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- Pat Cox – 04th Feb
Are Australian stocks set to ride another bull market?
Ned S,
2-3 years out
Stillgotshoeson – 04th Feb
Where is the Australian Economy heading in 2012?
It is interesting to note that in the US some companies are re opening shut down manufactoring facilities and closing some of the offshore ones, however at these reopened facilities the wages are much, uch lower than were originally paid.
People are willing to take these jobs.
Maybe Australia will face a structural change into the future as well.
Greg Atkinson – 04th Feb
Where is the Australian Economy heading in 2012?
GoWest when I look at what Australian exports & imports I have a hard time agreeing with you that the Australian economy is strong. We simply don’t do much value adding and this means we are getting along basically thanks to high commodities prices, a lot if inward investment and government spending.
Once the mining tax revenues drop off the government isn’t going to have the money to prop up other sectors of the economy and already we are seeing job losses in manufacturing & banking. Perhaps the demand for commodities will not fall much further and prices level ou,t but even so I have difficulty is seeing how jobs are going to be created over the next few years. What sector of the economy will do this? Mining along?
Stillgotshoeson – 03rd Feb
Where is the Australian Economy heading in 2012?
Where is the Australian Economy heading in 2012?
Down the toilet, just deciding if it is going to be a half flush or a full flush…..
QE will give a boost but the end result is going to be the same.
Keynesian theory is “general” in nature and is to work along with private sector.
One could reasonably argue that Keynesian theory was not implemented in the US.
The steps that the Australian government took where more Keynesian and one could also argue that it worked far better than what has been done in the Northern Hemisphere.
Had things worked out differently in the North then we could well have got through the GFC relatively unscathed.
Property correction would still occur (much later) as a more booming economy would have meant higher mortgage rates, higher rates that would have been to big a burden for those overcommited. Housing market was struggling already with interest rates on mortgages around 9.5% just prior to the GFC.
I can see no signals in any data set for the ASX to break the 5000 level. 4500, 4750 and 5000 levels all reach strong resistance and there is just not enough fundamental reasons we can sustain breaks above these levels with the current volatility in the markets/economy. Government intervention can bolster markets for short periods but nothing sustainable. My view has not changed, ASX will test the GFC lows before this is over, may not be this year. QEIII from the USA is not far away. My cash position is still high, some skin in the game but waiting for better buy conditions into the future.
Lachlan – 03rd Feb
Where is the Australian Economy heading in 2012?
Taxing and spending on an increasing scale is a disaster even in a resource rich country. Too much government, too little private investment.
Stillgotshoeson – 03rd Feb
Australian stock market outlook
I still have my holding of RAU Lachlan. The 100k Portfolio is not a real portfolio, It is up just to see how it would do if traded in the real world. It does however contain some companies I do hold shares in.
My direct exposure is not great. I aready have significant gains to offset the loss if it goes belly up. Current position of the company is they are holding enough cash for the next 6 months. They are in mid contract for the sale of their North Queensland assets for scrip and cash in another company.
Current workings at the Bolivian mine are suspended further to discussions with the Bolivian Government. Republics Bolivian mine had received great interest from companies willing to (help) finance the mine, however all companies expressed concerns over the Bolivian Governments willingness to nationalise mines at the moment.
Suspension of the mine and a willingness to abandon the project may prompt the BG to offer some sort of deal, even if they intend to “amend” such deals in the future. Get the mine to production stage then take it over 
Even allowing for the “supposed” hit on the 100k portfolio it is still in front after the loss (capital loss carried over against future capital gain on sale)
Going over other share picks to add to the portfolio to replace RAU.
Might put a dividend play in the portfolio.. Will think about it over the weekend.
The coffee shop is still doing very well, partner wants to expand the business to another shop. Has offered to buy me out if I want at a handy profit to my initial outlay. Tempting. I don’t do any work at the place, I was just a financial partner. There is a dwelling above the shop, he wants to try and buy it and open it up as an upstairs area.
Lachlan – 03rd Feb
Australian stock market outlook
I’m not saying that Id hold the RAU’s either Shoes. I know we both use differing strategies and there are plenty that work.
