Shareswatch Australia

Australian stock market investing, ASX charts, analysis & market forecasts.

Shareswatch Australia header image 2


Australian Stock Market Outlook & Forecast for 2016

January 29th, 2016 · Greg Atkinson · 68 Comments

Although much of the commentary in the mainstream finance media conveys the impression that the Australian stock market is in the midst of unprecedented correction, the reality is as usual somewhat different.ย  In fact, considering the rout in commodities prices it’s somewhat surprising that the ASX All Ordinaries and S&P/ASX 200 are still around the 5000 level. This suggests to me that the market is probably near a multi-year low and that despite all the pessimism, it’s unlikely to finish the year lower.

Last year I expected the Australian stock market to post a modest gain. (see the Australian Stock Market Outlook & Forecast for 2015) By the middle of the year this forecast looked too low and plenty of commentators were predicting the ASX All Ords/ASX 200 would push beyond 6000. However the fall in commodities prices turned into a rout and dragged the All Ords/ASX 200 back near 5400.

I certainly did not expect BHP Billiton shares to sink under $20 nor oil to go under USD $30 a barrel. I did however predict that commodity prices would fall and that highlights the problem with all forecasts – you can make the right call, but still be wrong.

ASX All Ords, BHP Billiton & AMEX Oil & Gas Index 2 Year Chart

ASX Oll Ords, AMEX Oil & Gas & BHP 2 year chart

The chart above is a good way to view how commodities prices have fallen during the last couple of years. From around Q3 2014 the trend has been all downhill although it did look like prices might stabilise in early 2015.ย  But as the year progressed the commodities rout continued and dragged down the ASX All Ords (XAO) as well.

Despite this, the Australian stock market held up relatively well. The ASX All Ordinaries Index started the year at around 5400 and finished at around 534o – so although it fell back slightly it was certainly not as bad as some media reports suggested. If we factor in dividends then long term investors would most likely have done better from stocks in terms of income than having cash in the bank.

If we step back even further and look at the 10 year view of the ASX 200 then it’s clear the recent correction really isn’t that special or unusual.

S&P/ASX 200 Index 10 Year Chart

ASX 200 Index 10 Year Chart

As with all stock market charts there are multiple ways of looking at them depending on what time-frame we focus on. For example if we look at just the last year of the above chart, then the outlook appears very bad and one could conclude that the market is set to fall further.

My view however is that it’s just another correction and is not directly comparable to the correction seen during the global financial crisis in 2008-2009.ย  I appreciate we are in a period when scary market predictions are popular, but as far as the Australian stock market is concerned the outlook for 2016 is actually quite positive.

ASX All Ords and Dow Jones Industrial Average 5 Years Chart

ASX All Ords and Dow Jones Index 5 year chart

Some years ago I wrote that the U.S. Dow Jones Industrial Average Index (DJIA) would outperform the Australian ASX All Ordinaries Index and as the chart above indicates, that’s basically what has happened. But during the next few years we may seen that situation being reversed as the era of low interest rates and quantitative easing (QE) in the U.S. draws to an end.

Also during the next 12 months I expect commodities prices to recover some lost ground and by the end of 2016 my forecast for oil is to be around USD $40-50 a barrel and iron ore to be around USD $60 per tonne or higher.

Based on this mild recovery in commodities prices, my forecast is for the ASX All Ords/ASX 200 to finish the year in the 5400-5600 range or gain between approximately 8-10%. That may seem like a somewhat bullish call looking at the market today, but it’s simply a move back towards the long term trend and will still leave the market well below the last bull market high reached in 2007.

This article was written by Greg Atkinson who is the Managing Director of Ohori Capital. Greg is from originally from Australia but now works and resides in Japan. He can be followed on twitter via GregAtkinson_jp


68 responses so far ↓

  • 1 Greg Atkinson // Feb 3, 2016 at 8:07 am

    Well so far it doesn’t look like oil or the resources sector has found a bottom just yet. The Baltic Dry Index has also just hit another all time low and is now down near 300!

  • 2 Stillgotshoeson // Feb 3, 2016 at 8:20 pm

    You can make the right call and still be wrong. Something there for all of us Greg

    2016 is shaping up to be an interesting year economically. I was expecting BHP and RIO to suffer large falls as part of my expectation of new lows on the ASX. Read an article today saying banks are being shorted at their highest level in 3.5 years. The 4 majors and the major miners are a significant weighting to the ASX. If the those shorting gain some traction in getting further falls on the banks share price(s) then we could see some further falls on the ASX.

