As the world’s largest stock market (the S&P 500) continues to trade near record highs, you’d assume the US economy is strong, right? The market is adjusting to ‘lower for longer’ interest rates. As long as economic growth doesn’t slow too much, this is the primary reason why stocks will remain elevated.
Think you’ve missed the decade long share market boom? Sat out the unbelievable cryptocurrency boom? In my opinion, you’ve not seen anything yet. It’s not too late to get a stake in the biggest opportunity in decades.
A return to the mining boom could put upward pressure on interest rates. And that would threaten housing, especially in the highly leveraged east coast cities. So the success of one of Australia’s key pillars may be a threat to the other.
The boom times are here for everyone it seems…Well, not everyone. The poor old Australian stock market is lagging behind in this period of record highs. In fact, it still needs to rise about 17% to get to the levels of 10 years ago.
The US argues that Beijing forces US companies into giving away Intellectual Property as the price for doing business in China. Stealing business ideas is one thing, but it’s the deeper technology insights the US wants to protect. How Trump reacts to this is the big unknown.
Why should you care? Because the price of oil has an effect on all aspects of the economy. From currencies to shares, to business profits. And if you’re an investor looking for big opportunities, this could be huge.
Bitcoin is all the rage at the moment. No wonder…it’s trading around US$4,800, up a gazillion percent or so over the past five years. How do you put a price on the strength of the underlying technology? That’s the market’s job. As it tries to estimate the correct value, it will overshoot and undershoot intrinsic value.
Just last week Alphabet or Google as I still tend to call it — released a new suite of products. And although the company dropped the ‘Google’ name for the parent company, they’re clearly not averse to using it to promote their new line of hardware. In amongst this plethora of new products however, there was no new smartwatch.
The general view has gone from one of another potential interest rate cut, to a question of when the rate rising cycle will start. But the just-completed reporting season didn’t exactly confirm that view. Overall, earnings growth was lacklustre. But that’s what you should expect in a low growth economy.
However, if Neilson’s investments continue to rise, beating the market comfortably, his fund could claw back capital, leading to higher profits and dividends into the future.