What will the market look like in 10 years time?

[mick2006]

Was just reading an article from the melbourne age about what stocks would be good to hold now until 2017.

I believe stocks such as :

UNI (medical supplies)
VCR (third generation artificial heart)
WPL (the price of oil is going up)
WOW (everybody has to eat)
PBL (agree with the article in regards to gambling in China)
PDN (will benefit from the consolidation of the uranium sector)

There are so many more that I could name but 6 is a good start.

Would be interested to hear peoples thoughts and what they are planning to hold longer term.

Below is a copy of the article.

2017? Buy now! Here are the tips for 10 years' time
Marcus Padley
June 16, 2007

BUFFETT reckons he wouldn't care if the sharemarket closed for 10 years. OK, done. As of next Friday they are going to close the sharemarket for 10 years. You have a week to get set. What are you going to buy? Here's my guess.

Resources — BHP, Rio, Fortescue, Gindalbie Metals, Woodside — let's go with the flow. In the next 10 years the main driver will be the industrialisation of China and the Chinese will become very active investors, globally.

Chinese money will soon smack into equity markets. They will initially invest in the companies causing them the most trouble — they are fed up with being bent over by Australians, Brazilians and Americans.

BHP and Rio? Gone (if they haven't already gone). At huge premiums that imply a $300 price for Fortescue. But Andrew Forrest will have delivered Fortescue to the Chinese already, for $150. It will be another MIM, sold too cheap.

But Andrew won't care. He'll be Australia's richest man.

Gindalbie Metals becomes the largest resources stock in the Australian market and, with its new-found friends in China, it won't last forever either. Add a splash of Woodside.

We'd like to buy a host of other resources stocks but we only have room for a few. Still, against a 22 per cent sector weighting, I reckon we might plunk 50 per cent of the fund into the sector.

Mining services companies follow. If the resources sector makes money, then so will these. Let's have a few Worley Parsons and some of those Boart Longyear. I know everyone bagged them on the float but they just went into the ASX 200 and will be climbing, not falling.

Contractors and developers — Leighton Holdings is one of the few companies with the scale to operate in Asia — will flourish. Downer EDI and United Group are others.

Investment banks? Presumably Macquarie Bank and Babcock & Brown will also one day find the commercial confidence to boldly rather than tentatively step into Asia. They can find investors for anything, especially roads, utilities, power and infrastructure projects. The scale of their Asian projects will leave Australia and US filed under "chicken feed".

Banks are the real boom for Australia beyond Chinese industrialisation. After building everything, the next boom will be servicing the Chinese population. First cab off the rank will be banks. The moment the banks move into China, sell them. They will get flogged if they take their ambitions beyond the cosy Australian high-street monopoly they enjoy.
That's why we invest in them. ANZ has already learned its lesson abroad so we pick it as our preferred exposure to the Australian high street. Long may it continue. We really don't want exposure to the Chinese subprime market collapse of 2015.

Wealth management won't resist getting involved in Asia and they are going to find it hard not to succeed. AXA Asia Pacific will set the example. Let's also slot in a few wealth management and sharemarket companies: Perpetual Trustees, AMP, ASX, Computershare.

Property trusts? Westfield Holdings has 44 centres in Australia, 11 in New Zealand, 59 in the US and seven in Britain. It seems to be missing something. Westfield Beijingland and Westfield Shanghailand, perhaps. A dash of those.

Packer? Forgot to mention. My first dollar will go into PBL Gaming. Take a nation of 1.3 billion people who believe in luck, add Packer and stand back. Include a few Cochlear — it might just eradicate deafness — and have a few Brambles as well.

Of course, a few other things will change in 10 years:

■Disappeared: The ability to write, personal tax rates, Japanese in primary schools.

■New: Nuclear power, water futures, Google everything, Mandarin in primary schools.

■Multiplied tenfold: Everything uranium, petrol prices, bicycle manufacture, the super fund industry, the Future Fund, Andrew Forrest's Windsor knot, Perth

 

[Sean K]

FWIW here's mine:

 

[chops_a_must]

Surprised no-one has mentioned eco-tech/ enviro-tech type stocks, nor the blue chip biotechs in COH and CSL.

Although with the enviro-tech stocks, you know one or more might become huge, but picking that one is akin to winning the lottery.

Energy is going to become increasingly important over the next ten years, and with Kennas, I like ORG (hopefully will add them to the portfolio sometime this year), but I can also envisage a company like AOE becoming one of the most important plays in Oz and SE Asia, as they are positioning themselves to become a goliath...

Cheers.

