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Australian stock market outlook & forecast for 2013

January 8th, 2013 · Greg Atkinson · 40 Comments

Once again it is time to dust off the crystal ball, stick a finger in the air and toss some chicken bones over my shoulder in a vain attempt to forecast what the Australian stock market will do in 2013.  Last year the ASX All Ordinaries and S&P/ASX 200 posted respectable gains, but will they do so again this year?

Let’s start off with reviewing my call for 2012 which was outlined in Australian stock market outlook & forecast for 2012 which was posted in January of that year.

In a nutshell, I expected the All Ords/ASX 200 to end 2012 somewhere between 4800-5200 and although stocks did post a solid rally from the middle of the year, both finished below the 4700 level.  So I got the direction right (up) but…I was too bullish. Perhaps I can give myself 5 out of 10?

However my anticipation that the housing market and consumer spending would be weak did prove to be correct so I am relatively pleased that at least I was able to spot some trends.

This year I don’t expect the stock market to surge upwards despite the help it will get from lower interest rates and stimulus spending in China & Japan. The Baltic Dry Index is still in a slump, oil & gas prices don’t suggest a global economic recovery has taken hold and prices for commodities like iron ore will remain subdued.

Also it appears much the official economic data we see coming out of China has been “adjusted” for public consumption so I reckon it is prudent to be prepared for some nasty shocks during the year.  In addition the Eurozone is basically in a recession, the U.S. economy isn’t doing much better plus emerging economies like India and Brazil may find the going a bit rough in 2013.

So I am less bullish about the Australian stock market now at the start of 2013 than I was at the start of 2012 despite the lift it should get if  (when?) there is a change of government. However I still feel the market is trading lower than it should be so I expect it to finish the year in a range of between 4800-5200 – which is a range I have been focused on for a few years now.

This means I am forecasting that the ASX All Ordinaries and S&P/ASX 200 will rise less in percentage terms in 2013 than they did in 2012 or in more specific terms, finish the year around 8-10% higher.  Not a bad annual return, but let’s not forget the Australian stock market is still way below the pre GFC high when the All Ords/ASX 200 both peaked above 6500! Ah..those were the days my friends!

So in short, although I still have concerns about the global economy and believe the Australian economy will struggle this year I still expect the stock market to rise mainly because the market overall,  still looks a touch oversold to me from a long term perspective.

The sky is not falling in, the global economy is not imploding and we can still use paper money, but the hangover from the GFC is still with us and it’s going to take some more time for the markets to adjust and heal.

In regards to the wider Australian economy I expect the housing market to remain weak in 2013, the RBA to cut rates at least one more time and consumer spending to remain subdued.

As for gold – well I don’t reckon it will break through $2000 USD this year and I still believe it’s at bubble-level prices. Getting into gold before the GFC would have been a great move, getting into gold now to me seems like asking for trouble. I’m sure some smart and lucky traders will make plenty of money from gold, but I don’t want to be caught in the rush for the exit when the mass selling begins.

My stock market investment strategy for this year will be much the same as it was last year. I will focus on what I think are undervalued blue-chip stocks and stay clear of riskier shares including smaller companies for now.

Finally please remember that making a forecast is essentially a planning exercise and that my aim at this stage is to simply try and spot the trends rather than predict precisely where the market will finish at the end of the year.

Well that’s it for me..now over to you for your forecasts and predictions for 2013!

Greg Atkinson is the editor of Shareswatch Australia and the Managing Director of Ohori Capital He is originally from Australia but currently resides in Japan. He can be followed on twitter via @GregAtkinson_jp

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40 responses so far ↓

  • 1 Stillgotshoeson // Jan 9, 2013 at 10:04 am

    Well, I am sticking with my 3800/4200 end of year call for the ASX.

    I still do not see any sound economic fundamentals for the world economies for us to build any substantial rise on.

    Debt ceiling talks in the US I think should be good for precious metals over the coming months, maybe a 10% rise for gold, and a little more for silver over the coming couple of months. Gold $1700/$1750 Silver $33/$36 H1 2013
    Better than 50/50 chance of hitting $2000USD/Oz Gold and $50USD/Oz Silver in 2013.