    Hard to make a call on where we finish at years end.
    Draghi is promising more stimulus for the Euro nations.

    I can’t see the Fed raising interest rates 4 times with the current economic conditions globally and in the US.

    1 more rate rise and then a reversal would not surprise me. A reversal in policy 2H 2016 could see a relief rally for the equity markets (ours included)

    I expect unemployment to rise a little this year as the car companies wind up production and property price gains soften. People feel richer when their property is going up leaps and bounds. Softer wage growth coupled with lower capital gains will probably mean a softening of consumer confidence.

    Government action or inaction this year is going to be the decider on how bad things are going to get.

  • 3 Greg Atkinson // Feb 6, 2016 at 8:44 am

    The major banks & miners certainly have a major influence on the ASX 200. If the banks join the rout of the mining stocks then things could get quite ugly. On the positive side RIO & BHP have staged a mini-comeback so maybe they’re in the process of bottoming out?

  • 4 lachlan // Feb 9, 2016 at 5:59 am

    Weak action on the dj last night just when it needs to rally hard. USD gold pushing hard now to make a technical reversal which if successful will unite it with gold priced in AUD EUR and CAD which reversed in Oct 2014.

  • 5 Stillgotshoeson // Feb 9, 2016 at 6:55 pm

    Bank stocks hammered a little today. I’m not expecting any flow on contagion event from it with a corresponding flash crash from it.

    There is a lot of Superannuation monies tied up in the banks as well as older investors having direct exposure to them for the dividends.

    If dividends are maintained then a little capital loss will be tolerated. If dividends are cut then opportunities may be sought elsewhere and that could impact bank share prices.

    Election year in the US and here, we could see some assistance to the markets flow from that for a 2H rally for the ASX and DOW.

  • 6 lachlan // Feb 9, 2016 at 7:24 pm

    Yeah well I though Maquarie would go against the flow there Shoes but instead they gave up their previous gains altogether. SAR and EVN having a nice run at least something to be happy about.

  • 7 Greg Atkinson // Feb 9, 2016 at 8:10 pm

    I’m sticking with my forecast for the end of the year despite the current gloom. Yes the global economy has hit a rough patch but overall I don’t think the sky is falling. On the downside the ASX 200/All Ords are still moving around the trading ranges I outlined a few years back which shows that the Australian stock market continues to struggle.

  • 8 Stillgotshoeson // Feb 9, 2016 at 8:21 pm

    I won’t be surprised to see EVN and SAR increase by a $1 a share or more in 4Q 2016. SAR meeting guidance of near doubling of production and no debt bodes well for its share price.

    EVN paying down debt rapidly means debt free in short order too. A rising gold price in USD and AUD is cream on the cake.

    SBM has been on a tear of late. Looking overpriced now based on metrics I’m thinking. I sold 50000 of them today.

  • 9 Biker // Feb 10, 2016 at 11:48 am

    Always enjoy a *chuckle* at some of the predictions online.

    Take this morning’s classic, at http://www.news.com.au/finance

    “Australian Market set to open higher”

    The market instantly fell on open… and now reads:
    All Ords -102 ASX 200 -105.6 S & P/ ASX 100 -48.7

    Strangely, my wife’s Super fund didn’t update its online presence this morning, possibly hoping for an upswing. Their call centre line was jammed much of the morning. Does make ya wonder… !~ ๐Ÿ˜‰

  • 10 lachlan // Feb 12, 2016 at 6:18 am

    The dow looks like its in classic shape for a move down of roughly 2600 points in the coming weeks. It could also bounce 2600 points or else go down a little and then up a little…..And now for the weather. Winds light to variable occasionally cyclonic.

  • 11 Greg Atkinson // Mar 3, 2016 at 6:39 am

    Looks like the markets have stabilised and even oil is now clear of $30. Next stop for the ASX 200 could be around 5400 perhaps?

  • 12 lachlanl // Mar 3, 2016 at 7:56 pm

    Well Greg I still think the dow needs to go lower. Though I think the pms have got upside the commodities inc soft commods just keep wanting to fall off a cliff. Just waiting to see if the xjo tries to break out of its downtrend channel here and start bottoming. If one believes the dow needs to go down you’d usually say the same for the asx though. I don’t know what to think. I had an idea maybe the dow would see a lot of pain this year while the xjo didn’t fair so bad. My smashed up small caps have recovered decent ground recently.