 

[Kauri]

IVC... baby boomers will ensure this will be a growth industry in near-term
PDN... like it or not we will be a nuclear powered world
WOW.. growth by expanding into more non-food divisions and new stores
PBL..... asia and casinos and/or other gaming-betting facilities.i.e Betfair in asia..

 

[billhill]

Agree with what has been said about energy. In particular i see gas doing very well so i like woodside and origin. The new PBL gaming spinoff i like as well. 3 casinos in macau with a growing population of wealthy gamblers. Can't really go wrong on that. Then finally i'm a big fan of companies servicing healthcare in china. When you think they've got to catch up to the western world, thats alot of money to be spent (remember 1 billion people). My favorite for this is IBA health.

 

[prawn_86]

Ramsay Health - ageing population etc etc

Eden Energy (EDE) - technology that is way ahead of its time and within 10 year hopefully the market would have woken up to it. A stock to buy to hold and pass onto the grandkids imo. the have their fingers in all sorts of pies, geothermal, hydrogen fuel, coal bed methane(or something).

ANZ - kennas has already mentioned but i agree.

 

[the barry]

acclaim exploration - those long overdue drill results should almost be ready.

 

[nizar]

acclaim exploration - those long overdue drill results should almost be ready.

LOL!
I kid you not when i saw your post i thought you were mention BMN!

Well if you like high risk.high return plays, i guess they dont come much better than AEX. By 2017 they will either by 0 or $1+.

 

[Smurf1976]

Energy is the area where fortunes will be made and lost over the coming years IMO.

Don't forget that with ethanol now being a significant industry, the food price is tied directly to the oil price.

Also realise that, long term, the gas price is tied to the oil price as the industry matures, forms cartels and undergoes increasing geographic concentration.

Now realise that the oil discovery rate is (1) falling and (2) well below the rate of consumption (which is rising).

It's hard to see how all of that wouldn't be outright bullish for oil, gas, wheat, corn, sugar etc.

To a lesser extent it's bullish also for uranium, coal and renewable electricity sources although transport energy is where the biggest action is set to be IMO given that coal and uranium are relatively more abundant than oil and gas (a damn good reason not to be using oil or gas for electricity - cost will be another one but that will be learnt the hard way by many).

Climate change will be largely a forgotten issue once peak oil hits IMO. If it's real (and I strongly suspect it is) then in practice it's going to be a case of adaptation unless there's some truly massive shock to the system that forces China, India etc to act.

Actually, that's another point. We've seen the peak of the importance of the US as a superpower IMO. No offence intended to any Americans reading this, but I just think that other countries have massively better positioned themselves for the future than the US has and that relative decline is now inevitable.

 

[constable]

acclaim exploration - those long overdue drill results should almost be ready.

By far and away the funniest thing i ve read on this forum..... by that stage their lease will be under water!

 

[Sean K]

Actually, that's another point. We've seen the peak of the importance of the US as a superpower IMO. No offence intended to any Americans reading this, but I just think that other countries have massively better positioned themselves for the future than the US has and that relative decline is now inevitable.

It seems inevitable that the Yuan will become the international currency in the future, unless near term conflict sorts it out otherwise. Not sure about 10 years, but inevitable. (unless there's an 'international currency' developed, not related to any country, which will be the end result of globalisation)

Anyone who comes up with, or is working on, a cheap alternative energy source should be on the list, but the oil may last more than another 10 years. Unless some incredible elephant field materialises in Antarctica.

 

[ormond]

one stock that could be huge in 10 yrs is clean seas tuna.will there be any wild fish left by then?judgeing by my last couple of fishing trips-probaly not!

 

[Smurf1976]

Anyone who comes up with, or is working on, a cheap alternative energy source should be on the list, but the oil may last more than another 10 years. Unless some incredible elephant field materialises in Antarctica.

The oil doesn't need to run out. It just needs to get to a point where oil production can't be cheaply expanded to keep pace with demand growth and then you have the financial oppotunities.

As for elephant fields in Antarctica, I think the greatest casualty of a peaking in oil production will be the environment simply because we'll end up using anything and everything that works. And contrary to popular belief, conventional crude oil extraction and use isn't too bad envionmentally when compared to the tar sands, shale, coal liquefaction, industrial scale biomass and nuclear power alternatives we're likely to end up using. And of course drilling in Antarctica for the remaining light sweet crude (assuming there is some there).

 

[macca]

As far as oil price goes, I can't see it going below the current prices, maybe down to US$60 occasionally to test support.

I have read that at that price all the oil sands producers are a viable proposition, below that not worth the risk.

So if the price falls then the market will believe that oil sand producers will fail and we are then past peak oil, so up goes the price.