    RBA moves on interest rates… hard call, we are getting to the point were they are no longer stimulating the economy, especially with only .25 moves. So will they sit and wait for more economic data before the next move or try a bolder .50 cut to see if they can force a move down on our dollar by trying to show an even stronger intent to move our dollar to foreign markets. Either way I see the chance of some cutting in H1 of 2013 and strong possibility of mortgage rates beginning to rise late H2 2013.

    Melbourne property market I expect further declines in the 5% to 10% range. National up to 5% decline.

    Unemployment figure to trend upwards nationally, more again in Victoria.

    I expect Labor to lose the federal election.

    Dollar will fall below parity H2

  • 2 Greg Atkinson // Jan 11, 2013 at 8:02 am

    Stillgotshoeson that’s a fairly bearish outlook for the stock market 2013 and yet what you outline could easily turn out to be fairly accurate if the Chinese economy slumps back again after the handover stimulus measures. If that does happen I suspect you precious metals call may actually not be bullish enough!

    It will be interesting to see if at least one of us is right (or close) at the end of the year :)

  • 3 Matthew // Jan 11, 2013 at 11:38 am

    Happy to move my predictions from the R/E discussion here:

    Net i/r (NF that is interest rate) movement -.5

    National Property movement — +2.25%

    State by state range:

    WA — +3.5%
    NT — +7.5%
    Qld — +2.75%
    SA — -1.25%
    Vic — -.0001%
    NSW — +1.75%
    TAS — +1.95%
    ACT — +2.25%

    CPI — 2.25%

    Wage Growth — 4.25% (up from 3.7%)

    ASX — 5,050

    7% gain for the ASX is not unreasonable if there is no further significant deterioration of the global environment. Profitability of the banking and communications sector will not fall in 2013 and these stocks will continue to rise.

    Strong Mining and Mining Related stocks will continue to post gains. FGE and MND for example in the ECPM environment are both forecasting significant revenue growth.

    Retail, airline and media stocks worth avoiding.

    Property markets to post modest gains as outlined above. Like it or not, the positive net migration and low available stocks in WA & NT will see above average growth. The east coast will remain subdued. Qld is the only prediction I make with apprehension. Could be out by as much either way (as little as 0%, as much as 5%)

    Gillard out and MRRT & Carbon Taxes repealed assisting business confidence, though too late to have a major positive impact in CY13.

    Dollar to remain at around $1.02. If there is something in a bubble, it is our currency and while a fall below parity would be of great assistance to our economy I cant see it happening this year.

  • 4 Stillgotshoeson // Jan 11, 2013 at 12:34 pm

    I still see the global crisis unfolding, Spain: Youth unemployment at 57% (not sure what % will spark greater civil unrest in Spanish youth) but I hazard a guess that it is probably closer than we know. Greece unemployment has risen. The situation in Europe is not under control.

    I am still looking to see the ASX fall below 3000 before this whole thing is over. The economic fundamentals I believe are still there for a significant fall in the ASX, the bandaid and can kicking I have underestimated its ability to prolong what I think is inevitable. Not sure if it was last year or 2011 when I said we could have 5 more years of this. Might well be the case.

    As for precious metals, I would like to make a higher call but I am convinced the PM market is manipulated and there will be efforts made to surpress or dampen prices at the $2000k level for Gold. At some point the manipulators will lose control and Gold will reach whatever high it is due to reach.

  • 5 Matthew // Jan 11, 2013 at 2:18 pm

    Stillgotshoeson, you can look for it, but I simply cant see how the ASX will fall below 3,000 from here. You are talking a 43% fall from here taking the market back to a level not seen since Jan 03.

    Forget Spain or Greece, for that to happen you would need to see China completely stop buying from here, Iron Ore prices falling to around $40/t, banks losing billions on defaults in the mining sector, and our Government doing nothing at all to stimulate a falling economy.

    It is highly possible (if unlikely) that the market could tip back down to mid – high 3,000′s but I cant see things getting that much worse than the worst they have already been.

