Australian (ASX) Stock Market Forum

Battening down for the Recession

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Hi all

I'm new here, although not new to trading, and am interested in kicking around some strategies for recession trading. The last true recession (by my reckoning) was in the 1980's and I was only a whipper snapper then so have very little idea as to financial long term recession planning.

My thoughts so far are:
Consumer Discretionary - short
Consumer Staple - swings and roundabouts
Energy stocks - long
Renewable - long

Anyone care to put in their 2c?
 
Kohler's recent commentary in the Business Spectator "The United State's of Irrelevance" talks about the "de-coupling" of the US economy from the rest of the world, but Asia in particular. This should be read when considering strategy.
He refers to Rio Tinto's chief economist's assessment that a US fall into recession, and decline of $USD would impact China growth by less than a percentage point ; and even less than in the case of India.

The suggestion is that financial/investment flows will adapt towards economies with better investment prospects , and towards infrastructure etc in these growing economies that will continue to support commodities.

The US adjustment will be painful domestically due to the current import reliance and the high oil-price environment.
But is this the recession that the US had to have??? (or just Karma...some would say)
Remember the Keating J-curve effect. ie, the lower USD stimulates US exports/ discourages imports. This is underway...eg, sales of US manufactured vehicles in Canada are booming. Great also for those outside the US looking to stock up on arms & military hardware......
 
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