by the Federal Government, on the other hand, appear to have had a much more significant impact. These involved strict social distancing rules, and the closure of various venues such as gyms.

Coronavirus cases by state

The bulk of Australia's coronavirus cases are located in New South Wales. Its overall share of Australia's coronavirus cases has remained steady at approximately 45% between 16 March 2020 and 5 April 2020, growing from 134 cases to 2,580 cases in that time.

Pleasingly, however, each of Australia's states and territories are now taking more than 6 days to double their cases. The big outlier is Northern Territory, which is experiencing case growth of 86% every 6 days, although that is off a much smaller base (it had just 26 recorded cases on Sunday 5 April, compared to 14 cases 6 days earlier). Victoria is experiencing the next highest rate of 6-day growth at 38%, followed by New South Wales at 35%.

The rate of daily growth, on the other hand, has slowed to low single digits. While that does not welcome complacency (more on that in a moment), it is a very pleasing statistic.

Testing for coronavirus

When we talk about the number of coronavirus cases, one thing that is often overlooked is the number of tests being conducted. Without testing, a country could, theoretically, claim to have no official coronavirus cases.

Likewise, without testing the entire population regularly, there is no way of knowing exactly how many actual coronavirus cases there are. Hence, it is likely there are many, many more individuals who have coronavirus and are showing only very mild symptoms, or perhaps none at all, who are not included in the country's official coronavirus cases.

In many ways, it is those individuals who we need to be most careful to avoid. Ironically, they are the ones who are more difficult to detect, hence the importance of the government's strict social distancing rules (that way, we avoid becoming infected from people who may not even know they are infected).

According to the Federal Government, 297,000 tests had been conducted by 5 April. That represents a testing rate of approximately 11.6 tests per 1,000 people in Australia, with 1 in 52 of those resulting in a 'positive' result.

That is a high rate of testing by international standards. According to Worldometers, the testing rate in Italy and Germany is roughly 10.9 tests per 1,000 people, while the United States has tested approximately 4.9 per 1,000 people.

As at 5 April 2020, more than 56,000 tests had been conducted in Victoria, and 121,443 tests had been conducted in New South Wales.

On a per capita basis, South Australia and New South Wales appear to be doing the most testing (19.8 tests per 1,000 people, 16.6 tests per 1,000 people respectively). 

Based on testing figures from the Federal Government, Victoria, Tasmania and Western Australia have conducted less than 10 tests per 1,000 population.

However…

It is also important to note that Australia's rate of testing has not been scaled up. In 3 of the past 4 days, between 6,000 and 7,000 tests have been conducted each day, compared to more than 10,000 daily tests which were being conducted each day late in March.

Hence, the lower number of cases being detected each day recently may also be a function of lower testing.

Again, this suggests that the number of Australian coronavirus cases is likely much higher than the official number suggests.

No reason to become complacent

Indeed, there are many reasons to be positive about the declining growth in coronavirus cases, and also about Australia's low fatality rate (currently 0.6%).

But these positive outcomes have also raised certain doubts from some corners of the community. Namely, some people wonder: 1) whether the restrictions enforced by the federal and state governments were an overreaction; and 2) whether things will go back to 'normal' in the next few weeks.

In my opinion, the answer to both those questions is 'No'.

To the first question, here's an analogy. If you outlay for house insurance and, after 20 years, your house hasn't burned down, was buying the insurance an overreaction?

Without these restrictions, the rate of growth would very likely have been much higher than what we are experiencing now. In a recent interview, Prime Minister Scott Morrison said that without these measures, a further 5,000 Australians would have been infected with coronavirus.

By my numbers (based on the growth in cases that Australia was experiencing), I would suggest that number would have been closer to an additional 10,000.

At that stage, our hospitals would more than likely have already become overwhelmed, and our fatality rate would likely have been much higher (due to many individuals not receiving the level of care required).

To the second question, growth in coronavirus cases is slowing. But as I alluded to above, there are likely still many cases that have gone undetected in the community.

The chart below, from the Australian Government, shows the source of COVID-19 transmission by state and territory. The light blue bars and the grey bars, which appear to add to around 600–700 cases in aggregate, are either under investigation or locally acquired from an unknown source. 

Indeed, overseas acquired cases represented the bulk of Australia's new cases in the early days of the coronavirus outbreak. Now that that source of infection has slowed dramatically (due to travel bans), new cases appear to be mostly from within the community. 

Hence, local transmission still represents a large threat, and could result in an increase in cases growth if individuals begin to become complacent.

The chart below shows a hypothetical scenario whereby all restrictions were removed today. It assumes a 3% rate of new case growth for 5 days, with growth then gradually increasing to 20% per day in 15 days. 

Given the rates of growth experienced in recent weeks in Australia, and the rates of growth experienced internationally, that does not seem like an unreasonable expectation.

The chart is shown on a logarithmic scale. Again, assuming all restrictions were relaxed, we could theoretically be adding more than 100,000 cases per day by 12 May.

Hence, relaxing the restrictions too soon, or too abruptly, is by no means in our best interests.

How is the share market holding up?

The S&P/ASX 200 Index (ASX: XJO) soared last week, and has continued to recover ground this morning. At time of writing, the market has risen 127 points or 2.5% to 5,194 points. The Commonwealth Bank of Australia (ASX: CBA) share price is up 2.6%.

Personally, I feel the best way for investors to approach this market is with caution. Volatility levels have certainly declined, but that doesn't mean there won't be more bad news, and that can certainly impact share prices. 

Hence, perhaps the best way to buy into shares is by taking small nibbles, particularly in businesses you feel are well equipped to handle the current crisis. Strong balance sheets are a must in this climate, while those businesses that are able to continue operating mostly through remote work are ideal.

For instance, many cloud-based businesses such as Elmo Software Ltd (ASX: ELO) and Bigtincan Holdings Ltd (ASX: BTH) have both adapted to remote work. 

On the other hand, companies such as Flight Centre Travel Group Ltd (ASX: FLT) have been forced to make massive cost reductions and participate in heavily dilutive equity raises. With a highly uncertain outlook in the travel sector, I'm certainly not investing in that space right now.

Foolish bottom line

A picture is worth a thousand words and whilst the charts above demonstrate that we are making progress in the fight against COVID-19, the battle is not yet over. Scott Morrison has suggested that we get used to the idea of these heavy restrictions for 6 months. Despite the pleasing progress that has been made, you shouldn't expect those restrictions to be lifted any time soon.

This should also influence your investing perspective. Look for businesses that are equipped to weather the storm, and those that can continue operating under the tough social distancing rules (e.g. those with many workers who can work remotely).

The post Coronavirus (COVID-19): 6 charts every Australian needs to see appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• ASX 200 stuck in the red as investors wait for US lead
• Growthpoint Properties Australia matches FY26 guidance with 18.4c distribution
• Centuria Capital Group launches $300m equity raising for AI Factory and real estate expansion
• Metcash shares: FY26 profit edges lower, dividend maintained

Ryan Newman has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Elmo Software. The Motley Fool Australia owns shares of and has recommended BIGTINCAN FPO, Elmo Software and Flight Centre Travel Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

A quick note: A version of this article was previously released for our Motley Fool Pro 2.0 service. We are making a revised version available for fool.com.au readers. 