  • 6 Lachlan // Jan 13, 2013 at 5:48 am

    My prediction for our stock market this year is not a dramatic one. I expect the price to experience volatility between 5000 (XJO) and near 4400 before settling at the end of the year between 4400 and 4600.
    The only fundamental which will make a meaningful difference to the stock market imo will be an official resolution (either controlled or otherwise) to the debt loads which are burdening the private and public balance sheets. Otherwise market events, despite their ominous nature at times, create only a brief effect sufficient to keep prices oscillating in a can kicking range trade. Therefore I am not going to bet on a large price swing now because the trend is for otherwise….. granted trends change.

    Looking forward over several years..until the debt load is addressed, a time which could still be some years off (or not) I believe the ASX200 will stay compressed somewhere between around 3600 and 5000.

  • 7 Greg Atkinson // Jan 14, 2013 at 1:09 pm

    Thanks for your forecasts Matthew and Lachlan. We seem to have a good spread now so I hope one of us will be close to the mark at the end of the year!

  • 8 Matthew // Jan 15, 2013 at 10:55 pm

    Hi Greg,

    In the world of routlette, we have covered the board! so we are bound to collect some chips but still lose!!

    Be an interesting year I think

  • 9 Lachlan // Jan 16, 2013 at 6:05 am

    Market has paused likely to jump through 4800 now.

  • 10 Greg Atkinson // Jan 16, 2013 at 9:13 am

    Matthew the spread of forecasts amongst the ‘experts” also has most bases covered as well from calls that 2013 see another crisis unfold to this year being the year of the bulls.

    One thing is for sure, we can’t all be right but at least we won’t all be wrong :)

  • 11 Stillgotshoeson // Jan 16, 2013 at 2:14 pm

    The roulette wheel has 00 on it, it is rare for it to come up, from time to time though it does and wipes out everyone.

    There is always the chance of a 00 event occuring.. :)

  • 12 Hiren // Jan 21, 2013 at 1:45 pm

    ASX should pull up to 5000 by end of March…only 250 points away!
    Expect some correction in late April to June to coincide with US debt resolution period expiring and tough decision being made!
    Risk:
    US Debt. This shouldnot be a problem in short term (2-3 months) but is in long term. You will see a market rally in short time when debt ceiling is lifted.
    Europe Debt Resolution. However, with bond value going down, the risk is lower.
    There might be a perfect storm in May or June but play it by the ear! Keep it deversified!

  • 13 stock prediction // Jan 30, 2013 at 6:00 am

    The stock market prediction is all about dynamics and that is why it is important to accurately forecast further movements of stock bids.

  • 14 Matthew // Feb 8, 2013 at 2:56 pm

    Market poised to break through 5,000 next week. Be interesting to see if it drops back to around 4,500 and re-climbs, or 5,000 becomes the new floor

  • 15 Lachlan // Feb 8, 2013 at 6:14 pm

    Matthew I reckon way or another a bunch of shorts will enter there. It’s just whether or not they lose their stops and their shirts to the longs….which they well could. Markets lead the way into the future we can only guess at despite what may seem obvious sometimes.

  • 16 Matthew // Feb 13, 2013 at 2:21 pm

    Market closes at 5024. The correction has to come in the next couple of weeks I would reckon if it is going to happen. Question is where does it settle? I would speculate not worse than 4,750

  • 17 Greg Atkinson // Feb 14, 2013 at 8:25 am

    Well the last few times the market hit 5000 it fell around 10% or more afterwards so it could get down to 4600 or lower. “Could” being the operative word..the market could also keep heading upwards but I doubt it.

  • 18 Lachlan // Feb 16, 2013 at 9:55 pm

    I’ll clarify my outlook on stocks. I said I would become bearish on stocks at this point and I am but it more likely than not will be a short term proposition. I think the correction due to begin soon has a higher chance of pulling back by ten percent or so than say 20-30%. I would be buying on the dip anywhere in around 4400 to 4700 depending on the action in individual stocks which are sought after. I believe it is a risk to be out of stocks completely. The risk is that the market may rally on inflation few can see or believe in at present. I am content that stocks may run on a different schedule than mum and pops economy.