  • 13 lachlan // Mar 7, 2016 at 6:12 pm

    Greg I just noticed the AUDUSD is trying to escape from its lower range (approx 69-73) and if that succeeds it should have a quick bolt to 76…”if” it succeeds. We’ll see I guess but interestingly the dxy is in a neutral kinda mood here and is looking to make up its mind one way or another, how to snap out of it’s recent range trading condition… so interesting market watching conditions from my perspective.
    As for aussie shares I am watching out for a good entry point somewhere, maybe some bargains are getting close at hand now. Oil is interesting. You might remember some years back now how predictions of $300 dollar oil were buzzing around. From this perspective maybe bargain hunters today are already in their Shangri-La. What could go wrong I ponder? Maybe a new normal where economic activity and oil/commods stay depressed for an extended time. Who knows eh? Otherwise you’d be buying for sure.

  • 14 Greg Atkinson // Jun 14, 2016 at 12:39 pm

    Well here we are in the middle of the year and the ASX 200 is at around 5300. So far this year the market has made a few runs towards 5500 and then fallen back. But the ASX 200/All Ords have gained some ground for 2016 at least.

  • 15 Biker // Jun 14, 2016 at 8:54 pm

    Whoaaaa! The Brexit BS is _hammering_ Sterling. Just as well we haven’t booked our return flights from North America. This may mean another UK adventure… .

    Checked the data and Greg is correct. The ASX was right on 5005 when we moved several of the missus’ Super accounts to cash. Still, with another six months to go… and more black ducks aerial… it’s early daze… .

  • 16 Lachlan // Jun 16, 2016 at 8:04 am

    Volatility is delicious… just watch out for that kid who throws up in the jumping castle

  • 17 Lachlan // Jun 16, 2016 at 9:01 am

    Neutral territory from some aspects in the currencies and XJO Greg. Interested to see how the AUD and USD resolve themselves.
    Talking of volatility the lithium market has been interesting.

  • 18 vita // Jun 16, 2016 at 3:07 pm

    Hi,
    Just a comment on the All Ords. It seems that the main European Indices have been trending down for some time, the China Index is going nowhere, the Dow if it continues to consolidate and break upside will be positive for our market. This is a 50-50 situation and time will reveal.

    regards Vic

  • 19 Lachlan // Jun 16, 2016 at 4:50 pm

    Sorry Biker… I thrive on the volatility myself, it creates shopping and investing opportunities…and market watching thrills of course. Cheap currency, cheap shares, blow off tops’n whatever but as volatility goes up then the opportunities just increase in magnitude. Add in some mathematical probability and all. As for that pitiable, hot dog laden kid on the castle he’s like the bear market in spec shares that reasserted itself after everything looked good to go…and 500% devaluation later… But it’s ok to go in the castle if you want to ๐Ÿ™‚

  • 20 Biker // Jun 16, 2016 at 7:28 pm

    Had a good laugh over your Bouncy Castle analogy, having recently watched one being attacked during ‘Graceland’, Lachlan. It’s true what you say about volatility. It does present us with some wonderful opportunities.

    We’ve patiently waited for Shoes’ promised ASX demise… and being _mostly_ in cash right now, we’re poised to ‘buy in’ if it falls significantly. If not, at least we’re playing a defensive game at the end of our 40-year acquisitive phase.

    Will this period be remembered for its lounge-room flight of Trumpeting-Brexit black ducks, I wonder? ๐Ÿ˜‰

  • 21 Greg Atkinson // Jun 17, 2016 at 11:52 am

    Hi Vita (Vic) – The markets are being moved around by a lot of issues at the moment ranging from oil prices, Brexit, US Fed policy & the overall feeble growth of the world economy. I’m actually starting to become bearish over the short-medium term but I guess we will just have to see how all the various factors play out in the months ahead.

  • 22 Biker // Jun 24, 2016 at 6:26 pm

    The first of two major political black-duck-down events has occurred, with markets plunging. Who could have guessed this might lead to Cameron’s resignation, a possible disconnect with Scotland… and the likely end of the UK as we know it?

    In that vein, what might a Trumpumphant reign in the US precipitate?