The reason we are doing this is because we believe that, in a time like this, people need a variant perception as well as a longer-term mindset, which we believe this commentary contains. Right now, people around the world are struggling to see how things can get better, or how anything will ever get back to 'normal'. 

Yes, the future is very uncertain right now, but this is not the first crisis humans have endured. We will endure, and we will see better days. That is the message we want to share with as many readers as possible. 

Very few — if any — individuals could say that their lives have not been impacted by the current coronavirus crisis.

Not only are we being (necessarily) forced into isolation, many jobs have also been temporarily or permanently displaced, others are having to quickly adjust to new living or working arrangements, and companies are being forced to adapt on a daily basis.

No doubt about it, things are tough right now. And, in all likelihood, they're going to get tougher before conditions begin to ease.

But, in truth, things may never go back to 'normal' — at least not in the sense we've become used to. That isn't to say that the coronavirus won't pass; rather, I think we should expect some things to change forever — many, perhaps, for the better.

Innovation through crisis

Recall a time when you were driving to or from work and you saw a large traffic jam ahead. Or perhaps a road closure due to planned works. You quickly detoured and found an alternate way to your destination. 

Maybe, just maybe, you found that you actually prefer that alternate route — because it's faster or because you enjoy the scenery more — and decide to travel that way on a more permanent basis.

The scenario described above is hardly a crisis — certainly not when you compare it to the one we currently find ourselves in — but it does demonstrate how unforeseen circumstances can change our behaviour. Without that traffic jam or road closure we'd have likely just stuck to our old ways and never even stopped to consider how we could improve.

For many companies and individuals, doing things the 'ordinary' way is no longer feasible (at least not for the foreseeable future) so they are being forced to adapt and innovate. They're being forced to make quick decisions and to take risks, while at the same time considering carefully, and with discipline, how they spend their precious capital. 

At the same time, they're being presented with new problems that we've never had to face before — nor one that many of us ever imagined possible. And with new problems come new needs and new solutions, some of which may well prove to have a major influence on our future.

World War I, for instance, was the catalyst for many innovations, some of which are still widely used today. The 'radiological car' (now known as 'portable x-ray') was developed by Marie Curie to bring this medical technology from the big cities straight to the battlefield. Air traffic control was also born through invention by the U.S. Army which enabled communications between an operator on the ground and the pilot, as well as pilot-to-pilot. 

Meanwhile, Walt Disney Co (NYSE: DIS) was originally incorporated in 1929, just as the Great Depression was getting started. Recognising that the world needed to be given a good reason to smile, brothers Walt and Roy Disney released their first full-length animated film, Snow White and the Seven Dwarves, just after the Great Depression ended.

These examples highlight how a crisis can be the catalyst for necessary change and innovation. And that innovation can have a very positive influence on our future.

What does the future hold?

If you've been keeping an eye on international share markets, you might have noticed that while many stocks have fallen sharply, others have rocketed higher.

Back to the office?

Zoom Video Communications Inc (NASDAQ: ZM) is one such business. Zoom had already taken the world by storm with its cloud-based video conferencing tool. With travel severely restricted, Zoom is no doubt receiving even more attention now than ever before.

That demand may subside if employees shift back to their corporate offices. On the other hand, there is no guarantee that offices will return to how they were, pre-crisis.

Corporations spend a fortune fitting out and renting their corporate office spaces and incur numerous overhead costs. Now that many are enforcing strict work-from-home measures, while some companies will see a dip in productivity others may recognise substantial improvements. 

I have personally worked from home for a number of years now and find that I am much more productive working in my own space. Plus, I consider myself to have a great work-life balance (made much easier by the fact I don't have long commutes to and from work each day). 

By offering that flexibility, some workplaces may find they experience lower staff turnover, too.

Without those additional overheads, some companies may be able to increase staff salaries and book more profit. It could also mean less business travel and making greater use of video conferencing tools such as those offered by Zoom, and other workplace communication tools like Slack Technologies Inc (NYSE: WORK) or Trello, now owned by the Australia-based Atlassian Corporation PLC (NASDAQ: TEAM).

In fact, Microsoft Corporation (NASDAQ: MSFT) recently reported that it had seen a 775% increase in its cloud services in regions that have enforced social distancing, or shelter-in-place orders.

For those companies that do ask employees to return to the office, perhaps they will begin enforcing split shifts. That would require less office space and could ensure customers' needs are met around the clock.

Telehealth services

Telehealth services, including those provided by Teladoc Health Inc (NYSE: TDOC) — which I own shares in — also appear set for a boost. While many healthcare providers and systems may have been slow to recognise the potential benefits of treating patients online (where possible), they are now being forced to do so for their patients' safety, as well as their own. 

Where symptoms can be described via a phone call or online session, and scripts provided remotely, that could reduce the need for those time-consuming doctor's visits. That is, you can continue going about your day until your doctor pings you that they're ready to see you.

I think wearable technology will help with this adoption. Apple (NASDAQ: AAPL)'s Apple Watch, for instance, can provide ECG readings which may enable virtual monitoring of a patient's heart by their cardiologist. 

The growth of telehealth will, of course, depend on allowances from the government and insurance providers. As an example, Medicare has provided product codes for telehealth services provided by allied health professionals, although those are currently temporary to see us through the coronavirus crisis. They may become more permanent if they are widely adopted and healthcare providers recognise the many benefits.

Online retail

Retail is unfortunately shaping up to be one of the biggest corporate victims of the current crisis. Many around the world have been forced to shut their doors, and others are experiencing massive slumps in activity with consumers reluctant to leave their homes (or, in many cases, being forced to remain isolated).

With mass job losses, many will also cut back on what they deem to be non-essential spending which will, unfortunately, likely see some retailers go under.

But some are coping better than others. Amazon.com (NASDAQ: AMZN), for instance, has opened 100,000 new positions to help the ecommerce giant cope with a significant increase in demand. 

Woolworths Group Ltd (ASX: WOW) and Coles Group Ltd (ASX: COL) are also taking on new workers to help them deal with this unprecedented situation. With people reluctant to leave their homes, many will turn to Woolworths' and Coles' home delivery options (where possible*) and may well continue to shop that way when this crisis subsides.

*Note that Woolworths and Coles are prioritising delivery to their most vulnerable customers, so some people may not be able to access these services currently. 

Supply chains

While we will continue to rely on foreign suppliers, the severe restrictions on movement throughout the coronavirus crisis so far may make some importers reconsider their needs.

Audinate Group Ltd (ASX: AD8), for instance, recently moved some of its manufacturing from China to Malaysia. The rapid spread of the coronavirus around the rest of the globe may force its hand to diversify supply chains even further. Hence, some local manufacturers may benefit.

Climate response

The coronavirus crisis is a tragedy. But through this, we must also not forget about the other major crisis facing humanity — climate change. 

With entire nations shut down, there have been some very interesting reports of less polluted air and waterways, giving our environment a much-needed breather. Venice's Grand Canal, for instance, is much clearer while nitrogen dioxide levels over China reduced significantly, too.

Perhaps, governments and citizens recognise the noticeable difference that less activity has made and drive a longer-term change. 

For instance, people whose lifestyles depend on regular long-distance travel may think twice in the future (again, this may be a boost for video conferencing technology where that travel is work-related) while people who continue to work from home may install solar panels (as I have recently done).

