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ASX erodes losses; Afterpay record high, Zip rallies 9pc – The Australian Financial Review

Mid cap Chorus is down 9pc as NZ lockdown bites installations. The buy now pay later train has carried Zip shares 7pc higher on no news, and Sezzle inches closer to completing its raising.

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UniSuper’s balanced fund returned almost 1 per cent over 2019-20, storming back from a 14 per cent loss at the end of the March quarter. Chief investment officer John Pearce was interviewed for a members’ bulletin, revealing that Tesla is the biggest contributor to the stronger performing global environmental opportunities option (up 14 per cent).
“The pin-up child for this option is Tesla,” he says.
Unisuper’s John Pearce recovered from earlier losses linked to big bets on real assets such as Sydney Airport. Supplied
“On some metrics, we are seeing evidence of overvaluation here, but Tesla is also a classic case where I’ve got it wrong, I’m going to stop calling the top in Tesla. Growth prospects are fantastic, as they are with many of these companies, but you are paying a high price for the high growth prospects.”
And while his is “pretty comfortable” with tech sector valuations on Wall Street, because they are backed by fundamentals, he’s not alone in being uneasy about tech valuations at home.
“There are some bubble elements forming in the sector, and I’m actually going to refer you this time to the Australian example.”
Hello, Afterpay.
“Let’s have a look at Afterpay’s valuation. It’s got a market value of about $18 billion. It has about 8 million customers, and that’s pretty impressive, because its really only been the last few years that it’s taken off. But Afterpay loses about $50 million a year at the moment. So, $18 billion for a company that loses money.”
For $18 billion in market cap, you can own Bendigo, Bank of Queensland and Suncorp which produced collectively $1.1 billion in profit.
“Of course, Afterpay’s growth prospects are far greater than those banks. But once again, you’re paying a very high price for that growth.”

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