Where to invest in 2013?

[young-gun]

Just my opinion but the Yanks, Japanese and Europeans are printing money like crazy, all that money once the fear is over has to come rushing out pushing up inflation worldwide.

Invest in businesses that have pricing power and can ride it out.

I thought the same thing not so long ago. However the yanks have been printing for years now, and in HUGE amounts, and yet the ramifications have almost been non-existent. The Europeans would have to print trillions and trillions to offset their deflationary issues, and have the Japanese confirmed they are definitely going to embark on a similar path of printing?

I think that all this printing SHOULD cause inflation, but perhaps the deflation everyone is printing against is simply too strong for the time being, and it may be a decade or two before we start to see genuine growth take over.

You would think that 'somethings gotta give' at some point.

 

[McLovin]

Just my opinion but the Yanks, Japanese and Europeans are printing money like crazy, all that money once the fear is over has to come rushing out pushing up inflation worldwide.

Invest in businesses that have pricing power and can ride it out.

They'll just sell the long dated debt on their balance sheet soaking up the excess cash (and destroying it) they printed to buy the debt in the first place. At least that's why inflation isn't a problem, because there's an expectation that will happen.

 

[robusta]

They'll just sell the long dated debt on their balance sheet soaking up the excess cash (and destroying it) they printed to buy the debt in the first place. At least that's why inflation isn't a problem, because there's an expectation that will happen.

And when the bonds that are paying a negative real return are no longer popular where will that cash go?

 

[Bill M]

My guess is that when people start reallocating their super into the balanced or growth sectors then that money will head for the sharemarket and that may help sustain higher prices. However, for the conservative and older Australians I think that residential real estate will still be their first choice. There are a lot of people out there who will never touch the sharemarket again.

 

[kincella]

interesting...
some debt is good debt, (against an asset that increases over time, or with inflation, for eg; land)

other debt is bad debt (for example car loans, against a deflationary asset) cars decrease in value the moment you drive it out of the car yard

if you are expecting inflation, then if the debt is held against an asset that will gain in an inflationary period, then you are in the box seat....

the debt cannot be inflated....eg a loan of xxxx amount, remains at xxxx

it is the money that is paying off the loan that is deflating

but at the same time, the land value will inflate....

so some debt is good to hold, to hang onto during an inflationary period....

there are so many articles, about people avoiding debt, paying it down in the past 5 years, and now they are hoarding cash.....they will not keep hoarding, they will get tired and move soon....if they have not already
I suspect many have moved some of the cash back into assets of choice

the shenanigans and games in the stock market, would have driven a good many people away
they will not return, not unless and until, it becomes a more level playing field again...which is doubtful
so where will they park their cash...?

 

[Miner]

Cash under your bed.

gg

Hi GG
Greetings for a festive season and HNY.
Returning to thread as Joe said you need to support your recommendation so please provide more details.
Why under bed ? Have you provided disclaimer that provided there is no bed bugs, cockraches or white ants to eat the cash ??

 

[Garpal Gumnut]

Hi GG
Greetings for a festive season and HNY.
Returning to thread as Joe said you need to support your recommendation so please provide more details.
Why under bed ? Have you provided disclaimer that provided there is no bed bugs, cockraches or white ants to eat the cash ??

Thanks Miner, you are a gentleman probably, unless you are a lady, sorry you know what I mean. I have to be careful as the Canberra Handbags are setting me up for the first "Insult" test case when the DepNoIns is set up.

I would advise this young person to stay in cash.

In an above post

https://www.aussiestockforums.com/forums/showthread.php?t=25894&p=742881&viewfull=1#post742881

I recommended to he or she, what to do, on that fine day next year, 2013, when the markets go to crap. Either on that day, or some time after will be the time to turn cash in to Australian shares. Then sit back and watch a wave three with oneself sitting upon it.

More importantly coming to your last point, I have no idea in what squalid conditions this young person lives or exists.

Empty dorito packs, nuts, condoms, KFC, male or female pollsters, or both, bed bugs, long lost AWU documents, the complete judicial decisions of Justice Rares, more bed bugs, cockroaches or white ants may all lurk in or under his bed.

Assuming the worst case scenario, that all of the above are present, I consulted my resident expert on all things to do with Australian Cash, a good friend at Securency and Note Printing Australia (NPA), presently expecting a term in the slammer for bribery. He assures me that our good Aussie notes are resistant to all of the above, and would survive.

As to whether under the mattress or in the bed is a root point, sorry moot point. Under I would suggest is safer. One never knows these days who is a crook and who is honest. Just look at NSW ICAC.

gg

 

[oldorman]

Yeah I think you need to play the charts just as you see them. Buy low, sell high will always be a good strategy with equities that have sound fundamentals behind them.

I'm also considering some govt bonds in case it all turns to poo.

GOLD hmm you know I still think the charts look top heavy and would like to see a 50% retracement off the OCT2008 lows. $1300 would be a great buy if it gets there. The thing is everyone is so pro gold that a massive crash is imminent before it takes off to new highs.......

And yeah under the mattress for when/if the banks don't open their doors one unsuspecting day .

 

[McLovin]

And when the bonds that are paying a negative real return are no longer popular where will that cash go?

Equities, commodities etc. The same places it's going now.

 

[tech/a]

Tech, you have mentioned your thoughts of fast raising inflation a couple of times now, any chance you could elaborate as to why? After all thigns are slowing down, and we haven't embarked on any printing or stimulus for some time now. What makes you think inflation is going to be an issue in the next 4-5 years I think you said?

If anything I would think that we are in for a small bout of deflation before anything like that will begin to occur.

This could have a thread of its own.
Im sure many of the fundies here would love to get stuck into this topic.