Unfortunately, the desire to get economies back up and running as quickly as possible may delay this positive change. But it is important that we continue to recognise this threat, and also realise the significant improvements that can be made over time through change.

Foolish bottom line

We will get through this coronavirus crisis. Crises end, people adapt and societies can experience revolutionary changes — many of which are for the better. Rather than focusing on the short-term pain, consider the changes we may soon see and the opportunities that may rise from the ashes.

The post Innovation through crisis appeared first on The Motley Fool Australia.

More reading

• How to build an ASX share portfolio that can survive a market selloff
• How to invest in ASX shares when you can't find stocks to buy
• This ASX tech stock just jumped 20% after hitting a 52-week low
• Woolworths shares vs Coles: Buy, hold, or sell these ASX giants?
• Why has the ASX 200 given up its early rebound today?

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Ryan Newman has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon, Apple, Atlassian, Microsoft, Slack Technologies, and Walt Disney and recommends the following options: long January 2021 $60 calls on Walt Disney, long January 2021 $85 calls on Microsoft, short April 2020 $135 calls on Walt Disney, short January 2021 $115 calls on Microsoft, short January 2022 $1940 calls on Amazon, and long January 2022 $1920 calls on Amazon. The Motley Fool Australia owns shares of and has recommended AUDINATEGL FPO. The Motley Fool Australia has recommended Amazon, Apple, Slack Technologies, and Walt Disney. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

One of the burning questions that is no doubt being asked by virologists, epidemiologists, medical professionals and politicians alike, is why Italy has been hit particularly hard by the novel coronavirus, Covid-19.

A quick disclosure: I am none of the above, nor do I claim to be any sort of expert. But I do have some thoughts to share.

It Could Have Been Anyone…

Until 15 February, approximately 99% of all reported coronavirus cases were limited to China. And within China, the vast majority of those cases were restricted to Wuhan in the Hebei province. 

There was also a large outbreak on the Diamond Princess cruise ship, located off the coast of Japan, with a breakout within that country as well. Singapore and South Korea also appeared set for a large growth in coronavirus case numbers as well.

One thing to note is that all of these countries are located in Asia. Yet all of them have largely managed to get the situation under some sort of control. 

The first chart below shows the reported coronavirus case numbers for each of those countries, while the second chart shows the active coronavirus cases (that is, reported coronavirus cases minus fatalities and recoveries). 

As it stands, China now has 1.45% of the world's active coronavirus cases (down from 99%, as mentioned earlier), South Korea has 1.79%, Singapore has 0.14%, and Japan has just 0.29% of active coronavirus cases (0.33% if we include the Diamond Princess cruise ship cases as well). In fact, as of yesterday Asia had just 12.7% of the world's active coronavirus cases, compared to 64.2% in Europe and 19.6% in North America.

One big reason why Asia appears to have handled the situation better than other continents thus far is that that continent has experience dealing with similar outbreaks. SARS in 2003, for instance, forced those countries to learn from their experiences and understand how to get the situation under control. While countries like Italy and Australia were lucky to not have to endure the extremes of the SARS outbreak, we also didn't gain those valuable lessons.

As for why Italy has become the epicenter of the coronavirus crisis, I believe it could have been any other country just as easily. Many countries were slow to close their borders, including to passengers from affected cruise ships, and to understand the extreme implications they were facing. 

Perhaps the openness of the Eurozone also contributed to the rapid spread of the coronavirus.

Why Is Italy's Fatality Rate So High?

Again, this is a question that many professions are desperately seeking an answer to. Based on the reported coronavirus cases, Italy's fatality rate is tragically 10.7%. By comparison, outside of Italy the fatality rate is sitting at around 3.4%.

It does not appear that Italy has a more severe strain of the coronavirus. According to The Washington Post, the coronavirus pathogen is considered to be fairly stable, meaning that it does not appear to have mutated significantly. 

In fact, famed epidemiologist Larry Brilliant, who spoke to Wired, said "there's nothing in the virology that makes me frightened that we won't get a vaccine in 12 to 18 months." 

It's also not due to a poor healthcare system — Lombardy (the worst affected region) has one of the best healthcare systems in the world (much better than the country's south). 

Hence, it appears that there are other reasons why Italy has been struck so much worse than other locations around the world.

There are a few reasons I can think of why Italy's fatality rate might be so much higher.

First is Italy's median age. Here's some data I pulled from Worldometers:

The median age represents the age at which half of all people are younger than that age, and half of all people are above that age. Hence, 50% of Italy's population is older than 47 (compared to 50% being older than 38 in Australia). Meanwhile, Wired reports that 23% of Italy's population is over the age of 65; 15.9% of Australia's population was aged over 65 as at 30 June 2019. 

In other words, Italy has quite an old population. As the data shows, older individuals, and those who are immunocompromised, are typically the most vulnerable to severe cases of Covid-19 (although that is by no means to suggest that younger individuals are not at risk).

It should also be noted that, although Australia's fatality rate remains low, it will likely rise towards the global average, over time. Hence, individuals should not read this as a suggestion that the severity of the disease is not as bad in Australia as overseas.

The second reason relates to how overwhelmed Italy's hospitals have become. Without getting into detail, there are a number of horror stories relating to the choices doctors and nurses are having to make in Italy regarding which patient should be given priority treatment. 

According to the CIA, Italy has 3.4 beds per 1,000 people (data as of 2012), compared to 3.8 per 1,000 people in Australia (as of 2014). Both countries compare favourably to the United States with 2.9 beds per 1,000 people (as of 2013).

In a perfect world, every infected person would be given access to the necessary resources to give them a good chance at survival. But that is simply not possible when there is a severe shortage of ICU beds and hospital staff. 

This highlights the importance of social distancing and flattening the curve — by flattening the curve, we can ease the burden on the health system and give more patients priority care.

And third, it may have something to do with Italy's culture. In a nation where young people mingle more with their grandparents, it's entirely possible that that has contributed to the rapid spread, and the higher load of severe coronavirus cases. This is why young people in Australia are being told to avoid seeing grandparents for the foreseeable future.

An Improvement…

Italy is the country with the second-most coronavirus cases in the world. It has 74,386 reported coronavirus cases, 7,503 fatalities and 9,362 recoveries. Meanwhile, 3,489 individuals are considered to be in a serious or critical condition.

The spread has at very least slowed in recent days. In the past six days, the number of cases has grown 81.3%, compared to 93.7% in the six days to 25 March, and 102.9% in the six days to 24 March, as can be seen in the chart below. Hence, it does appear that Italy's lockdown laws are having a positive effect, although it still has a very long way to go.

What This Means For Australia

Unfortunately, there have been reports of a number of Italian citizens breaching lockdown laws, including this from The Sydney Morning Herald. In fact, there was even reported to have been a graduation party being illegally held in that country.

Lockdown rules as tough as those currently imposed in Italy have not been announced in Australia as yet, although we are being strongly encouraged to stay home wherever possible (here are a few reasons why that is so important).