  • 23 Lachlan // Jun 25, 2016 at 7:07 am

    600 off the Dow ha ha ha

  • 24 Stillgotshoeson // Jun 25, 2016 at 3:37 pm

    I did not think the Brexit would get up to be honest.

    Will Spain, Greece, Italy, Portugal and even Germany want out now?

    As for my asx market sell off. I am tending to agree with Chris in his U.S. Market: Sell Off Coming! article.

    6 to 18 months. A muddle through 2016 and a shocker 2017 was my train of thought. Brexit has thrown a cat among the pigeons.

  • 25 Biker // Jun 26, 2016 at 6:39 pm

    Interesting spin!:

    http://www.perthnow.com.au/news/western-australia/brexit-premier-colin-barnett-says-britains-eu-exit-is-good-news-for-was-economy/news-story/f9b4b7c7c516ea3e3e8863cb5077de42?utm_source=Perth%20Now&utm_medium=email&utm_campaign=editorial&net_sub_uid=5159065&nk=a1762723350c83fa9b90733422d817aa-1466933860

  • 26 Greg Atkinson // Jun 27, 2016 at 9:24 am

    Ah the Brexit saga has hit the markets and my guess is that markets have over-reacted. Nobody knows what form the UK exit from the EU will take and yet many investors have headed for the exits, gold is up and oil is down. This is the sort of short-term chaos that makes investing interesting! Personally I see no reason to be a seller and will be looking at over-sold blue-chips stocks this week.

  • 27 Lachlan // Jun 27, 2016 at 1:26 pm

    Me too Greg.

    Gold has hit it’s old high in AUDs and usd has blasted into the middle of it’s old range so could be volatility either way.

    Send the fair ladies, Biker. Sweden deutschland and swissy too. Our sunny beaches are waiting ๐Ÿ™‚

  • 28 Greg Atkinson // Jun 30, 2016 at 7:51 am

    Lachlan it looks like the markets are bouncing back somewhat now. Oil is also edging back towards $50 despite the predictions by some earlier this year that it would stay around $20 USD a barrel.

  • 29 Lachlan // Jul 1, 2016 at 6:14 am

    Yes Greg and the dow has recovered back to where it began pre-brexit. Some volatility in oil but there but no implosions. I am hoping for another downdraft in energy sometime and opportunity to buy in. It could take a while if at all though. Silver often sells off hard into economic weakness but its made significant gains off Brexit. We might have to wait for a different catastrophe to buy bluechips Greg….luckily there seems to be one every few weeks eh?

  • 30 Senator13 // Jul 5, 2016 at 7:02 pm

    What is everyons thoughts on the election and possible market impacts?

  • 31 Stillgotshoeson // Jul 6, 2016 at 12:36 pm

    Long time no see Senator13. Welcome back.

    Not much impact I believe. More impact on the dollar likely I believe.

    His superannuation changes hit such a small percentage of voters that he will get away with it.

    Other changes he originally flagged created quite a stir in the voting population that he back peddled on them of made soothing changes to not upset the masses. Shows me he is more about trying to stay in power than make any radical changes.

    Mining has come off the boil, unemployment rate whilst looking good at first glance, shows a marked increase in part time jobs and a decrease in full time jobs the last 11 months. Factor that in with wage rises below the long term average. Recent retail spend has been poor. That is going to weigh on the economy more than the Government.

    RBA quite likely to cut rates in the near term.

    Shining light has been AUD Gold. New high touched and higher prices to come with current global economic woes.

  • 32 Lachlan // Jul 7, 2016 at 6:10 am

    I can only make a general statement Senator because I am not so well informed. I sense things are deadly quiet compared to the norm, my immediate environment being regional town and mining business (which is quiet but more confident about 2017). Asset prices (real estate)are very slowly deflating here albeit a little quicker of late and some businesses are slowly giving out, it’s gradual. I don’t think the election really made that happen, though some people seem to be correlating the two. I doubt that the current national political reality will have much effect on the greater national and global economic processes that are driving things. If someone announces a major national restructure I will change my mind. Otherwise I think Aus will just go through whatever everyone else is destined to go through albeit with a very encouraging background of fundamental factors.

  • 33 Lachlan // Jul 7, 2016 at 6:17 am

    Shoes I just took a wee bit of profit on SAR to invest in a quieter unnoticed metals play which looks like a take-over target. Otherwise I think SAR has a bright future.