    AUDUSD may soften as far as 98/99 now too but with long term bull remaining in tact.
    PM’s have come off after a failed reversal attempt and will go lower here…a little, imo.
    Our markets have a the chance of overshooting 5000 (xjo) to maybe 5100 which will wipe out some retail shorts before the correction starts.

    Have had trouble with my ADSL net service (does not exist) since the floods Greg and just bought a smart phone (Android apparently) which is feeding a signal through to my computer….luckily my eleven year old knows how to rig these things up. Kids take to new tech so easily. Maybe I am just a technophobic type….or technowillfullyignorantandlazy ;)

  • 19 Stillgotshoeson // Feb 17, 2013 at 3:41 pm

    I am still maintaining my view we will retest and drop below the GFC lows on the ASX before this is all over. That is more and more likely looking to be a couple of years away. As late as 2017.

    Governments and central banks are still “messing” with currencies and markets and economies so can kicking will continue.

    I am expecting a pull back in the DOW and ASX with in the next few weeks. Early to mid march.

    10% to 15% range or so. US debt ceiling negotiations in April could give another boost after any pull back.

    Gold may test the $1550 level but I don’t think it will go below that, not for any length of time in any case. Cost to mine gold is quite high when averaged out and supply will drop off if it goes too far down.
    Silver being more volatile may retest the low $20′s again in the nesr term. I will certainly be a buyer of Silver in any significant pull back.

    Long term trend is still to the upside imho.

  • 20 Greg Atkinson // May 21, 2013 at 11:11 am

    Well gold has well and truly fallen below $1550…but for how long? My view is that it is down for the count and will trend lower over the next months especially if Soros keeps selling.

  • 21 Stillgotshoeson // May 21, 2013 at 3:47 pm

    I think towards the end of the year it will be heading back up towards the $1500 range again.

    Figures from the US will, I think, show things are not progressing as well as they should and QE will continue, will be the message from Bennie and the Fed.

    The selling is in paper not bullion…

  • 22 Lachlan // May 21, 2013 at 5:28 pm

    “The selling is in paper not bullion…”
    Its easy to prove that is true although I am not seeing the shortages here the Yanks complain about. Except in a few lines.

    Greg I continue to agree with your gold bearishness to some extent although I did expect this dip here and bought a little yesterday before the rebound last night. Will have to wait and see if that turns into a longer term reversal.
    George is a true insider from what I can see. His opinion interests me also but I don’t take anything for granted. George says he has started to buy shares for what it is worth.

    NCM imo will go a few bucks lower here…i never thought it would go below 29 to be honest. It seems quite rediculous and that may be a something to do with the fact the markets are so distorted by HFT/derivatives and whatever else etc but my bet is that volatility in such conditions will swing markets to extremes in both directions eventually.
    cheers fellas

  • 23 Greg Atkinson // May 21, 2013 at 8:28 pm

    To QE or not to QE..that is the question – it is starting to make my head spin. If the US economy looks like it is not doing well then QE stays on the table and stocks will rise..seems a bit like a bubble forming..no?

  • 24 Stillgotshoeson // May 21, 2013 at 9:59 pm

    Well we know what happens if the QE tap stays open.

    We don’t know is what will happen when the tap is turned off…

  • 25 Lachlan // May 22, 2013 at 5:46 am

    I doubt the tap cannot be turned off. Everyone must keep on going and also occasionally increasing purchases until we make a structural change. The fed dialogue in the meantime is probably just to steer markets…which is after all what this is all about. Like “tapering” means they want to cool things. So the fed is still sitting on 85B in new purchases each month last I looked and when the next shock comes sometime soon now then the rhetoric will change to increased purchases and new spending programs.
    Despite all this it is apparent that any QE continuation does not guarantee a performance in any market in particular.

  • 26 Greg Atkinson // Jul 10, 2013 at 7:24 am

    Well the IMF are downgrading their growth forecasts (no surprise)so it will be hard for the Australian stock market to surge ahead in 2013.

