Three things I’m thinking about today…

1) Well, would you look at this.

Yesterday you and I eyeballed the non bank sector.

What did we see?

One of the companies in the sector, Resimac ($RMC), is splashing cash…via a special dividend.

I take this as a nice little positive few will notice.

You see…

Lenders have their finger right on the pulse of the country. They can see if people are repaying their debts, or falling behind.

They also see if the demand for credit is rising or falling.

As they say…

“Money talks, bullshit walks.”

Damn straight!

Now, what do we see this merry morning?

Another non bank, Pepper Money ($PPM), says this morning that it’s going to pay out a special dividend too.

It’s raining money suddenly!

Again, I find this notable, and bullish.

I’ve followed Pepper for a long time.

I know they have a rock solid cash position. That cash figure was $124 million at last accounts (Dec 24).

That’s a big chunk of change for a company with a $750 million market cap.

In fact, I was a bit miffed they didn’t do something like this in 2024.

They did start a share buyback last year. But they seemed a bit stingy with it, at least to my mind, considering how cheap the share price was.

Someone’s got a bit more confident.

Now they’re going to pay out $55 million of that cash to shareholders.

Why now?

I can’t read minds. I can only guess they see what I see – a domestic economy going into an upswing.

Pepper’s management are loosening the shackles in response.

We can see this another way…

2) Judo ($JDO) is another, bigger, lender.

It’s different to Pepper and Resimac in that it has a banking license and uses deposits for funding.

But it has a finger on the economic pulse in the same way, with a slight twist.

Resimac and Pepper have substantial mortgage books. Judo is different. It’s primarily a business bank.

The team at Judo saw a neglected niche they could exploit: relationship banking for small and medium sized businesses.

It’s working so far. Judo had $11.6 billion in loans at the end of 2024. Demand for business credit is also strong in Australia.

Judo put their market share at 1.5%.

There’s plenty of room for expansion. Today their guiding for a solid lift in profit for the next financial year.

I take that as bullish, generally speaking, too.

Judo’s share price is in a bit of a flat patch. I can see a good case for it to begin rumbling again soon.

One to keep an eye on from here.

3) None of the above will be that surprising if you’ve read Fat Tail Daily for a bit.

I keep making the case to take the optimistic approach when it comes to the share market.

In fact, back in 2023 one wag dubbed me “the most positive man in finance”.

It sure feels better that way when you get up in the morning.

But it’s also the logical thing to do.

Back in April S&P Global released this small report on the history of the ASX/200 from 2000 to 2025.

You can see it yourself here.

They also included this handy chart…

The bars show the calendar year return for the ASX/200 going back to 2000.

You can see from this that the market is positive far more than it is negative.

Of course, 2008 – the GFC – stands out as the humdinger on the downside…and still lurks in the minds of many.

History is clear on this point: fortune favours the optimists.

In fact, I wouldn’t be surprised if we had a solid run of years from 2023 to 2027 like we did from 2003-2007. I’m not saying it’s without risk, or won’t be volatile.

But that’s my thinking currently until I see something to get mega bearish on.

That’s the base of my gameplan. I’m hunting for opportunities with this in mind.

Best wishes,

Callum Newman,
Editor, Small-Cap Systems and Australian Small-Cap Investigator

Murray’s Chart of the Day –
Silver Monthly Chart

By Murray Dawes, Tuesday, 3 June 2025

Silver went ballistic overnight jumping 5.4% to US$34.79.

That is worth noting because it takes silver up to the edge of major resistance at US$35.00.

Silver has been severely lagging the gold price over the past six months. Despite gold’s 25% surge since late 2024, silver has gone sideways.

My theory is that large investors are buying gold and selling silver short as a hedge.

The technical situation in silver remains explosive. That’s because a rise above resistance at US$35.00 gives targets to the major sell zone between US$40.00-$45.00 (see chart above).

Silver is down 2% during our day session to US$34.00, so resistance is still quite stiff around $US35.00.

But it looks like we aren’t far away from seeing what happens when silver punches through that resistance level.

Regards,

Murray Dawes,
Editor, Retirement Trader and Fat Tail Microcaps