  • 34 Stillgotshoeson // Jul 7, 2016 at 11:32 am

    I’m still holding SAR. I think it has approached fair value based on current metrics. Have considered off loading them, or at least a 3rd. Return capital and free play the rest.

    Quite possible SAR may become a dividend payer within 12 months.
    SAR has nearly doubled since I mentioned it back in FEB.
    Around 10 cents shy of my up $1 by year end call.

  • 35 Greg Atkinson // Jul 7, 2016 at 2:06 pm

    Regarding the election result (or lack of one) I’d say that this will have some negative impact on the market but that will be far outweighed by what happens with the global markets.

    I’m guessing at this stage that the finance/bans stocks will struggle for a while due to domestics issue but the mining/commodities stocks will get a boost if commodities prices rise from here.

    As for as the ASX 200 this probably means the banks and miners will cancel each other out and that the index will just keep moving sideways.

    It also seems it’s going to be hard to get the corporate tax cuts through the Senate but maybe that was never priced into stocks anyway.

  • 36 Lachlan // Jul 7, 2016 at 2:58 pm

    Shoes, I’m still holding the majority of SAR and feel the sector outlook is very good. I had large gains so sold a small portion which is what I meant by “wee bit of profit”. Had the same idea about the possibility of dividends although for divis I am mainly looking in other areas. I think SAR look good for longer term holding and with potential upside in metal prices yet. I sat right through the final flush out (lets hope) of goldies (mostly small caps) and bought the bottom again as well, which has since been very rewarding, although I am holding for outsize moves as part of my strategy….which would otherwise fail since it involves diverse holdings, long term for better or worse ie sucking up a few outsize losses.

  • 37 Lachlan // Jul 7, 2016 at 3:11 pm

    “As for as the ASX 200 this probably means the banks and miners will cancel each other out and that the index will just keep moving sideways”
    Greg, yeah yeah yeah… I have been wondering why financial/share spruikers keep talking up the end of everything and a big crash when in fact commods have already had a big crash which was buffered inside the ASX200 by gains in other areas like banks. Some people may get to the end of a buying period and have nothing to show because they were waiting for everything to die on the same day. Well at least it’s possible, I could be wrong and maybe everything will crash simultaneously at some stage. I have something to show just in case my “knowledge” was insufficient anyhow.

  • 38 Lachlan // Jul 19, 2016 at 6:29 am

    I’m hoping to see crude hit 42 soon Greg. Waiting for a touch more weakness to hit a buy on an aussie oiler.
    The dow has popped its new high of course, not that I’d be buying it. It might just keep muddling around. Maybe we’re entering a period of commodity strength/financials weakness….which might amount to more grinding action looking from the longer term perspective. So no big, sustained breaks either up or down which is the sought of inference we get from financial columns every day. Always looking for the big moves; drama sells eh. Have been looking for entry into other areas like agriculture but not sure what to do there yet. More study needed.

  • 39 Greg Atkinson // Jul 21, 2016 at 8:21 am

    It certainly seems as though the markets have forgotten about the Brexit doomsday scenarios. The ASX All Ords/ASX 200 have certainly put that bump in the road behind them and are now making a run towards 5600. I’m still sticking with oil, BHP & RIO as long term plays.

  • 40 Lachlan // Jul 23, 2016 at 6:00 am

    Goodness me, lets try again.The sort of inference financial columns make is for radical moves. Every second week there’s going to be a major boom or an apocalypse. In oil I have WOR, STO, BPT and a little CVN… who are messing about with Quadrant on the north west shelf.

  • 41 Lachlan // Aug 2, 2016 at 11:02 am

    Bought more oilers today Greg; some decent discounts going. Nigeria wants to allow opec to flood more, hmm really,…whatever, bring it on baby!

  • 42 Greg Atkinson // Jan 2, 2017 at 3:16 pm

    Well it looks like the ASX 200 finished the year pretty close there were I predicted it would back in January 2016. I also did okay with the forecast for the oil price. Now I just have to work out what might happen in 2017 ๐Ÿ™‚

  • 43 Biker // Jan 2, 2017 at 9:23 pm

    Good luck with _that_ augean task, Greg!

    Yes, you were almost spot on. Interesting that you were halfway between the most bullish and bearish economists.

    Happy New Year to all shareswatchers!