Lachlan – 03rd Feb
Australian stock market outlook
I have shares like that which are highly speculative and they are also highly volatile. They go up and down by massive percentages. The reason I have a very small position on explorers is because of the oversize gains available. If I wait long enough I will pick up a 5-10X gain….granted its possible one of them may blow up. The winners should cover the losses easily. My rule is not to sell in any down draft and I can only rest easy with that because I invest small enough to not give a hoot if they hit zero. The upside on a share like RAU was obviously measured in 1000′s of % and that remains true even if they do fail for those reasons we talked about last year.
My position on shares overall is small but I love the game of course and will keep building a quality portfolio as are you. Otherwise I am mostly physical assets. Looking to buy a block this year also for my business (which is overtaking my house) but in a growth area and I expect to get a very good discount on the price.
GoWest – 03rd Feb
Where is the Australian Economy heading in 2012?
Fundamentally the Oz economy is still strong. Unfortunately Fairwork has ensured jobs growth in areas other than mining and government will be negative. The non-hiring of casuals from the retail sector over christmas was a good example of what to expect.
Seems the currency increase is now due to strong mining exports? Supply and demand is ignored? QE is ignored! What is the RBA doing – burning Oz dollars instead of printing them?
Julia’s green coalition has borrowed billions in an effort to create an Australian green economy. She would have been far better spending the money on flood mitigation and fire breaks as the market carbon price indicates the green economy is doomed. (get those climate scientists filling sandbags!)
She still mouths the same old “we are managing the economy to produce more jobs and growth” (for union retrenchment packages that is), whilst the budget goes backwards faster than a scared rabbit.
The only thing she has going for her is that business is getting hopeful that it will all be over in 2013.
Therefore I still stick to my prediction of a market continuing to go sideways.
As for another GFC – Japan has the highest debt repayments in the world, so they could be hoping for an excuse to write-off the repayments. Mind you lots of other countries are trying to catch up with them in the debt stakes.
Stillgotshoeson – 03rd Feb
Australian stock market outlook
My Bolivian Play has taken a hit to the downside Lachlan on fears of nationalisation as discussed last year.
IMF 7407 @ $1.31.5 $9740.20
ABY 13000 @ $.89.5 $11635
GRY* 8500 @ $1.32.5 $11262.50
PRU* 3900 @ $2.96 $11544
FML* 185000 @ $.054 $9990
BPT* 7500 @ $1.495 $11212.50
API 37700 @ $.295 $11121.50
BKP 714000 @ $.016 $11424
CTN 11000 @ $.995 $10954
Sold RAU 2500000 @ .002 Loss $5000
100k Portfolio Shares $98883 Cash $5721 Total $104605
Ned S – 02nd Feb
Are Australian stocks set to ride another bull market?
I thought the BDI was supposed to be a ‘leading’ indicator Pat?
How long term are you thinking?
Pat Cox – 02nd Feb
Are Australian stocks set to ride another bull market?
Well the BDI is back to GFC lows, so perhaps this suggests we are closer to the bottom than not. So I take the low BDI as a good sign, provided you have a longer term view!
Greg Atkinson – 01st Feb
Are Australian stocks set to ride another bull market?
Well 90% or more of world trade moves via ships so the BDI and trade volumes are connected I would say.
GoWest – 01st Feb
Are Australian stocks set to ride another bull market?
Thanks greg – I read a note about new ships being much more fuel efficient etc so that could account for it. What I want to know is whether the BDI reflects world trade volume/value.
Ned S – 01st Feb
Are Australian stocks set to ride another bull market?
I think Wang Qishan’s 20 November 2011 comment could be well worth keeping in mind for buy and hold types when one is considering timeframes Leigh:
“”The one thing that we can be certain of, among all the uncertainties, is that the global economic recession caused by the international financial crisis will be chronic,” Wang was quoted by the official Xinhua news agency as saying at the weekend.”
http://www.reuters.com/article/2011/11/20/us-china-economy-global-idUSTRE7AJ06720111120
The word “chronic” suggests something like 5 or 10 years to me rather than anything much shorter?