One thing to note is that Australia appears to be moving on these restrictions sooner than Italy did, which is a positive, although we are still growing at a far more significant rate. In the past six days our number of coronavirus cases has increased 254%; if that rate is maintained we will have almost 9,500 coronavirus cases by Wednesday next week (compared to 2,676 today). Hence why the restrictions being set by the federal and state governments are so important, and why it is so important that individuals adhere to them.

And again, although Australia has a younger population than that of Italy, this does not mean that an Italy-like situation is not possible, nor does it mean young people won't experience severe cases. 

Although I do not enjoy writing about things such as this, I find that it is necessary to get as much information out there about coronavirus as possible, and hope that this information will help in your understanding of what is happening, and why it is happening.

What's Happening On The Share Market?

The S&P/ASX 200 Index is sitting in the black for the third consecutive day today. The Afterpay Ltd (ASX:APT) share price is up another 27% at the time of writing to $19.07, the  Bapcor Ltd (ASX:BAP) share price is up 17%, and the REA Group Limited (ASX:REA) share price has risen 9%.

Although it is impossible to know whether the market will continue to rebound, or if it has further to fall, these types of downturns do represent good opportunities for investors with a long-term focus to start nibbling at companies they like. 

Ideally, given the uncertainty of the current crisis, these businesses should have strong balance sheets to weather the storm. They should be nimble enough to continue operating in this environment (for example, while some companies will be forced to cease operations altogether, others can continue with remote operations or work-from-home policies).

Foolish Bottom Line

At this time, it's hard to know how to think or feel. Many individuals find themselves out of jobs, the share market has taken a battering, while we all find ourselves restricted from activities we have, for all our lives, taken for granted. 

Remember though, there are plenty of reasons to be hopeful, and that this, too, shall pass. Stay safe, Fools!

The post Coronavirus (Covid-19): Why Is Italy's Fatality Rate So Bad? appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• ASX 200 stuck in the red as investors wait for US lead
• Growthpoint Properties Australia matches FY26 guidance with 18.4c distribution
• Centuria Capital Group launches $300m equity raising for AI Factory and real estate expansion
• 3 ASX growth shares to buy next month

Motley Fool contributor Ryan Newman has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Bapcor. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended REA Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

I recently wrote an update on the importance of social distancing, which was well received by readers. That made me realise that what people really want is information about the coronavirus because it allows us to understand what is happening, and why it is happening. 

Having the right information can also give us a sense of hope, which certainly appears to be lacking right now (not because there is no hope — there certainly is — but because we are all so focused on the bad news).

So here's one piece of good news. As of today (25 March 2020), 109,102 people have officially recovered from Covid-19 (an abbreviation of coronavirus disease 2019). That represents 25.8% of all reported cases. 

What's more, with 281,660 of the current active coronavirus cases considered to be 'mild' — or 96% of all active cases — many, many more people will recover (along with many of those who are currently considered 'critical' condition). 

Before I continue, I want to make it clear how important it is that we do our part to stop the spread of the coronavirus, and the tragedy of the human toll this disease is having. 

Social distancing and regular handwashing are a must.

The Search For A Vaccine

I read an interesting article by The Economist that helped me to gain a better understanding of the workings of the coronavirus, and how scientists are looking to treat it. That, in turn, gave me a greater sense of hope and confidence, and I believe it will for other readers. 

Please note that I am simplifying The Economist's description of the process, so I apologise to any virologists who may be reading for any technical errors in my description.

So, at a basic level, coronavirus is a large family (more than 40) of viruses that cause respiratory infections, seven of which can be found in humans (including Covid-19). The first one was discovered in the 1960s and gained wider recognition among humans after the SARS (another coronavirus) outbreak in 2002 and the subsequent MERS outbreak. 

This family of viruses gets its name from the crown-like ('corona' is Latin for 'crown') proteins (called 'spikes') that stick out of the body of the virus particle, or virion. The virion itself is approximately 120 nanometres (billionths of a metre) in diameter, according to Encyclopedia Britannica, which itself is a tiny fraction of the size of the cells it seeks to infect in the human body. 

The spikes themselves fit comfortably inside a protein (ACE2) that is found on the surface of some human cells, particularly those in the respiratory tract.

Once attached, a stump called a 'fusion peptide' is exposed from within the spike which lets the virion into the cell. The virion is then able to open up and release its RNA (ribonucleic acid) which are important for determining how the virion expresses itself. Proteins are released and the replication process begins.

Don't stress if you didn't understand that previous paragraph. The important thing to understand here, in my mind, is that the Covid-19 virion is composed of many proteins, any one of which could potentially prove to be its weak spot. 

Indeed, given the tiny structure of the virion, it is presumed that all the proteins it creates once it enters a cell is of vital importance, so interrupting any one of those proteins or processes could be a target for drug makers. 

For instance, if scientists are able to develop a drug to mess with the replication process of the coronavirus, that could completely stop it in its tracks.

This is also why existing drugs could potentially be used in the fight against Covid-19. One that is being looked at currently, for example, is remdesivir which was used against Ebola. 

While these existing drugs mightn't be a vaccine or a cure, they might at least be able to help reduce the severity of the disease and potentially reduce the hospital stay. That, in turn, could potentially have a drastic impact on the fatality rate of coronavirus given the global shortage in ICU beds and medical professionals.

More good news: According to scientists, the current coronavirus is not mutating significantly (there are only a few minor variations among them, as per The Washington Post). 

That means that it is less likely that the coronavirus will become more dangerous as it spreads. It also means that the vaccine developed for this disease would likely be a single vaccine, rather than a new vaccine every year (like the flu vaccine). 

Hence, it seems there is an end in sight — it's just a matter of when.

Keeping Our Humanity

My colleague, Andrew Legget, recently posed the question: which seems scarier for stock market investors — the Global Financial Crisis of 2008-09 or the current Coronavirus Crisis?

While there is the caveat that things seem scarier in the moment than in hindsight, for me, the current situation feels worse. Not necessarily because of the economic situation, but because we have an economic situation combined with a health crisis. Hence, we feel out of control of two very important components in our lives.

In a way, that fear and uncertainty has stripped us of a sense of humanity. 

Not only have we been (necessarily) stripped of a number of luxuries we take for granted (e.g. going to the gym), but we have also, in many ways, turned against one another (e.g. fighting one another in supermarkets for items such as toilet paper or canned goods). 

While this is not the end of the world, the actions of some individuals have made it feel that way.

We are right to keep our distance (see the importance of social distancing, here), but that doesn't mean we should shun our neighbour. 

When you pass someone while collecting your groceries, for instance, offer them a warm smile, and reach out to friends and family on the phone to share a laugh. You could even have a virtual party on FaceTime!

We're still human, just sharing that connection from a safe distance, for now.

Regaining that human connection will help to 'normalise' things, to a degree, and may take away from that sense of anxiety and panic. That, in turn, will enhance our ability to cope. 

Just take a look at this video showing Cuban doctors and nurses arrive in Milan to help in the fight:

Source: ABC News

Where Does The Market Go From Here?

The S&P/ASX 200 is firmly in the black for the second consecutive day, with the Afterpay Ltd (ASX: APT) share price up 33%, Serko Ltd (ASX: SKO) up 30% and the Qantas Airways Limited (ASX: QAN) share price up 26%. 

The market may continue its rise tomorrow, or it could reverse course again. It's impossible to tell.

