ASX 200 Shiller CAPE 19.6Long-run median ~16Valuation indicator NeutralHousing credit growth RisingRare earths A five-year themeThis week A Bubble on a BubbleASX 200 Shiller CAPE 19.6Long-run median ~16Valuation indicator NeutralHousing credit growth RisingRare earths A five-year themeThis week A Bubble on a Bubble
Total Money ManagementPremium • Week Ending July 10, 2026
Signals & Noise • The Members Issue
The Biases That Cost You Money
We all carry them without noticing. This issue: the six biases that quietly drive bad decisions, the credit line that leads house prices, an ASX sitting on the fence, and why the race for rare earths has years left to run.
I
Chapter One • The Members Message
Know Your Own Biases
"We all hold biases unconsciously."
The whole message this week is simple: we all carry biases without noticing, and the job of the investor is to recognise them and adjust for them. You cannot switch a bias off, but you can build a process that accounts for it. Here are the six worth watching every time you make a decision.
Recency Bias
You take recent events and assume they will continue. It shows up as momentum, the market carrying on in the same direction simply because it has been.
Availability Bias
You judge how likely something is by how easily you can recall it. When markets turn against you, older losses surface and start driving the decision.
Priming
The media prime you with negative headlines that claim to explain what is happening. The framing arrives before your own judgement does.
Anchoring Bias
You fix on the price of a stock instead of its value, or on what you have won or lost rather than the odds of a reversal from here.
Frequency & Sample Size
Unusual events grab attention and start to feel more common than they are. If something were truly usual, it would not stir emotion at all.
Media Bias
The media do not just shape what investors do, they follow what investors are already interested in. Emotional headlines crowd out the statistics.
None of these makes you a poor investor. Ignoring them does. The reason we lean on frameworks rather than instinct is that a process does not get spooked by a headline, and it does not forget the base rate.
Three threads run through the week. None resolves cleanly, and together they keep the risk backdrop unsettled heading into the second half of 2026.
01
The On-Again, Off-Again War
Every few days the conflict flares and then cools. Uncertainty feeds more uncertainty, and markets dislike nothing more. Prepare accordingly rather than react to each headline.
02
NATO Spending Climbs
Military budgets across the alliance are rising quickly, and Australia is lifting alongside them. That flow of money has to land somewhere, and defence supply chains are the obvious home.
03
AI Problems Continue
The cracks in the AI story keep widening: cost, reliability and expectation all running ahead of delivery. A theme priced for perfection rarely gets to keep it.
The Read
A stop-start war, rising defence budgets and a wobbling AI narrative. None demands panic. All of it argues for positioning over prediction.
III
Chapter Three • The Oz Economy
Lending, Prices and Patience
Our position on Australian housing rests on one relationship: the flow of credit leads the direction of prices. When lending grows, prices follow it up. When lending rolls over, prices roll over behind it. The chart below sets the two side by side across thirty-five years.
Housing Credit Flow vs House Price Growth • Australia • 1990-2026
The two lines rise and fall together. Where the gold credit line turns down, the sage price line follows it within a year, every cycle since 1990.
The point is not a forecast of collapse. It is that anyone promoting a way to build wealth off ever-rising prices should be asked one question: what happens to their strategy when the credit stops flowing? Be wary of the promoters who quietly pivot the moment the environment turns, without ever admitting it changed.
Away from housing, the ASX is going nowhere in particular, trading in a sideways range. At a CAPE of 19.6 it is not expensive, but it is not cheap either, so this is a patience game: rebalance, stay disciplined, and wait for better entry points. Our own valuation indicator tells the same story.
ASX 200 price10-month moving average (trend)TMM valuation indicator
The indicator screamed in 2007 and again ahead of trouble. Today it sits close to the midline: neither expensive nor cheap. Recreated from Topdown Charts and LSEG data.
19.6
ASX Shiller CAPE
Neutral
Valuation Indicator Reading
Sideways
Price Trend Right Now
The Read
A fairly valued market going sideways rewards patience, not force. For now energy and emerging markets remain the more attractive ground. The opportunities from here are likely to be idiosyncratic rather than market-wide, until the whole market gets cheaper. General information only, not a recommendation to buy or sell anything.
IV
Chapter Four • Special Study
The Race for Rare Earths
A run of recent events makes one thing clear: the contest over rare earths and critical metals is nowhere near settled. We expect this to play out across the next five years, and the moves this fortnight show why it is a structural theme rather than a headline.
Japan launches rare earth recovery from waste appliances. Recycling from old electronics was always going to be a route for Western economies to chip away at China's dominance of supply.
China restricts exports to Japan. Beijing has blacklisted some Japanese companies, a reminder that supply can be turned into leverage at any time.
NATO opens a critical raw materials project. The alliance is deepening cooperation to secure the metals its defence industry depends on.
A US processing hub takes shape. Flash Metals USA has joined a White House backed critical minerals processing hub in West Virginia worth around US$150 million.
China keeps stockpiling. Trade data shows Beijing lifting imports of critical metals while holding its own exports back, quietly building a buffer.
Deals with strings attached. Reporting suggests US critical minerals arrangements span fourteen companies with ties to prominent political families, worth roughly US$9 billion in total.
The Read
Recycling, blacklists, defence pacts and new processing hubs are all pieces of the same five-year story: the West trying to build supply chains that do not run through Beijing. This is a theme to understand, not a tip to trade. Education only.
V
Chapter Five • The Podcast, the Call & the Journey
Go Deeper
This week's episode is titled A Bubble on a Bubble. Steve, Tom and Jacob work through where genuine value sits when the headline index looks stretched but the average stock does not, and what that means for how you position from here. The full show notes accompany this edition.
Bring your questions on positioning, the Wells framework, individual holdings or your own situation. Live each month on the third Wednesday, included with your subscription. Same standing room every time: zoom.us/j/2437942007
We will keep updating the sector scorecards, momentum indicators and macro notes as these themes unfold. If conditions shift, you will see it in the Wells calls, the Signals and Noise Premium updates and the portfolio insights.
