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Add to that Australia hasnt had a massive run since the GFC, now we have a major retraction, I cant see a better game in town, as you say.
Add to that Australia hasnt had a massive run since the GFC, now we have a major retraction, I cant see a better game in town, as you say.Money is cheap and getting cheaper, stimulus on the way, the market is the only place offering decent yields other than risky (ratesetter type) credit, growth is still the only game in town, at some point the pile in begins in spite of COVID19, infection rates in China have well and truly flattened, all the virus growth now is ex China.
Money is cheap and getting cheaper, stimulus on the way, the market is the only place offering decent yields other than risky (ratesetter type) credit, growth is still the only game in town
Add to that Australia hasnt had a massive run since the GFC, now we have a major retraction, I cant see a better game in town, as you say.
Oil yes copper not yetBuy oil and copper producers?
And not tomorrow at open let it time to go lower this weekOil yes copper not yet
Hmmm yeah, pretty unique...
View attachment 101114
Was Japan unique, or just first? ZIRP, QE, POMO, these are all terms Japan was using in the 90s.
That is all true, but regarding Japan, they import everything from energy to raw materials, had a massive run up post 1960 with making a quality product at a reasonable price, this was then reflected in their living standard and then along came China and SE Asia then they faced the same problem as the U.S.I always find it funny when people say this kind of thing.
In Japan money was "cheap and getting cheaper" in the 90s, stimulus of every type attempted, with equities being the only place offering "decent yields", none of that saved the equity market there.
If money is so cheap and plentiful, why are CBs all over the world forever trying to gush even more? If the RBA setting rates at 1.5% for 5 years was cheap money while the Fed/ECB/PBoC have been doing all their stimulus, why are our GDP and inflation numbers keep getting worse?
It's almost as if none of that actually matters for future equity returns.
We did have a pretty massive run in total return terms, it just doesn't show up in the free charting tools because it got paid out as dividends rather than buybacks like in the US.
Is there really a perception that this drop is a "major retraction"? This is nothing, not even in comparison to other post GFC blips. We dropped more than this in 2018 and that was just a market tantrum!
That's the primary reason I don't think we've seen the bottom yet.This is nothing, not even in comparison to other post GFC blips. We dropped more than this in 2018 and that was just a market tantrum!
That is all true, but regarding Japan, they import everything from energy to raw materials, had a massive run up post 1960 with making a quality product at a reasonable price, this was then reflected in their living standard and then along came China and SE Asia then they faced the same problem as the U.S.
We on the other hand have copious amounts of energy, raw materials and a small population.
Also a massive overseas interest in living here, so there is plenty of money, yet to come into circulation. So IMO we are still in a growing phase as far as economic growth goes, for how long ?
But I personally think there is still plenty of steam left, time will tell, but I dont think this is going to be a GFC style fall.
Just my guess.
I agree with your points, but the market is emotionally driven, not driven by common sense.They import energy/raw materials and export a lot, they run a balance of trade surplus every year for a long time.
We have copious energy, raw materials and import everything, even our oil. Consistent deficit balance of trade.
I'm not sure what the point is, are you saying Japans economy suffered all this time because they consistently produce some of the worlds most valuable stuff?
Two points,
1. We are importing growth as you say, which keeps the raw GDP growing, but GDP per capita not so much, so we grow but nobody feels any benefit of it. As I heard a smart guy say about this, "well done Australia, too bad Australians."...
2. In terms of investment performance in assets like stocks, long duration, gold, that GDP is still growing matters much less than the rate of change of GDP growth (and inflation) has been slowing YoY and looks to continue to.
Who knows, this is what is so funny about having these conversations, you can't debunk economic tourist talking points like "cheap money, stimulus, blah" without people inferring you're saying the GFC 2 is on its way. That being said, it really just is the stock market which isn't acting GFC-ey, bonds, commodities, AUD, all are back there.
They import energy/raw materials and export a lot, they run a balance of trade surplus every year for a long time.
We have copious energy, raw materials and import everything, even our oil. Consistent deficit balance of trade.
I'm not sure what the point is, are you saying Japans economy suffered all this time because they consistently produce some of the worlds most valuable stuff?
Two points,
1. We are importing growth as you say, which keeps the raw GDP growing, but GDP per capita not so much, so we grow but nobody feels any benefit of it. As I heard a smart guy say about this, "well done Australia, too bad Australians."...
2. In terms of investment performance in assets like stocks, long duration, gold, that GDP is still growing matters much less than the rate of change of GDP growth (and inflation) has been slowing YoY and looks to continue to..
I am pretty sure that what you mean is Australia supplies .xxx..of China imports....Australia supplies 61 per cent of China's iron ore, 53 per cent of its coal and 23 per cent of its thermal coal.
I think a distinction needs to be made here between the "end of the world" sort of view versus that which fits into the "bottom is coming but we haven't seen it yet" sort of view.Everyone is bearish and with good reason(I am too). But should we be looking for the bull from left field?
That's the primary reason I don't think we've seen the bottom yet.
The market hasn't even entered a bear market whilst the impacts on the real economy are real and rapidly mounting.
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