Shareswatch Australia

At the start of last year I did not update my Australian stock market trends simply because I thought the market was basically going nowhere. This year however I feel it is worth looking at some interesting sectors again in an attempt to pick out some areas where investors might be able to find bargains and position themselves for the next bull market.

Over the last six months stock markets globally have become more volatile as Europe and the U.S. struggle to revive their economies.  To make things more complicated many advanced economies have racked up so much debt during the ‘good times’ that they now don’t have the capacity to spend their way out of trouble.  There will be no quick fixes and the situation is worrying enough to even rattle the commodities bulls.

This week the Australian stock market slid into what I would call a bear market although some would argue that it has avoided such fate by a whisker. The reality is however that the ASX All Ordinaries did close below 4000 recently and that represents a drop of just over 20% from levels seen in April. If it looks and feels like a bear market, then for me it is a bear market.

According to many major news outlets and financial commentators in Australia, the recent trade data released by the Australian Bureau of Statistics (ABS) is proof  that the Australian economy is “booming”.  The Reserve Bank also seems to think the nation is in the midst of a boom and the amazing Ken Henry (of where is my tax report fame) reckons Australia will enjoy a “golden age” for decades.

As the Australian ASX All Ordinaries Index slowly crawls towards the 5000 level again, now is a good time to look at how some stocks have come through the global financial crisis. Does it look like a global recovery has finally taken hold, and is the Australia stock market poised to surge higher over the next few weeks?

I have not focused on the Australian political landscape for a few months but the recent tragic deaths of 4 people installing home insulation as part of the Rudd Governments spend-a-thon, has reminded me of the dangers of a government obsessed with poll numbers and popularity.

For some time now investors and the public in general have been drip fed details of what might or might not be included in grand sounding “Australia’s Future Tax System Review”. Now that the report has been handed over to Wayne Swan and the Government it might be tempting for us to think that we will see sweeping changes to Australia’s tax system, but I am here to tell you that little will happen and here’s why.

Another year, another decade and time once again to look at our shares portfolio and perhaps review our positions. Although the global financial crisis has been tough for investors the fact is that the Australian stock market did bounce back in 2009 and if history is any guide then we are likely to see it finish higher in 2010.

From the moment the Emissions Trading Scheme (ETS) concept was floated I had an uneasy feeling about it and unlike a lot of recent anti-ETS converts, I have voiced my opposition to this legislation for many, many months. Simply put, I don’t see the logic in trying to help the planet with a tax.

The last few months have been more kind to Australian stock market investors however I have mainly been on the hunt for stock bargains rather than in selling mode. Therefore since May this year my focus has been on trying to buy some small parcels of shares in companies that I feel will do well over the next few years rather than profit taking.

Australian Worldwide Exploration Limited (AWE)  is an Australian based oil and gas explorer/producer that over the past few years that has ramped up production and profits. Over the last year however the fall in energy prices has caused a drop in earnings and it’s share price, but if you believe that oil and gas prices will move higher over the next few years then AWE may be a good stock to watch.

Hover over the stock price change to see the stock price graph or click on the name of the stock or index to see more detailed information on the Yahoo Finance website.

The tentative signs of a global recovery (albeit a weak one) are becoming stronger each day and people who predicted a global depression have faded from view.  So the Australian economy is poised for growth again and everything is back on track right? Well not quite.

Sometimes when confronted by a seemingly endless barrage of economic data it is beneficial to just grab a cup of coffee and calmly review a few stock market related charts to see if they are trying to tell us something. Yes it is pretty chaotic in the global economy these days but believe it or not, some order appears to be creeping back into the Australian stock market.

Lights, camera, action! It is almost time for another budget from the masters of spin and we are all invited to watch the drama unfold. The 2009 federal budget will be one of the most eagerly awaited budgets in years and the key question for me is: why is the Government talking up the need to borrow and spend one moment and then in the next breath, warning us that we all need to share the pain because the Government has to reign in spending?

It appears to me that the form of democracy we have in Australia (and other parts of the world) is really starting to struggle now in the 21st century. After all, we are basically using a form of government that is now a few centuries old and has been responsible for just as many blunders and failures across the world as it has successes. So maybe it is time we started to think about giving our system of government an overhaul and I believe we can learn a lot from the Romans.