However, it is worth noting that the Volatility Index (VIX), otherwise known as the Fear Index, has retreated back to around 60. 

Given that the VIX represents the market's expectation of 30-day forward looking volatility, that's still incredibly high but it is well below 85 — the level at which it sat a week ago. Hence, the expected market volatility is trending lower. 

Perhaps that is, at least in part, due to our ability to regain some sense of normalcy.

Indeed, supermarkets have reported that the high degree of panic-buying has begun to diminish, while there is also now less uncertainty regarding restrictions (i.e. the federal and state governments have begun implementing restrictions, giving us a sense of certainty rather than simply an unknown what-if).

Foolish Bottom Line

Make no mistake, we are not out of the woods yet. Thousands of individuals have lost their incomes, many businesses — large and small — face the prospect of permanent closure, and more people will fall ill before this is over. 

But remember, there is hope — lots of it. There will be opportunities that come from this, which I plan on writing about in the coming days. And, although we are being asked to isolate, we are by no means in this alone. 

If you haven't already, I encourage you to take a look at these charts that highlight the importance of social distancing and what we are trying to achieve by doing so.

The post Coronavirus (Covid-19): The Search For A Vaccine Offers Plenty Of Hope appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• ASX 200 stuck in the red as investors wait for US lead
• Growthpoint Properties Australia matches FY26 guidance with 18.4c distribution
• Centuria Capital Group launches $300m equity raising for AI Factory and real estate expansion
• Metcash shares: FY26 profit edges lower, dividend maintained

Ryan Newman has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Serko Ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO and Serko. The Motley Fool Australia has recommended Serko Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

We're all about investing here at The Motley Fool. But, like everyone else, we're also enduring the vast effects of the Covid-19 (coronavirus) crisis.

While you can find useful investing resources related to Covid-19 (including the various effects the crisis is having on numerous businesses and sectors) here, the purpose of this article is to help you to understand the situation better, as well as how you can make a meaningful difference.

Which Way Will Australia Go?

As long-term investors, we're used to the idea of allowing compounding to work in our favour. Unfortunately, the exponential spread of Covid-19 is well and truly working against us.

The chart below shows the number of days since seven individual countries recorded their 100th case. One hundred cases mightn't sound like a big deal, but the chart makes it clear that it does not take long for that to become a full-blown problem.

Indeed, it's been 28 days since Italy reported its 100th case. As of 22 March 2020 it had more than 53,000. That's a compounded daily growth rate of >23%; at the current rate of growth you would expect the number of cases to double within the next 6 days.

It's been 14 days since Australia recorded its 100th case. As of yesterday, we had 1,286 cases, and could well have close to 4,000 cases this time next week.

This is why social distancing is key. That, along with extensive tracking of cases, has allowed other nations such as South Korea to reduce that compounding effect, thus helping to ease the caseload for its health system. That, in turn, is likely to have played a big role in reducing its fatality rate (as at yesterday, the fatality rate was 10.3% for Italy versus 1.2% in South Korea).

South Korea has so far managed to 'flatten the curve', something which Italy clearly has not managed. It is vital that Australian citizens do their part to ensure we do not follow in Italy's footsteps.

Still Don't Think Social Distancing Works?

Early on, Covid-19 was thought to have a reproduction rate — measured by "R0" (pronounced R-naught) of approximately 2.6x, meaning that the average infected person infects 2.6 others. However, that is based on China's experience, and we know that China implemented a number of draconian measures to limit the spread. Hence, a more realistic R0 could well be higher than 3. The Australian Government cites 12 studies that suggest a rate of 3.3 may be realistic. 

However, let's be conservative for a moment and assume 2.6 is accurate. Assuming that infection occurs after 5 days, that chain — if left unbroken — will lead to 501 infected people after just 30 days. If we go with the higher estimate (R0 = 3.3), we would have 1,853 infected people in 30 days — all from one single infection.

With more than 1,200 Australians already infected with the coronavirus, it's scary to imagine what that our caseload would look like 30 days from now if we did not implement measures to stop that from happening.

The visual above also demonstrates the importance of breaking that cycle through social distancing. Regardless of whether you believe you are in the high-risk category, by putting yourself in a position where you may catch the virus exacerbates the spread through our society.

There's also an article that's been doing the rounds which contains visual simulations that expertly demonstrate how distancing can help to 'flatten the curve'. Check it out here.

But I'm Not In The High Risk Category?

First of all, Covid-19 is not a disease that only impacts the elderly and the immunosuppressed. Yes, the data so far shows that if you're young you are less likely to die from Covid-19. 

But that doesn't mean young people are immune, nor does it mean that a younger individual won't need a regular or intensive-care hospital bed. And if all the beds are taken, the level of care the nurses and doctors can provide diminishes.

Secondly, it is vital that you consider the people you may pass this disease on to. The grim reality is, should you pass this disease on to your grandparents — or even your parents — they will likely be in a higher risk category than you are. You may also be passing it on to someone at a higher risk, such as someone undergoing chemotherapy for cancer or even someone who has the common cold!

Perhaps one reason why South Korea has managed to get a better handle on the situation in that country (relative to Italy) is that they tested more younger individuals, many of whom showed positive test results. That, in turn, forced those individuals into isolation, limiting their ability to infect others. On the other hand, Italy appears to have tested more older patients who were showing symptoms — it's likely there are others in the country who are spreading the virus unknowingly.

The message is clear: Stay home wherever possible. The government has this morning implemented strict measures that will hopefully drive society towards this goal.

Wash Your Hands

"At the molecular level, soap breaks things apart. At the level of society, it helps hold everything together." — The New York Times

We touch our faces all the time, without even realising it. While it's important to try to avoid this during the Covid-19 pandemic, it's also vital that we wash our hands regularly.

Why? Because when you wash your hands with soap and water, the soap molecules wedge themselves into certain microbes and virus cells. In doing so, they act as a 'crossbar', according to Prof. Pall Thordarson, acting head of chemistry at the University of New South Wales, as cited by The New York Times, literally breaking open the virus cell and deeming it useless. In other words, the virus' entire process is disrupted.

My wife initially laughed at me when I asked her if she'd like me to 'show her how to wash her hands properly', but a 'quick rinse with soap' is sure to leave plenty of microbes or virus cells on your hands If you're washing your hands regularly, you might as well make sure you're doing it properly!

Foolish Bottom Line

I'm not an epidemiologist, virologist, doctor, nor a mathematician. I by no means claim to be an expert. As a research analyst, however, I have been following the Coronavirus situation since the early days, and am taking precautions to protect myself and my family.

What's more, I am still finding that many individuals are failing to recognise the severity of this situation from a health perspective. Hopefully, these charts help readers to understand and do their part to stop the spread. As the information shows, every reader that this leaves an impression on is one less person who is likely to spread the disease.

One more thing: 2020 is shaping to be one of, if not the most difficult years of our lives. But the important thing to remember is that this too shall pass. It will take a concerted effort from each of us, but the more we adhere to the guidelines — the social distancing, the regular handwashing, and staying at home where possible — the sooner this will pass, and the sooner we can get back to our normal lives. 

Stay safe, stay home, and wash those hands!

The post Coronavirus (Covid-19): These 4 charts show how important social distancing is appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• 3 amazing tech ETFs to buy and hold forever
• ASX 200 stuck in the red as investors wait for US lead
• PLS shares drop 5%: What's driving the move?
• With the gold price up on Monday, are Northern Star shares a good buy now?