 

[prawn_86]

one stock that could be huge in 10 yrs is clean seas tuna.will there be any wild fish left by then?judgeing by my last couple of fishing trips-probaly not!

i am not heaps up to date with all the info, but appaerntly it puts more strain on the aquatic environment to farm fish like tuna, than it does to catch them.
this is due to the fact that the tunas bait must be caught from somewhere, and if it is alos bred, then its bait must be caught etc etc.

not saying it doesnt have potentail, there arte just a lot of things the aquaculture industry need to sort out if they are going to have real long term sustainability.

 

[dubiousinfo]

Maybe in 10 years BYR will have issued an announcement and be out of the trading halt. Reminds me of JMS - great prospects, sh*t management.

 

[divs4ever]

Was just reading an article from the melbourne age about what stocks would be good to hold now until 2017.

I believe stocks such as :

UNI (medical supplies)
VCR (third generation artificial heart)
WPL (the price of oil is going up)
WOW (everybody has to eat)
PBL (agree with the article in regards to gambling in China)
PDN (will benefit from the consolidation of the uranium sector)

There are so many more that I could name but 6 is a good start.

Would be interested to hear peoples thoughts and what they are planning to hold longer term.

Below is a copy of the article.

yes i know this is 2021 , but isn't hindsight educational especially if you go back to the Padley's predictions ( i am terrible at predictions )

 

[basilio]

yes i know this is 2021 , but isn't hindsight educational especially if you go back to the Padley's predictions ( i am terrible at predictions )

It is interesting to see what has been predicted and the outcomes .

Marcus Padley does shoot off in a score of directions so inevitably some predictions will prove successful. But likewise others have fallen over badly. I checked out most of his predictions for the ten years from June 2007 to June 2017 as well as the current prices.
Worth noting that most of them have fallen some catastrophically. (Who invested in Babcock and Brown ?)

Company​	​	June 2007​	June 2017​	July 2021​
Worley Pasons​	WOR​	$31.99​	$10.42​	$11.25​
Leighton Holdings​	CIM​	$40.16​	$39.20​	$21.03​
Boart Longer​	BLY​	$5,397.61 !!​	$9.00​	31c​
Downer EDI​	DOW​	$6.47​	$6.03​	$5.38​
Babcock and Brown​	BBB​	$34​	Liquidated​	​
ANZ​	ANZ​	$28.99​	$23.44​	$27.69​
​	ASX​	$48.20​	52.79​	$77.67​
AMP limited​	AMP​	$10.12​	$5.13​	$1.09​
Computer Shares​	CPU​	$11.18​	$9.79​	$16.08​
PBL​	​	Split up​	​	​
Brambles​	BXB​	$11.39​	$10.16​	$11.62​
Perpetual trustees​	PPT​	$78.51​	$55.17​	$38.40​
AXA​	AXA​	​	​	​
Cochlear​	COH​	$61​	$159.54​	$246.07​

There were a couple of interesting stories about Babcock and Brown. They were one of the hottest stocks on the ASX in 2007 - just before they crashed in a pile of debt and dodgy dealings.

https://www.afr.com/street-talk/street-talk-20070816-jkt91 Babcock and Brown

https://www.afr.com/companies/finan...he-once-mighty-babcock--brown-20180406-h0yfdj

I also havn't worked out how Boart Longer managed to drop from $5397 to 30c today. I suspect they had to consolidate the shares (edit) to enable some actual trading. But still..

Why the Boart Longyear (ASX:BLY) share price is rocketing 50% today

The Boart Longyear (ASX: BLY) share price has been one of the best performers on the ASX today, rising by more than 50%. Here's why.

www.fool.com.au

 

[divs4ever]

really puts the strain on the 'buy and hold ( 'blue chips' ) story , without accounting for the inflation over that time

i think you have strengthened my belief in staying vigilant over the portfolio

cheers

the BLY story brings tears to my eyes and i only held them between April 2013 to October 2014 ( buying from 95c down to 10c )

that 10c has been massively consolidated since so is no comparison to the current price

 

[basilio]

really puts the strain on the 'buy and hold ( 'blue chips' ) story , without accounting for the inflation over that time

i think you have strengthened my belief in staying vigilant over the portfolio

cheers

the BLY story brings tears to my eyes and i only held them between April 2013 to October 2014 ( buying from 95c down to 10c )

that 10c has been massively consolidated since so is no comparison to the current price

The "Buy and Hold" story was and is total and complete BS. Wealth promoters point to the relentless rise of Share Indexes to promise increasing returns. But these only reflect the shares going up not the ones that have fallen.

2007 was a high point in world stock markets. Irrational exuberance waxed across the board. Every promotor and spiv in town was making a mint.

Much like 2021 really.