  • 44 Greg Atkinson // Jan 3, 2017 at 8:21 am

    Biker I think going between the bulls and bears probably makes sense most years ๐Ÿ™‚ Happy New Year!

  • 45 Biker // Jan 3, 2017 at 2:22 pm

    Have to agree, Greg.

    I think you made your prediction a little _before_ the experts made their guesstimations… which does your own recent accuracy no harm(!)

  • 46 Lachlan // Jan 3, 2017 at 9:19 pm

    Well done Greg. Let us know where you want us to post our 2017 predictions. I guess none of us have predicted anything too radical really, some of my posts above mentioned no big, sustained breaks. However, at some stage that will change I guess and we may all be wrong if we keep on in the same vein. Don’t ask me though. I’m very interested to see what the indispensables latest saviour will actually do in office.

  • 47 Greg Atkinson // Jan 4, 2017 at 10:16 am

    I will post a forecast for 2017 in a week or so then everyone else can add theirs as comments. Unlike the “experts” I leave my forecast unchanged for the entire year and live with the outcome. Many “experts” have a rolling forecast and their update it so often it’s hard for them to be wrong ๐Ÿ™‚

  • 48 Lachlan // Jan 4, 2017 at 7:55 pm

    And yet those experts are wrong anyhow Greg, in absolute terms and no matter what they’ve subsequently said. For my own, whatever bets I make for the yearly index remain as valid on the last day of the year as they are on the first day. If my bet is off by 400 points, then it is off by 400 points. Nothing at all can change it.

    “Good luck with _that_ augean task, Greg!”

    I concur Biker. I feel I have little way of forming a yearly prediction now, let alone a monthly prediction, right now. What will Trump do vs his rhetoric? There’s so many potential international moves of great relevance, who can predict? I will put on my thinking cap though and see how good I am. On a slightly different issue I am “hoping” stocks go up, a lot. As for property which I will want to buy…I have been pondering ways in which prices could move up in the regional areas of interest…I don’t want them to right now of course. In any event if they did rise it may not be a big deal altogether. My mother is in a very populated place on the sunny coast and houses in her area are only lasting a week till sold. I hope the buyers don’t come out to the frontier.

  • 49 Biker // Jan 9, 2017 at 1:28 pm

    In fact very few experts got it right. The continuum ranged from around 4800 to 6100.

    At least two BS events, Brexit and Trump, no doubt affected outcomes… and the task of predicting this year’s ASX is beyond me, Lachlan. I think I was at least 400 points off last year… .

    Regional property on the coast is cheap right now. I’d be buying, but Goldilocks gives that short leash a good yank* every time I suggest even looking. * Nope, she’s Canadian… .

  • 50 Biker // Jan 12, 2017 at 7:59 am

    …and further to that theme (BS events):

    http://www.abc.net.au/news/2017-01-09/saxo-bank-outrageous-predictions-2017/8171084

  • 51 Lachlan // Jan 14, 2017 at 12:07 am

    I will be working off the premises of rising rates and inflation this year Biker. Possibly not at BS levels though. It has become apparent that certain nations can deficit spend a lot and still keep a some control on inflation. That’s “some”.
    Trump has signaled massive fiscal expansion and the fed did manage finally to make two rate rises. So I will assume rising rates from here. Australia has had hot real estate in a few cities and China’s real estate was hot last year. One could assume that will remain the trend or use it to predict a cooling post speculation. I’m not sure. I am more worried about property assets rising in the next few years than going down. I do think the Oz government will borrow and spend a fair bit. Our terms of trade are better but may not improve at the same rate this year. Markets may have priced in a lot already. I will probably predict a similar market gain again this year. A rise of modest proportions.

  • 52 Biker // Jan 15, 2017 at 7:48 am

    Interest rate hikes are certainly possible, Lachlan. Discussing the pros and cons of annuities with an FA recently, he remarked on that downside. Mind you, we were discussing a ten-year annuity… .

    With both our sons heavily invested in ETFs, I’m a little concerned by the possibility of a trumplicated recession, once he’s POTUS. That prospect has reduced our enthusiasm for international shares, but the ASX might be even more affected by any trade war between the US and China.

