Here’s what you need to know today

• Australia’s proposed cap on international students is expected to be voted down after the Coalition and Greens joined forces against it, albeit for very different reasons. The Coalition have been arguing the cap doesn’t go far enough while the Greens are against any cap because of the economic harm it would do to the education sector. The proposed ban would have capped student places at 270,000, down about 30% from their current numbers. (ABC)
  
  

• Australian Prime Minister Anthony Albanese will meet with Chinese President Xi Jinping on the sidelines of the G20 Summit in Brazil, as he pushes for more coordinated global action on the Middle East and Ukraine arguing that they are key drivers of hunger, poverty, high inflation and high energy prices. (SMH)
  
  

• Executives of ASX-listed gold miner Resolute Mining will go free after the company agreed to pay the Malian government US$160 million. Three executives have been held by Mali for more than a week as the government seeks to extract more money from foreign mining companies. (AFR)
  
  

• ASIC has sued National Australia Bank, claiming it failed to respond to 345 hardship applications within the three-week timeframe required by law. This follows a similar action brought against Westpac last year. (AFR)
  
  

• The winners and losers continue to emerge from Trump’s election win. The CEO of JPMorgan Case, Jamie Dimon, said his peers are “dancing in the street”. Meanwhile pharmaceutical stocks fell with the news that Robert F. Kennedy jr. will be America’s top public health official. (Business Insider | Quartz)
  
  

• It’s not just American pharmaceutical companies falling. Australia’s CSL fell to a six-month low as investors worried about Kennedy’s impact on CSL’s flu vaccine business. (AFR)

What the…?

In almost all professional sports there is tension between the players who want to be themselves and the leagues that want to police their behaviour. However, the Formula 1’s latest rules may be taking that to an extreme. The F1 are starting to fine drivers for swearing, including on the radio with their team. That feels extreme. (Racer)

Investing is a lifelong journey

Here’s what you can learn today.

This is an excerpt from our book Get Started Investing. Pick up a copy wherever you buy books.

Doesn’t the stock market crash? 

We’ve all heard the stories of market crashes—1929 Great Depression, 2008 Global Financial Crisis—there have been certain events when the markets have fallen and investors have lost money. Far less reported is the fact that the market has always recovered from these falls.

The reason the market recovers is that the companies that survive the downturn continue to get more productive, more innovative and more valuable over time. Individual companies will go bankrupt; technology will disrupt industries—but overall the market as a whole continues marching upwards.

Between 1900 and 2018, the Australian stock market had 23 years where it went down and 96 years where it went up: 81% of the years were good years.

It’s not just that the stock market recovers from these crashes. Throughout history, time and time again, the stock market recovers from its fall and then keeps growing.

One of our favourite examples of this is the US stock market during the 2008 Global Financial Crisis. If you had invested in 2007, right before the market started falling:

• by February 2009 you would have lost half of your money and be feeling pretty ready to give up on investing

• by 2013, you would have been back to even (that would have been a long six years!)

• by 2019, you would have doubled your money.

Today’s sponsor is First Sentier Investors

The pursuit of quality from the Australian share market

Some Aussie companies are leaders in efficiency. Others innovation. Some have mastered both and risen to global market leadership positions.

First Sentier Investors believe quality companies across the ASX 100 have what it takes to grow through market cycles. 

In pursuit of quality from the Australian share market, First Sentier Investors has geared quality ASX 100 companies since 1997.

Given the elevated risks of gearing, the team puts ‘quality first’ by pursuing liquid stocks with strong balance sheets.

Discover our best ASX candidates for gearing 

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