GDP Falls 7% as Aussie Economy Is Hit and Yet Small-Caps Are Booming
The economy has been ‘savaged’ according to Prime Minister Scott Morrison.
Confirming the news that we all knew was coming. Australia has now officially recorded its first technical recession in 29 years.
An incredible, record-breaking run finally snuffed out.
And it has been a brutal end to the run at that.
GDP has fallen 7% in the June quarter. The worst result on record, with annual growth at its lowest point since the Second World War.
Suffice to say, it’s been a grim shock.
But, no one needs to be told that. After all, we’ve all been living through it.
Yet, you’d be forgiven for thinking there was no recession at all when you look at the state of small-caps…
Extraordinary times, extraordinary opportunities
As we’ve continued to highlight amidst this whole recession (and pandemic), certain small-caps are recording blistering gains.
Nearly every day, some small-cap seems to be lighting up the ASX.
As can be seen with the likes of BrainChip Holdings Ltd [ASX:BRN] today. Or even Pointerra Ltd [ASX:3DP] yesterday. Or the dozens of other stocks we’ve covered over the past few months.
Point is, small-caps are crushing it.
And they may only be just getting started…
Last week for instance, I talked about today. Noting that the inevitable recession was on its way. All we were waiting on was a figure to gauge how bad it would be.
Turns out, it’s pretty bad.
As I noted at the time though; good, bad, or ugly, the result is irrelevant. What matters is what comes after the recession: the recovery. A period that historically has favoured small-caps extremely generously.
Because you should see today’s news not as a sign to panic. Rather, it is an opportunity. The first opportunity of its kind to grace the Australian market in nearly three decades!
Small-caps are booming right now, but the best may be yet to come.
With a whole cohort of individual companies or entire sectors likely to play key roles in our recovery. Right now, for example, we’re seeing a massive tech boom. Whether that will continue forward remains to be seen.
One way or another though, there will likely be massive gains up for grabs.
Take our report covering three ‘explosive small-caps’ for instance. A detailed look at stocks at the heart of major trends that could become cornerstones of our future economy.
It is these kinds of opportunities that investors need to be on the lookout for. The kind of returns that are (usually) only seen in the wake of a major recession.
Now is not the time to be on the sidelines. It is time to prepare for a small-cap bonanza.
For Money Morning