    From Forbes:

    “A bearish report by the IMF. The global economy will grow only 3.1% this year, with output inching up to 3.8% next year, a quarter percentage-point downgrade from the IMF’s April numbers. What is problematic is that everyone seems to be set for slower growth, with the exception of Japan which is currently engaged in massive quantitative easing and pushing every possibly lever to jump-start growth.”

    and:

    “Much of the uncertainty resides in China, where the government has engineered a dangerous liquidity squeeze to clamp down on a massive shadow banking system. China is forecast to grow 7.8% and 7.7% over the next to calendar years respectively. Central banks across the emerging market space face a difficult challenge, being forced to manage supporting weaker output while containing outflows. As currencies have depreciated against the dollar, space for easing is limited given inflationary risks and rates that are low by historical standards.”

    Source: IMF: Only Japan Shines As U.S. Lags, Europe’s Recession Deepens And China Brings Down EMs

  • 27 Matthew // Dec 26, 2013 at 10:23 pm

    Hi Greg,

    With just a couple of days trading left this year are we happy to call the results?

    XJO will finish around 5,300 points

    Interest Rates down 0.5%

    Housing up (according to ABS to end September) 7.6%

    A$ trading at around $0.88

    Gold at around US$1,200

    Wage Growth 2.7% to end September

    For me it was not a year of any real surprise, with the exception of property. I figured (as predicted) the market would be subdued in 2013 and was anticipating a 6% – 7% rise in 2014. I would guess this earlier than expected rise has come off the back the softer interest rates and long term subdued i/r forecast.

    The lower A$ is the direct result of the RBA strategy to cut rates so I suppose one would not occur without the other.

    The big thing for me is the warding off of the bear-pocolypse. ASX did not crash, property did not see a plunge as people tried to “rush for the exits” and lemon trees did not sprout new limbs on the back of burried precious metals (gold).

    So no 43% ASX crashes, no real losses due to the youth unemployment rate of Spain, nothing bad enough to see any real change in investment strategy.

    Are we going again for 2014?!

  • 28 Biker Pete // Dec 27, 2013 at 8:49 am

    Matthew: “I would guess this earlier than expected rise has come off the back the softer interest rates and long term subdued i/r forecast.”

    It’s likely that property investors have pushed prices up, too, Matthew.

    Bears had predicted property trauma based off the exodus of retirees from the market… baby boomers downsizing, etc.
    Instead SMSFs have called that asset class as safe(r), ‘predictably’ income-producing and even growth-oriented (depending on location, of course.)

    A few we know have downsized. One couple told us last night they’d then _upsized_… and bought a couple of duplexes… .

  • 29 Greg Atkinson // Dec 27, 2013 at 10:06 am

    Matthew it looks like the market will close with a gain greater than the 8-10% that I expected which for most investors is a positive. Gold has fallen which is no surprise to a gold bear like myself, although I did not expect gold miners like Newcrest Mining (ASX:NCM) to be beaten down so much. The gold price has now come down almost enough to make me a gold bull..but not just yet.

    As for property prices I am waiting for the next release of the RBA chart pack. Has the impact of lower interest rates started to fade or will the charts indicate prices are still edging up nation-wide?

    Overall I reckon the ASX All Ords/ASX 200 is now trading in the over-bought zone and that a pull-back to below 5200 is not far away, but it looks like that may not happen this year.

  • 30 Matthew // Dec 27, 2013 at 1:43 pm

    Biker, I am sure investors are part of the heat at the lower end of the market. The “baby boomers will exodus the market” is a pile of rubbish that comes consistently from one person. Why in your right mind would a retiree sell their investment property, pay an agent fee and capital gains tax only to place this reduced value into a low interest term deposit?

    Was never going to happen. It is more likely that as baby boomers peg out over time their kids will cash in the inheritance, but that isnt going to be an instant impact on anything.

    As I have said before I know personally many baby boomers, my parents included, generating 6 figure retirement incomes from their investment properties.

    Greg, I simply couldnt buy into gold setting a $1,500 floor. Talk about bubbles, that is one right there. I think it is still overvalued, but I have no interest in buying the physical product, I do have an interest in buying the shares of the miners if I see fair value. Like you I didnt see Newcrest getting smashed the way it did.