Motley Fool contributor Ryan Newman has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Reliance Worldwide Corporation Ltd (ASX: RWC) share price has shot higher today after the shares were released from a two-day trading halt this morning.

The shares reached a high of $5.99 shortly after the market opened, representing a gain of 31.4% compared to the previous closing price of $4.56. They have since retreated to $5.55 but are still trading 21.7% higher for the session.

Reliance's share price was placed in a trading halt on Thursday before the market opened after the company announced a major acquisition, supported by a $1.1 billion capital raising (including a $945 million institutional component).

This morning, Reliance confirmed that it had successfully completed the institutional raise, generating $946 million at the offer price of $4.15 per new share. Existing eligible shareholders took up over 98% of the new shares available to them, while the shortfall bookbuild was significantly oversubscribed "with strong demand from both existing and new institutional investors".

Retail investors will now have their chance to buy shares at the discounted price of $4.15, which marks a 25% discount to the current trading price of $5.55. Eligible shareholders can buy 1 new share for every 1.98 Reliance shares held on the record date.

Reliance Worldwide specialises in "behind the wall" plumbing and hot water systems, and owns the SharkBite brand. While SharkBite is a leader in brass 'push-to-connect' (PTC) fittings, Reliance acquired the UK-based John Guest brand, which is a leader in plastic PTC fittings, for $1.22 billion.

The post The Reliance Worldwide Corporation Ltd (ASX:RWC) share price just jumped 31% appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• 3 amazing tech ETFs to buy and hold forever
• ASX 200 stuck in the red as investors wait for US lead
• PLS shares drop 5%: What's driving the move?
• With the gold price up on Monday, are Northern Star shares a good buy now?

Investors have done extraordinarily well by owning JB Hi-Fi Limited (ASX: JBH) shares over the past 15 years, with shares multiplying by more than 10x during that period. Today, the shares trade at $23.64, down from the $24.94 share price they began the year at and almost 20% below the $29.47 peak they struck on 1 February.

Whether JB Hi-Fi shares can re-test those highs and continue to deliver strong returns for shareholders could well depend on the performance of The Good Guys (TGG).

In what was a major purchase for JB Hi-Fi, the company's acquisition of TGG was announced in September 2016 with the company offering total cash consideration of $870 million. It had clear rationale for acquiring the business with the tie-up strengthening the group's tight grasp over the home appliances and consumer electronics markets.

However, there are reasons to be concerned about TGG. In a trading update earlier this month, JB Hi-Fi said that total sales growth for The Good Guys was negative 1.3% during the third quarter (compared to 2.6% growth in the prior corresponding period), with comparable sales growth down 2.9%. That means that, on average, the stores that existed at the same time last year generated 2.9% less revenues. Year-to-date, comparable sales growth for the brand has been 0.3% compared to a 0.9% decline during the same period in FY2017.

Pleasingly, JB Hi-Fi confirmed it is on track to achieve its full-year sales guidance of $6.85 billion, with $2.1 billon of that from TGG. However, guidance for net profit after tax was reduced to $230 million, down from a guidance range of $235 million to $240 million.

While the potential benefits in combining the two businesses were clear, so were the risks. Investors ought to exercise some caution.

The post How the JB Hi-Fi Limited (ASX:JBH) share price is tracking in 2018 appeared first on The Motley Fool Australia.

More reading

• Buy, hold, sell: JB Hi-Fi, Westpac, Santos shares
• 1 ASX dividend stock down 35% I'd buy right now
• Experts name 3 ASX 200 shares to buy
• Why did ASX 200 retail shares outperform last week?
• Why Develop Global, IDP Education, JB Hi-Fi, and Wesfarmers shares are pushing higher today

Reliance Worldwide Corporation Ltd (ASX: RWC) has this morning announced a major $1.22 billion acquisition which it will support with a $1.1 billion capital raising.

The Acquisition

The company has entered into an unconditional agreement to acquire 100% of John Guest Holdings, a UK-based leader in plastic push-to-connect (PTC) plumbing fittings, for £687.5 million, or approximately $1.22 billion.

The purchase price represents 12.4x John Guest's 2017 Calendar Year Adjusted EBITDA (earnings before interest, tax, depreciation and amortisation), although Reliance expects to achieve synergies that will reduce that multiple.

Reliance Worldwide listed its shares on the ASX in April 2016 and has enjoyed a strong run-up in price in the time since. Today, it boasts a market capitalisation of almost $2.4 billion.

The company, which specialises in "behind the wall" plumbing and hot water systems, owns the SharkBite brand which offers brass PTC fittings and various other plumbing solutions designed to disrupt and transform traditional plumbing methods. Essentially, PTC fittings are designed to make the end user's job quicker and easier and, in some cases, remove the need for the plumber altogether (although notably, in some markets a certified plumber is required to complete certain jobs).

Reliance believes that John Guest is highly complementary to its existing business. John Guest is a leader in plastic PTC fittings, having sold approximately 145 million fittings in 2017, while it also boasts strong research and development capability, high-quality automated manufacturing facilities and strong customer relationships, according to Reliance.

The company generated revenue of £168.6 million and adjusted EBITDA of £55.4 million in the 2017 calendar year, with an EBITDA margin of 32.9%. Its margins have grown in the past two years and compare to the 20.1% EBITDA margin reported by Reliance Worldwide in the 2017 financial year.

Reliance currently expects to generate total synergies in excess of $20 million EBITDA per annum and expects to largely achieve those synergies within the first year of ownership. Most of the synergistic benefits that are expected relate to cost reductions from business integration and improved operating efficiency. It also hopes to expand its new John Guest products into its North American and Asia Pacific channel networks, and expand the presence of SharkBite in Europe as a result of the tie-up.

The acquisition should also diversify Reliance's revenue by channel, product category and geography, as demonstrated in the following chart:

Capital Raising

Reliance will undertake a pro rata accelerated non-renounceable entitlement offer to raise up to $1.1 billion in new equity. An institutional component will account for $945 million of the raising with the remainder to be raised from existing shareholders. Eligible shareholders can subscribe for 1 new share for every 1.98 shares they hold, at an offer price of $4.15 (representing a 9% discount to yesterday's closing price).

Notably, all of Reliance's directors, including Chairman Jonathan Munz, have indicated they will take up their full entitlements under the offer.

Meanwhile, the group has also established a new $750 million syndicated debt facility which increases its available facility limits by $400 million.

Risks

This is a very large acquisition for Reliance. Although the company plans to utilise the same integration principles applied to the Holdrite business, which was successful, there is no guarantee they will realise the same success when integrating this business.

There's also the risk of potential quality issues with John Guest's products or the inability to generate as strong synergies as forecast, while adverse economic or regulatory conditions could also derail the success of the acquisition. And, there's no guarantee Reliance's or John Guest's existing customers will continue to purchase the same number of products as they have done historically.

There are plenty more ways for this acquisition to go wrong. And, when the acquisition is worth $1.22 billion, there isn't much room for error.