    Usually an optimist, I’m remaining a little pessimistic in 2017. That didn’t work all that well for me in 2016, but I have this nagging feeling I experienced way back in ’05/’06. May be simply an age-related phenomenon… but it’s definitely clouding my/our investment judgement!~

  • 53 Biker // Jan 20, 2017 at 10:10 pm

    Predictions? Clever, humorous piece here:
    http://www.watoday.com.au/money/investing/whats-your-big-investment-idea-for-2017-20161214-gtb5wd.html

  • 54 Lachlan // Jan 21, 2017 at 5:39 am

    I’m not so sure that rates will begin their rise here in Australia this very year Biker. I feel a degree of certainty that the trend has changed at the fed level. Trumps announcement to spend following the two rises has given me cause to that conclusion. I assume it is possible then that a rate rise could occur here this year but more so the next. It’s a little more complicated here from my perspective because of commodity trends being pertinent. The chart trend for rates here is still down and housing remains an important plank. The RBA says they can still drop more if need be. I will be watching to see how the Oz gov goes with spending fresh money. In any event I think it’s time to start thinking differently about inflation. I expect some to filter through at some stage soon.

  • 55 Biker // Jan 21, 2017 at 8:42 am

    Tend to agree, Lachlan, although all four major Aussie banks have already raised interest rates for property investors.

    I think Padley was being facetious suggesting iron ore could go to $100 this year… but stranger things have happened… and recently!

    Housing? As we know, markets across all states vary widely. In one of our own key locations, hellzapoppin!~ In the other, rents _and_ prices are gradually falling. Certainly provides us with another window to diversification advantages… . ๐Ÿ˜‰

  • 56 Lachlan // Jan 22, 2017 at 9:48 am

    Good point on the rates Biker. They are quiet on the owner rates as best I can see? You would know better than I.
    I was looking for an XJO prediction about 6000 again which would have been a modest gain from last years 5665 finish. Since then I have noticed a lot of pundits heading for the same 6000 mark…so I have re-examined things. I’m now looking for a more bullish prediction again. Arghh…crowd aversion.

  • 57 Biker // Jan 29, 2017 at 9:32 pm

    I’m not sure what’s happening, Lachlan. With the DOW at record heights… and my International Shares in Super making real money… I don’t believe the party can last forever… .

    My pessimistic voice chants “Munitions and Nukes… and Shelters…” while the more optimistic voice counsels “Make a nice cuppa tea, take a Bex and lie down…” I take the middle ground and take a three-day ride with my seniors’ motorcycle club.

    Globally, it all reminds me of that moment, back in the early 1950s, when I found a letter written by my father’s Belgian student penfriend around 1937: ” I do hope Mr Hitler leaves us alone… .” Amen.

  • 58 Lachlan // Feb 1, 2017 at 5:12 am

    Biker I think that people like ourselves who follow markets may have more justification for our conclusions however it cant stop us from being wrong quite a bit. I have listened to learned and articulate people around markets who often have diametrically opposed views. However I appreciate them because they bother to try and understand while people who act out of ignorance are sometimes just being lazy. Sometimes it can just be an unrealised ability to think and improve.
    On the worrying side Mr Trump is stirring things up in many quarters and the democrats are outdoing themselves to make sure this all ends badly. I think your negative feelings are completely rational. I share them too. Yet as you eluded for yourself, I’ve decided to overlook them and get on with things. If things turn sour I won’t go into denial. I will just deal with them at the time.

  • 59 Lachlan // Feb 2, 2017 at 5:15 am

    As far as the violence goes, I never saw Trump as a signal for a truly new foreign policy which some people unjustifiably claimed during the campaign. Even more worryingly, events now seem to be indicating a heightened probability of domestic trouble. Maybe much of it is blown up out of proportion however that does not let me conclude that all will stay quiet on the western front. And of course the market reactions even to small happenings could be dramatic. Anyhow I will hope for the best.

  • 60 Biker // Feb 2, 2017 at 10:01 pm

    Lachlan: “…the market reactions even to small happenings could be dramatic…” Yes… and his utterances may mean volatility for some time. We may assume that it wasn’t all rhetoric!

    I’m reading a great explanation right now: Hillbilly Elegy. It has helped me understand what’s happening… and why.

    Both our sons now have businesses operating in North America. We’re a little saddened that they’ve chosen to base their companies overseas and are employing Americans and Canadians (rather than Aussies) but the opportunities in the US and Canada seem limitless. Both their business models seem radical (to my mind) but they were financially independent at 30… and seem to know exactly what they’re doing!~

  • 61 Biker // Feb 6, 2017 at 9:02 pm

    Biker: “My pessimistic voice chants โ€œMunitions and Nukesโ€ฆ and Sheltersโ€ฆโ€ … and litigation(!)