    Property, even the full year and any softening will still see a >5% year, which in my opinion is outstanding against the uncertain backdrop and general pessimism that was around most of the year. It is actually a little worrying if 2014 backs up with the same kind of number, as it will leave many regions still at 10% plus 10 year growth. However the resiliance of the market tells me it will never crash.

    ASX I agree is probably overvalued at the moment. It is certainly hard to find a bargain at the moment, but I guess that isnt the point is it? A tapering back toward 5,000 wouldnt hurt too many people, but do you see it settling back in the 4′s? I cant see it happening myself. Perhaps 2014 will be a year the market goes largely nowhere?

  • 31 Biker Pete // Dec 27, 2013 at 7:09 pm

    +1

  • 32 Lachlan Scanlan // Dec 29, 2013 at 6:15 am

    With property prices going north like that it shows how people are still keen to buy in when the banks says they can borrow (rates lowered). But will we run out of magic bullets one day or will other factors come into play first. You’d think if it were possible to sustain elevated real property prices anywhere in the world than Oz would be the place. There’s something here for most people, passive or business minded, even if Mr Keating thinks it’s the a…end of the world.
    A friend of mine bought a place on The Hill this year and there was some money chasing prices up there.
    In the country much of the property moved too with my favourites list reduced right down now.
    ASX hard to gauge this year coming with the chart in the middle of a range. My prediction to trade below 5000 for the year was beaten from the outset by the technically important move which held above 5000.
    This year what will happen to commodities…is my big question. And also currencies now that so much
    has been done to circumvent the dollar. A steady enough transition so far.
    On the AUD I would think that as with gold that these markets are going to bottom next year some time…I just don’t think it’s all over… just yet. After the AUD bottoms and the market is shaken out I will be looking for a new high in the currency as stated numerous times. Not that such a thing is sustainable.

  • 33 Biker Pete // Dec 29, 2013 at 10:21 am

    Lachlan: “You’d think if it were possible to sustain elevated real property prices anywhere in the world than Oz would be the place.”

    There are a few good reasons to support that view, Lachlan. Mine dew, there are also a number of good reasons why Australia may see our very high property prices maintained. Among them:

    * Population increase: There’s (still) no good reason why that might change… and given our preference for a coastal urban lifestyle, supply is limited.

    * High wages: Even with a plateauing of wage growth, the capacity to repay a loan (or pay very rent… while working) is high.

    * Low interest rates: Given that’s not a permanent situation, affordability is _claimed_ to be higher-than-ever.

    * As Matthew noted, above, a lack of any other great financial alternative. (But see my final note, below.)

    * Aussies do value home ownership. (We just (re)watched The Castle, with four OS young’ns… our two sons and their GFs… all here for Christmas. It still resonates! :) )

    Our eldest is still convinced Index Funds are his best primary option… and his gains again totally, utterly eclipsed ours this year. He actually made far, far more than any of us, just on the falling Australian dollar alone. As Greg has previously noted, had he been in IFs just prior to the GFC, he’d be behind on IFs. He knows that, but he’s in for the very, very long term… and just keeps investing all his profits.

    It’s got us really thinking about his mum’s untouched Super… .

  • 34 Lachlan Scanlan // Dec 30, 2013 at 6:08 am

    Well BP he bought into a collapsed market which was a sound idea. I know that long term inflation trends are mathematical certainties of this credit system. Maybe actual inflation, what we see over shorter period of years, is more tied to political and social considerations, negotiations between major trading nations and constraints in supply by some of the big players in places.
    As for the index well it remains technically bullish in the intermediate term just as it was 12 months ago when we put through our predictions here. That is not to say it has to stay that way of course but following trends at least increases odds. It was my thought that trading for 2013 might once again flip around in the 11/12 trading range for the year before a sustained break out.
    From here one could make all sorts of predictions of course. I would look at the charts and the politics first. The credit system itself is probably not the place to look for a 12 month prediction.

    Presently I would favour a continuation of the bull market.

    I would mention I think that the reserve currency issue will be officially addressed quite soon now (unofficially seems much has already been done). Whether or not one reads a bear-pocolypse into that is another thing. Not sure what others think?