But here is my view.
I think its inevitable --- exactly when I cant be sure.
But for growth to re appear --- and one day it will--there will need to be inflation.

Inflation creates demand.
Wages rise
Employment rises
Spending rise
Businesses proper ( Im talking mild Inflation not Hyper)
More taxation is collected
Held debt decreases in value.
Held asset generally increases in value.

But like everything I think it will initially over shoot before being controlled.
It wont be a time to be holding cash as it will de value.
If you can handle the increased interest (I can see up to 12 % or so) on debt then it maybe worth holding property asset or trading the bull run on margin.
If you cant then now is the time to diminish debt.

 

[dombat]

It is the first and probably the last time I believe that you tech are wrong .... have you really considered the implications of the demographics? I can see outragous inflation in health, energy and food - but not traditional asset classes such as real estate - as you know japan printed and printed but still could not stop deflation - europe will certainly feel it and I just can't see inflation happening there beyond basic essentials for the next 25 years. The western world I believe will struggle with low growth and meagre returns for a long long time.

 

[tech/a]

It is the first and probably the last time I believe that you tech are wrong .... have you really considered the implications of the demographics? I can see outragous inflation in health, energy and food - but not traditional asset classes such as real estate - as you know japan printed and printed but still could not stop deflation - europe will certainly feel it and I just can't see inflation happening there beyond basic essentials for the next 25 years. The western world I believe will struggle with low growth and meagre returns for a long long time.

Look you could be right.

And if you are then we are in for some very tough times indeed.

 

[explod]

It is the first and probably the last time I believe that you tech are wrong .... have you really considered the implications of the demographics? I can see outragous inflation in health, energy and food - but not traditional asset classes such as real estate - as you know japan printed and printed but still could not stop deflation - europe will certainly feel it and I just can't see inflation happening there beyond basic essentials for the next 25 years. The western world I believe will struggle with low growth and meagre returns for a long long time.

Agree dombat, your view is what I see also.

At any time soon in my view the markets are going to take a belting that will make 2008 look like child's play.

If we look at the Dow over the last 15 years, each of the recoveries have been by some form of stimulus. That no longer seem to be working for the US and yes Japan the last 20 odd years is a good case in point too. In fact if someone would trot a chart out on the Dow there would be some support at 4000 but more likely to overshoot to 2000. Now just have a think of what that may do to all stocks, gold stocks with them. And it would happen US time before our markets open so the system here would jam almost before you could hit the sell button.

This is why I stepped right out of trading and all of my investment moneys are in physical silver (mostly coins) in the hand.

 

[young-gun]

Agree dombat, your view is what I see also.

At any time soon in my view the markets are going to take a belting that will make 2008 look like child's play.

If we look at the Dow over the last 15 years, each of the recoveries have been by some form of stimulus. That no longer seem to be working for the US and yes Japan the last 20 odd years is a good case in point too. In fact if someone would trot a chart out on the Dow there would be some support at 4000 but more likely to overshoot to 2000. Now just have a think of what that may do to all stocks, gold stocks with them. And it would happen US time before our markets open so the system here would jam almost before you could hit the sell button.

This is why I stepped right out of trading and all of my investment moneys are in physical silver (mostly coins) in the hand.

just out of curiosity explod, are you talking about limited edition type coins printed by the perth mint for example, or junk silver like 56 rounds or other types out of the US? Do you not buy bars at all?

I can understand why you are going coins, just surprised that they are(judging from above) the majority of silver you hold.

 

[explod]

just out of curiosity explod, are you talking about limited edition type coins printed by the perth mint for example, or junk silver like 56 rounds or other types out of the US? Do you not buy bars at all?

I can understand why you are going coins, just surprised that they are(judging from above) the majority of silver you hold.

I do have some bars one at 5 kilo. One ounce pure silver I like best, some eagles etc., but yes a good swath of 1966 rounds too. At the end of the day it is the silver content that counts for me so don't' buy Perth Mint stuff, walking the dealers has been my best way of accumulating closer to spot.

 

[Tyler Durden]

Bullet proof backpacks:

Elmar Uy thought his software was acting up when he first saw the huge jump in sales of bulletproof backpacks two weeks ago. He checked the figures and discovered the website's traffic had jumped tenfold.

Then he turned on CNN, and it made sense.

Following the fatal shootings of 20 children and six adults last week at an elementary school in Newtown, Connecticut, BulletBlocker said it is struggling to keep up with demand for its bulletproof backpacks for children.

"We sell 15 to 20 backpacks in a good week," said Uy, the company's vice president of sales. "Since the shooting, we've sold 50 to 100 per day."

http://www.theage.com.au/world/sales-of-bulletproof-school-bags-soar-20121224-2bul0.html

Can't seem to find an Australian company that does something similar though (I know gun control is not an issue in Australia, but it could easily export to USA).

 

[tech/a]

Bullet proof backpacks:



http://www.theage.com.au/world/sales-of-bulletproof-school-bags-soar-20121224-2bul0.html

Can't seem to find an Australian company that does something similar though (I know gun control is not an issue in Australia, but it could easily export to USA).

Thats great thinking
Ill be the Chinese have it covered

 

[PinguPingu]

I do have some bars one at 5 kilo. One ounce pure silver I like best, some eagles etc., but yes a good swath of 1966 rounds too. At the end of the day it is the silver content that counts for me so don't' buy Perth Mint stuff, walking the dealers has been my best way of accumulating closer to spot.

Family has been collecting some very nice silver coins over the generations, quite a few European mixes with some..err.. interesting German pieces, and some very old Swiss stuff. No idea on valuation but I don't think we could actually bring ourselves to sell them.