  • 62 Lachlan // Feb 9, 2017 at 7:52 pm

    Biker, a friend and business associate of mine has taken risks which outweigh what I was prepared to take. Although our situations vary in some materially important ways he has nonetheless done exceedingly well. He has substantial property ownership now as a result and could walk away financially independent. In any case I believe I’ve done the correct thing. I’ve done what I believe was right and have managed my risk according to my own preferences. I continue to keep debt levels low and invest in business assets that have long term value. I make enough that all things being equal I will obtain the things I want in an acceptable time-frame. I feel lucky for sure. I keep trying to think of new businesses I could undertake which suit me (primary production) and which are financially rewarding. Always looking ahead eh. However, it is not so easy there these days. I think my son will do well in his technology field because that is broadly relevant and because he applies himself.

    The litigation. That’s a good call imo. I strongly agree!
    As for the hillbillies. I have not read the book you cited, I did read a review. However in my own world view, technology and the changes it drives are a common premise in many arguments I’d make yet few people I meet or who’s letters I read online tend to draw on that anywhere near as much as I would. Things do change very quickly these days. Individuals change slowly by comparison. I take the modern road where I can these days. I want to see where it leads and I want to succeed materially, I have no hang ups about that. Nonetheless I feel the conflicts deep within, conflicts about the type of life we are leading and the changes in that life…are they whats really best for people? It’s a struggle with my conditioning then, in part. Most/all people would I am certain. Not everyone dreams of being a cyborg just yet ๐Ÿ™‚

  • 63 Lachlan // Feb 9, 2017 at 7:56 pm

    Please add commas where appropriate sorry. Always rushing. A for the hang ups, I have no hang ups about succeeding materially. Many people are conflicted about material success, money etc …I find. I am however unsure about where technology will eventually take us.

  • 64 Biker // Feb 10, 2017 at 7:06 am

    I share your concerns re technology, Lachlan. Is there a tipping point, I wonder?*

    I find I derive the greatest pleasure from growing more of our own food, these days. Preventing forest animals from consuming it before we do is a challenge… .

    Your goals are achievable. Go for it.

    * Turning 70 in a matter of daze, I’ve relented and bought an eBike. Will still keep (and ride) my mountain bike, but much longer distance cycling will now be possible… .

  • 65 Lachlan // Feb 14, 2017 at 7:48 pm

    Happy birthday Biker!
    Those ebikes are interesting. My son has tried telling me about them several times now you mention it. There is an asx company, Vmoto, having a go there. If I lived on the coast or owned a place there I would buy one for sure. Loved bikes as a younger fella. Will keep working on that one. In a similar vein I was about to purchase kayaks for myself and the kids so we can exercise and explore together. Takes a little over two hours from here to the nearest beach…which we do quite a bit. Lots of estuaries and bays. One of my brothers just moved into a place on the water, a well known but less populated place on the southern end of the barrier. He still owns cattle properties. I think his life is well balanced that way.

  • 66 Lachlan // Feb 14, 2017 at 7:51 pm

    “tipping point”
    I guess we have controlled the spread of nukes, somewhat. Lets hope the killer robots don’t get so far

  • 67 Biker // Feb 14, 2017 at 9:06 pm

    Thanks for the birthday happies, Lachlan. Surprised I’ve made it so far. Have lost a lot of younger friends.

    Really impressed with the Hobie kayak range, Lachlan… particularly the fishing models. Next year, we may do an around-Oz trip… and the missus has suggested we car-top either a two-seater, or two Hobies.

    We took a couple out on the Swan River. They’re so stable you can stand up in them. Now that’s another technology I like… .

    How about iron ore prices??!!~

  • 68 Lachlan // Feb 15, 2017 at 5:07 am

    I missed out on the iron rush, Biker. I was so wrapped up in cheap energy I didn’t spare a thought for iron ore.

Leave a Comment

*


 


This site is not intended to act as any form of financial or investment advice.  © 2008–2017 Shareswatch Australia — DisclaimerCutline by Chris Pearson

 

The information contained in this website is for general information purposes only. Whilst we endeavour to keep the information up-to-date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk. Please seek professional advice before making any investments.