Admittedly though, they are going to throw $1.7 trillion at their economy over the next 5 years:
http://www.reuters.com/article/2011/11/21/us-china-us-idUSTRE7AK0MT20111121
We’ll just have to see how much of that benefits Oz.
But either way, if they are concerned, then yes, I’m concerned.
Greg Atkinson – 01st Feb
Are Australian stocks set to ride another bull market?
Go West I believe the BDI got down to just above 660 in late 2008 so we are basically there now. Clearly shipping rates have slumped since December in a big way and that can’t be a good sign. Yes there is some excess capacity out there but shipping companies have also been scrapping older ships and around 6% of the fleet is laid-up (sitting idle) so a lot of capacity has also been taken out of the system. In addition “slow steaming” is now in vogue which also effectively takes capacity out of the system.
What is going on? Well I would say that global trade volumes are falling and that stock markets are due to take a hit soon. But I am happy to be corrected and am open to hearing other views on the subject.
Leigh – 01st Feb
Are Australian stocks set to ride another bull market?
Ned S, Future Fund Shunning risk.Yes I noticed that, doesn’t inspire much confidence in their own back yard. Perhaps we are all thinking a little too short term ?
GoWest – 01st Feb
Are Australian stocks set to ride another bull market?
Your twitter indicates the BDI is @ 680 – below GFC levels according to the 5 year graphs. What is going on?
Ned S – 01st Feb
Are Australian stocks set to ride another bull market?
The Future Fund is shunning risk at this time Leigh:
http://www.abc.net.au/news/2012-01-31/future-fund-playing-it-safe/3802814?section=business
Leigh – 01st Feb
Are Australian stocks set to ride another bull market?
We know,many of our ASX blue chips are undervalued, we know they are going to seem very good buys when we look back in five years and we know they are likely to continue to pay good dividends. The only thing holding us back is that we have an over-riding fear that all is still not well and there is another big dipper to ride.
China has slowed and the Baltic Dry Index looks like a slippery dip but the U.S. is looking comparatively good. At least they make things there and can create their own economy. Australia is sound, although we no longer make much and as they say Europe is likely to muddle through. So dipper or not, now is a good time to buy as long as you are thinking five years and not five minutes and of course as long as you have the cash.
Greg Atkinson – 31st Jan
The Australian economy, house prices and economic outlook
Ned the BDI is just above 700 now and not far from the low it hit during the GFC. I am surprised how little attention this is getting in the mainstream business & finance media. Maybe it’s a bit too complex to write a cut & paste article about
Ned S – 30th Jan
The Australian economy, house prices and economic outlook
Yes, I saw that. I’m just waiting for Swannie to come out with another “Oz is just fine and dandy – Don’t you worry about that!” type statement.
Be interesting to see if the BDI goes down another 50 points or so tonight hey? 
Greg Atkinson – 30th Jan
The Australian economy, house prices and economic outlook
Interesting to see that a rating agency has put the spotlight on the big four banks. According to a report today in The Australian:
AUSTRALIA’S four largest banks were placed on rating watch negative by Fitch Ratings today, which said the lenders continue to have a weaker funding profile than similarly-rated peers.
Source: Fitch puts Commonwealth Bank, NAB, Westpac, ANZ on ratings watch negative
Ned S – 30th Jan
Are Australian stocks set to ride another bull market?
“Always make a realistic worst-case and best-case scenario model.”
Realistic worst-case scenario – The world goes A up.
Realistic best-case scenario – The world continues to muddle through. (Until it goes A up maybe? 
)
Stillgotshoeson – 30th Jan
Are Australian stocks set to ride another bull market?
Investment Management Sydney // Jan 30, 2012 at 1:09 pm
Nobody wants a second 2008-2009 financial desaster experience.
“Want” No, but be prepared to take advantage of any such disaster.
Forecast are great, but they are seldom exact.
The do not have to be exact, if you can at least read the trends right, one should do ok.
We just have to see, what the future brings and be prepared for it.
I look at the economic fundamentals as a key component as to where I will utilise my funds. At different stages in my life I will also have different outcomes planned for.
Always make a realistic worst-case and best-case scenario model.
100% agree, What will cause decline and what will cause advance and likelihood of these events. Risk exposure also.