Trading Update

Investors will be pleased to see Reliance reaffirm its full-year earnings guidance, particularly with the increased input costs experienced by the business during the second half. The company expects to achieve EBITDA of between $150 million and $155 million for the year, excluding the impact of any transaction costs associated with John Guest and any earnings contribution from that business.

Foolish Takeaway

Reliance Worldwide looks to be a reasonable company to date, but it's wise to be cautious regarding an acquisition of this size.

The post Reliance Worldwide Corporation Ltd (ASX:RWC) announces huge acquisition, capital raising appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• 3 amazing tech ETFs to buy and hold forever
• ASX 200 stuck in the red as investors wait for US lead
• PLS shares drop 5%: What's driving the move?
• With the gold price up on Monday, are Northern Star shares a good buy now?

The Super Retail Group Ltd (ASX: SUL) share price has charged higher over the past 30 days, making it one of the top-performing shares on the ASX 200 during that time. The shares have gained 16% and trade at $8.34 today.

Super Retail Group is a specialty retail group that operates in three broad retail divisions. The Auto Segment, which includes the Super Cheap Auto business, is the largest of these, contributing 39% of revenue and just under half of group operating earnings (EBIT) in the six months ended 31 December 2017. The Sports segment, which includes Rebel, generated $503.8 million of sales during the half while the Leisure segment generated sales just shy of $300 million.

All up, the company reported revenue of $1.32 billion and EBIT of $113.6 million. Revenue was slightly above the same period from last year, while earnings were slightly lower. Indeed, the Leisure segment was the culprit for the lower earnings, with that business' EBIT falling $4.2 million compared to the prior corresponding period.

The chart below summarises the results:

Notably, Super Retail Group is also looking to revamp its presence in the Leisure segment and announced the major acquisition of the New Zealand-based Macpac in February. Macpac is expected to contribute circa $5 million to group earnings at the EBIT level in the year ending 30 June, with a greater contribution likely in the years beyond (the company was only consolidated into Super Retail Group's accounts on 5 April, so its contribution this year is limited).

However, the most recent run-up in the SUL share price appears to have been caused by a trading update provided by the group earlier this month. Like-for-like sales growth accelerated in its Supercheap Auto and Rebel businesses in the 17 weeks to 28 April with the company saying its profit performance had been in line with expectations.

Super Retail's shares currently trade for $8.34, compared to a 52-week low of $6.42 and 52-week high of $9.12. Its share price performance over the past 30-days compares to Bapcor Ltd (ASX: BAP) which has gained 13.6%, as well as JB Hi-Fi Limited (ASX: JBH) and Harvey Norman Holdings Limited (ASX: HVN) which have recorded a fall of 7% and gain of 2.3% respectively over the same period.

The post Why the Super Retail Group Ltd (ASX:SUL) share price is flying appeared first on The Motley Fool Australia.

More reading

• Buy, hold, sell: JB Hi-Fi, Westpac, Santos shares
• 1 ASX dividend stock down 35% I'd buy right now
• Experts name 3 ASX 200 shares to buy
• 3 ASX dividend shares with bigger yields than CBA
• Where to invest $10,000 in ASX dividend shares

The WiseTech Global Ltd (ASX: WTC) share price has been the top-performing share from the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) over the past month, according to data from S&P Global Market Intelligence.

That will come as great news for long-term shareholders who remained faiuthful to the business following WiseTech's interim results announcement in February.

From a high of $16.27, the shares dipped as low as $9.22 in April. Since then they have rebounded more than 53%, with a 41% gain in the past 30 days alone.

WiseTech, which has a market capitalisation of $4.3 billion, is a software-as-a-service (SaaS) business that provides mission-critical software to the logistics services industry. Its core product, CargoWise One, is designed to drastically increase a logistic service provider's productivity and improve their document management, whilst also helping to ensure they remain compliant with global customs regulations.

The company has recorded impressive growth since its initial public offering (IPO) in April 2016 and made a number of recent acquisitions. While it's possible that many of these acquisitions won't add a meaningful amount to WiseTech's top or bottom lines in the near future, they are designed to enhance the value of the product in the long run.

However, the catalyst behind WiseTech's stunning run-up in share price of recent was likely its revenue guidance update on 1 May 2018. The company made a slight upgrade to its previous revenue guidance and now expects its top-line to grow somewhere between 37% and 43%, within a range of $210 million and $220 million. Earnings before interest, taxes, depreciation and amortisation (EBITDA) is also expected to be between $71 million and $75 million, up from $53.9 million in FY2017.

WiseTech is an attractive founder-led business with lots of opportunity for growth. If you haven't already, it may be worth adding this one to your watchlist.

The post Why the WiseTech Global Ltd (ASX:WTC) share price has soared 41% appeared first on The Motley Fool Australia.

More reading

• Why Humm, Metcash, PLS, and WiseTech shares are sinking today
• WiseTech shares crash 12% as founder scandal deepens
• Down but not out: 3 ASX tech shares ripe for a rebound
• Is the only way up for WiseTech shares after a 65% fall?
• How to know when a beaten-down ASX share is worth buying

We can occasionally stumble on opportunities that yield high returns in a short space of time. Unfortunately, the opposite can also happen where we are forced to watch as one of our investments seemingly falls off a cliff.

This has been the case for shareholders of the embattled AMP Limited (ASX: AMP), whose shares have shed almost a quarter of their value so far in 2018. The shares have fallen 24.3%, according to data from S&P Global Market Intelligence, with more than half of the damage being inflicted during the past 30 days.

Syrah Resources Ltd (ASX: SYR) and Sigma Healthcare Ltd (ASX: SIG) have taken a bath as well, shedding 24.6% and 24.8% respectively, making them the fifth and fourth worst-performing shares from the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) cohort in 2018 respectively. Meanwhile, Blackmores Limited (ASX: BKL) shares have declined 24.9% and were trading at $126.99 at market's close.

The declines get larger for the second-worst performing share of 2018, Greencross Limited (ASX: GXL), which has fallen 32.4%. Greencross recently released a trading update saying it now expects to deliver underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of between $97 million and $100 million, compared to underlying EBITDA of $104 million in FY2017.

However, the worst-performing share to-date so far in 2018 is Retail Food Group Limited (ASX: RFG). Retail Food Group is the master franchisor behind brands such as Gloria Jean's and Donut King. The company came under immense pressure following a series of expose-style articles from Fairfax Media which began in December 2017. The shares have fallen approximately 81.4% since then, and are down 66.8% so far in 2018.

The post These 6 ASX shares have fallen sharply in 2018 appeared first on The Motley Fool Australia.

More reading

• 3 reasons to buy AMP shares today
• 7 ASX 200 shares with strengthened buy ratings this week

The S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) is roughly on par with where it was at the beginning of the year. But as is typically the case there have been some stand out performers that have simply blown the benchmark index's returns away.

Going by data from S&P Global Market Intelligence (as at 18 May), Flight Centre Travel Group Ltd (ASX: FLT) has been the market's sixth-best performer to date, climbing 39.7% since the beginning of January. The past month has been favourable for investors as well, with shares up a little over 11% in that time.

A2 Milk Company Ltd (ASX: A2M) is having another standout year, as well. Although they have shed 9.9% in the past 30 days, the shares are still the fifth top performer from the ASX 200 cohort year-to-date, up 43%.