  • 35 Biker // Jan 2, 2014 at 10:49 am

    Lachlan: “Well BP he bought into a collapsed market which was a sound idea.”

    Fortunately, we both did. As he pointed out, I called the bottom, but departed the scene over a thousand points too soon.
    (As he did, exiting gold at around half its peak… .)

    I have to admit that I’m surprised Aussie shares are as high as they are, but this probably reflects my ongoing ignorance! :)
    I can see that past gains I’ve made in the sharemarket have largely been based on pure luck. My one real loss since 2003 occurred because I was emotionally invested, rather than cerebrally.

    I’m tending to agree with the experts that rents will plateau this year. Property should rise a little, (perhaps a lot in a few areas) but apparently may fall in Canberra, due to cuts*. It appears unemployment may rise, reducing confidence… but it seems to us West Aussies are spending left, right and centre. I haven’t seen any retail spending figures, but everyone we know bought (much) more expensive gifts (and more of them) this festive season. And every man and his dog has a new car!

    I suspect that any goldminer with a high CBR will suffer… and expect a couple of the small caps may go under.

    Damned if I know what might happen politically… .

    * Read recently in API that another interest rate fall would affect property prices negatively. Still trying to figure _that_ one out… .

  • 36 Lachlan Scanlan // Jan 5, 2014 at 6:08 am

    I know we hear this stuff all the time but anyhow…

    02-Jan (Telegraph) — Much of the Western world will require defaults, a savings tax and higher inflation to clear the way for recovery as debt levels reach a 200-year high, according to a new report by the International Monetary Fund.

    The IMF working paper said debt burdens in developed nations have become extreme by any historical measure and will require a wave of haircuts, either negotiated 1930s-style write-offs or the standard mix of measures used by the IMF in its “toolkit” for emerging market blow-ups.

    But then just add politics and who knows how long this will go on.

  • 37 Biker // Jan 5, 2014 at 10:48 am

    A savings tax? Hard to imagine, with rates so low! Cash, once claimed to be king, already seems a poor relation tax-wise, compared to concessions offered by shares, property and Super.

    My perspective that ‘the more things change, the more they stay the same’ gets a little shaken occasionally, but political interventions appear to ensure that the planet remains on its axis. Re-election priorities mean governments have a vested interest in stability… .

  • 38 Lachlan Scanlan // Jan 5, 2014 at 6:32 pm

    “the more things change….,”………..well yes, nothing they are proposing is truly ground breaking. Just business as usual. Nothing new under the sun either, ha.

  • 39 Lachlan Scanlan // Jan 7, 2014 at 8:02 am

    From News.com.au in relation to NCM

    Newcrest posted a $5.8 billion full year loss this year and chairman Don Mercer and chief executive From News.com.au in regard to Newcrest
    Greg Robinson have announced looming departure dates in the wake of this year’s poor performance.
    However, this year’s heavy $US600 an ounce gold price falls – the worst in 30 years – came as the company delivered $3.5 billion in projects at its major Lihir and Cadia projects, which was cruel timing, Mr Robinson said.
    Mr Robinson predicted the gold price would rebound from current levels when speculation ended about when the US Federal Reserve will taper its expansive monetary actions.
    “I think the gold market will again focus on gold’s primary purpose as a risk diversification asset to currency, interest rates, inflation and political risk,” he said.
    “With strong physical demand for gold, supply restrained and economic drivers remaining vulnerable, I think the external conditions remain positive for the gold price outlook.”

  • 40 Lachlan Scanlan // Jan 15, 2014 at 7:31 pm

    Greg it is interesting to see how extended the S&P500 is in stark contrast to Newcrest. Obviously there needs to be some volatility soon to set things back toward an equilibrium. We might see our best buying opportunity coming up for a lot of things since the GFC lows. Every investors dream. I am hoping the commods get one more panic shake-out before we head back to that equilibrium. I am not predicting the Dow to fall of the face of the earth or anything …or the XJO…just some sort of correction and a change in some correlations which have been strong in the last few years.

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This site is not intended to act as any form of financial or investment advice.  © 2008–2013 Shareswatch Australia — DisclaimerCutline by Chris Pearson

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