It's fellow infant formula producer Bellamy's Australia Ltd (ASX: BAL) has also had a rough 30 days, down 13.3%. But the shares have still managed to rise more than 65% in 2018, making it the third-best performer so far. Altium Limited (ASX: ALU), up 71.5%, and Nine Entertainment Co Holdings Ltd (ASX: NEC), up 51.1%, come in at number 2 and 4 for the year, respectively.

The top-performing share so far in 2018 is Sirtex Medical Limited (ASX: SRX). The shares have gained more than 80% year-to-date, rewarding those who remained patient though what was a rough 2016 and 2017.

The majority of Sirtex's gains came during January. At the time, the company received a takeover offer from Varian Medical Systems Inc at an offer price of $28.00 per share in cash. It marked a 49% premium to Sirtex's previous closing price of $18.83.

The company has since received a subsequent offer from CDH Investments at a price of $33.60 per share. Notably, the shares are trading at a discount to that price although there is no guarantee the proposal will result in a binding offer.

The post These 6 ASX shares are soaring in 2018 appeared first on The Motley Fool Australia.

More reading

• Why A2 Milk, Lindian Resources, Perenti, and SGH shares are pushing higher today
• A2 Milk shares jump 7% on big China and special dividend news
• a2 Milk Company gets China approval and plans $300m dividend
• Here are the 10 most shorted ASX shares
• 8 ASX shares with 30% to 220% upside ahead: Experts

The futures market is pointing to another 20-point gain at the opening bell this morning, boding well for the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) after yesterday's 67-point climb.

Here's a quick recap:

• FTSE 100 (UK): up 0.29%
• DAX (Germany): up 0.06%
• CAC 40 (France): up 1.11%
• Dow Jones (USA): up 1.23%
• NASDAQ (USA): up 1.58%

Companies reporting their earnings results will continue to command the market's attention today.

Medibank Private Ltd (ASX: MPL), whose share price rose 1% to $3.04 on Thursday, reported its interim results. The insurer's premium revenue rose 1.8% to $3.18 billion while its net profit rose 5.9% to $245.6 million.

Baby Bunting Group Ltd (ASX: BBN) reported a 9.8% increase in sales although comparable store sales declined 1.7%, with price deflation of 4.3%. It did, however, say that momentum has been building with comparable store sales growth of 4.5% during the first six weeks of the second half.

Auckland International Airport Ltd (ASX: AIA) issued its interim results, too, reporting revenue growth of 6.9% and underlying earnings growth of 7.8%. That was on the back of a 6.4% increase in passenger movements. The interim dividend also rose by 7.5% to 10.75 cents per share.

Primary Health Care Limited (ASX: PRY) reported revenue of $856.5 million, up 5.9% on the prior corresponding period, while its profit rose 5% to $44 million. The company did increase its interim dividend to 5.1 cents, up from 4.8 cents previously.

And iSelect Ltd (ASX: ISU) reported its results, with revenue climbing 7% and underlying operating earnings (EBITDA) up 20%.

Other companies that could also receive some attention include Domino's Pizza Enterprises Ltd. (ASX: DMP), whose shares have now fallen 12% in the past three sessions, and Healthscope Ltd (ASX: HSO), which declined 4.8% on Thursday.

The post 7 shares you need to watch on Friday appeared first on The Motley Fool Australia.

More reading

• Here are the 10 most shorted ASX shares
• 4 ASX 200 shares downgraded by brokers this week
• Buy, hold, sell: PEXA Group, Domino's Pizza, GQG Partners shares
• Buy, hold, sell: Domino's, Super Retail, and Symal shares
• Here are the 10 most shorted ASX shares

The S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) appears set to rally this morning with the futures market pointing to a 55-point gain at the opening bell, following a positive session for international markets overnight.

Here's a quick recap:

• FTSE 100 (UK): up 0.64%
• DAX (Germany): up 1.17%
• CAC 40 (France): up 1.1%
• Dow Jones (USA): up 1.03%
• NASDAQ (USA): up 1.86%

Corporate earnings season is well underway now and a number of big-name companies are due to take centre stage today.

Among them are Telstra Corporation Ltd (ASX: TLS) and the market regulator itself, ASX Limited (ASX: ASX).

Telstra reported its half-year earnings results this morning, reporting revenue growth of 0.8% on the prior corresponding period although the group's profit declined 4.9%. It also resolved to pay a fully franked interim dividend of 11 cents per share, comprising an ordinary dividend of 7.5 cents and a special dividend of 3.5 cents per share. This was consistent with the group's revised dividend policy.

Meanwhile, the ASX reported revenue growth of 5.8% to $409 million and operating earnings (EBITDA) of $312.8 million, up 5.5%.

Suncorp Group Ltd (ASX: SUN) reported its half-year results today, as well, reporting top line growth of 2.5% but a 15.8% decline in its net profit after tax to $452 million.

Origin Energy Ltd (ASX: ORG) and Evolution Mining Ltd (ASX: EVN) reported their results too, and could thus receive some attention from investors today.

Elsewhere, it could be worth watching shares of companies such as CSL Limited (ASX: CSL) and Domino's Pizza Enterprises Ltd. (ASX: DMP). The CSL share price rallied 5.1% on Wednesday while Domino's dropped 6.1% off the back of their own earnings results.

The post 7 shares you need to watch on Thursday appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• 3 ASX healthcare shares to sell despite signs of sector rebound
• Buy, hold, sell: Life360, Woodside, CSL shares
• Why CSL, Westpac, and this big-name ASX 200 share could be sells
• 2 ASX blue-chip shares offering big dividend yields

It was another turbulent night on Wall Street with the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) set to follow its international counterparts down further today.

Here's a quick recap:

• FTSE 100 (UK): down 1.46%
• DAX (Germany): down 0.76%
• CAC 40 (France): down 1.48%
• Dow Jones (USA): down 4.6%
• NASDAQ (USA): down 3.78%

Local shares were hit hard on Monday. With the futures market pointing to another 139-point decline at the opening bell today, it's likely to be another ugly day.

Among the companies in focus will be Resolute Mining Limited (ASX: RSG) and Orocobre Limited (ASX: ORE), which were among the market's hardest-hit companies on Monday. The pair fell 9.5% and 7.3%, respectively.

The major banks will also be in focus; given their heavy weighting on the Australian market, how much they fall will play a key role in determining how far the indices themselves fall. Australia and New Zealand Banking Group (ASX: ANZ) was the worst-performer of the cohort on Monday, sliding 1.6%, with the four major banks all closing between 1.2% and 1.6% lower.

On the other hand, companies such as ARB Corporation Limited (ASX: ARB) and Brickworks Limited (ASX: BKW) managed to escape the market's rout, actually finishing the session in positive territory.

The CBL CORP FPO NZX (ASX: CBL) share price will not move today after they were suspended from official quotation at the request of the company. The suspension is pending the release of announcement regarding a proposed capital raising.

The post 6 shares you need to watch on Tuesday appeared first on The Motley Fool Australia.

More reading

• Leading brokers name 3 ASX shares to buy today
• How many ANZ shares do I need to buy for $10,000 of passive income?
• Invested in ASX 200 bank shares for dividends? This fundie prefers other stocks
• Why has the ASX 200 given up its early rebound today?
• Here are the top 10 ASX 200 shares today