The Somersoft leading indicator

Over the last three years , I've found that what people are talking about on this forum ( and the Chat room ) is a good indication of where you should be going....

So what's the the hot topic amongst the Somersoft Property Junkies ?

Shares .

See Change

Energy & resources

Cheers,

Aceyducey

Acey

I Would love to wake up each morning with More Energy & a few extra Resourses

Gee Cee

Worn Out Old Fart

Energy

I just want to wake up each morning

Chris

be careful sc. when an investment idea hits the forums en masse, then you just missed the ramp and are now on the plateau...

anyone know their economic cycles well enough to guess what the next big thing after resources will be? I'm confused.....following are the clock hours and corresponding economic conditions.....which is a terrible oversimplification which doesn't account for why iterest rates have moved up, everyone took their money away from property only to throw it at shares.


12 top of boom
1 rates up
2 shares down
3 commodity down
4 moneytight
5 property down
6 recession
7 rates down
8 shares up
9 commodity up
10 easy money
11 property up




does anyone have any comments about these seasonal share market trends....noted by a reputable Aussie share advisor.....

Jan-state of market at end of Jan predicts the rest of the year 9/10 times.

Feb- downward correction- considered bad month for market

Mar- march and april better

Apr-

May- minor peak in May

Jun- nasty month, good time to buy.

Jul- rally- one of the best months for market 6/7 yrs.

Aug-

Sept- early sept often sees market peak

Oct- often some gains - but can be huge swings

Nov- seasonal low late nov- early dec

Dec- Santa claus market- about week before chrissy- prices rise from here til
Jan. 37/43 years pre 1998...if doesn't happen, the following year is dicey. Wall st gained 1.5% in last 7 trading days of dec

thefirstbruce said:

be careful sc. when an investment idea hits the forums en masse, then you just missed the ramp and are now on the plateau...

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Actually, from experience, that isn't true.

Posts in this forum generally are leading the market.

PI tends to be behind the market.

I compare the discussions on the two to help pinpoint where the market is

Cheers,

Aceyducey

TheFirstBruce

I'd echo Aceys comments. That's why I called this post the Somersoft Leading indicator.

My observations are that we have a fairly educated group on this forum , and we tend to be at the head of the pack.

Obviously if you follow the share forums, they've been talking about resources for a while , but there is ( from my observations ) absolutely no hype whatsoever spreading into the general community about shares at the moment , or about the resource sector in particular. I think what has happened over the last 12 months has been part of the normal share marketebb and flow.

Your comments in another post about midcap coal companies indicates you keep an active eye on the market but it was interesting hearing some of the comments coming out of the diggers and dealers conference inparticular with reference to the potential for sales into chine and also india. Friedman , when interviewed on ABC radio , was talking about a 30 year resource boom ....

The resource sector has been moribund for the last 20 years, and what has happened recently , IMHO , can't be construed as an over reaction.

We are sitting on massive resources and we are positioned between the two largest potential markets in the world at the moment. As well , as has been mentioned Japan is awakening from it's slumber.

There are still a lot of people in Australia looking for places to invest ( still low rates and low unemployment ) and there is an ever increasing pool of superannuation funds looking for a home as well.

I think we will see an ongoing round of minibooms in different areas of investment and Australia has a history of resource bubbles. There's nothing like the rumour of an oil well about to spud , or high grade nickle ores, or a new gold find to get the speculator in the australian investor at full roar again.

I mean it's almost four years since the Tech Wreck and with the increasing rate of investor ( mis) information we're well and truly due for a mining boom .



See Change

Frankly right IMHO Australia seems very much between booms....holding it's breath looking for the next big thing.

What will that be? I'm not sure as yet.

The share market really hasn't taken off as yet (sure it's had a long steady upward incline, but that's not a boom).

Property clearly is flattening & businesses, while growing, don't offer quite so many investment options (and the Business Angel networks I stay in touch with don't seem to be experiencing a boom as yet either).

Personally I'm not quite as interested in identifying the next speculative boom as ensuring I have strong positions in the essentials that keep our industrial civilisation running.

Once the next speculative boom is clear there will be plenty of time to get in anyway IMHO....these bubbles take several years to run - it's just that it takes the average punter a year or more to find out & actually take an action

Cheers,

Aceyducey

I agree with Acey that we may have another boom.

WHY??? well I am starting to feel Aust's unique advantages in size and weath means we seem to able to weather any downturn more than other countries.

Example the Drout. It was worst on record so we should have had a recession?!?! But we didn't. We did sella lot of lamb and cattle but now with mad cows issue in US famers get record prices? All very confusing. Not typical and certainly not able to be tracked if you had have know the drout was coming.

ECOMONY Low rates, low inflation euals bad for property? Not si. Low rates & generous tax breaks make property very good. Tied also a lot loosing in the Techboom and being vary of stock.

OIL. Yes it is high. That is bad. But cars are getting more efficient. and high prices encourage investors to drill equals more find, so oil is ok again.

I seems some chaos theory is at work. The works is so linked that we seem to be able to pick up on any boom, china etc..to our advantage.

Still thinking, Peter 147

Peter 147 said:

I agree with Acey that we may have another boom.

WHY??? well I am starting to feel Aust's unique advantages in size and weath means we seem to able to weather any downturn more than other countries.

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I'm a sceptic about this. Our advantages were the same in 1982 and 1990, yet we had severe recessions in those years. Around 1983 I recall considerable media discussion about waiting for the US economy to recover, and the conventional wisdom being 'if the US sneezes, we get pneumonia'.

Also our recovery from the 1990 recession was very slow (more so than 1984 which was a strong recovery) and unemployment remained in double digits until 1993 or 1994.

Example the Drout. It was worst on record so we should have had a recession?!?! But we didn't.

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Though agriculture is important for some regional economies, it is a diminishing proportion of our GDP. The multiplier effect is possibly less significant now than in previous times when we manufactured all our own farm machinery.

Residents of country towns who did wish to leave enjoyed a windfall capital gain on their houses as they sold out to city investors seeking higher yields!

Where drought affects exports then this is likely to lead to trade deficits, but would hardly affect demand from consumers in the cities.

OIL. Yes it is high. That is bad. But cars are getting more efficient. and high prices encourage investors to drill equals more find, so oil is ok again.

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The fuel economy of the Australian car fleet has been roughly constant for decades. Yes there are many small cars but there is also growth in 'Toorak Tractors' and SUVs, negating any small gains made. Car ownership has plateaued, but use continues to grow. The only Australian capital city that has enjoyed an increased modal share for public transport is Perth (due to rail expansion and more frequent buses on key routes), though Brisbane is showing promise with Translink.

I seems some chaos theory is at work. The works is so linked that we seem to be able to pick up on any boom, china etc..to our advantage.

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Though one could also mention a snowball effect, with a succession of events reflecting and reinforcing a trend, as was clearly the case in the 1989-90 period. I thought that with the collapse of Ansett, one.tel, HIH, etc and high property prices in 2001, we were in for a replay of 1989-90, though the crucial difference this time was the lack of inflation, government deficits under control and fewer government-big business financial scandals. China's continued growth also helped, though in 1998 if our economy was as 'enmeshed' with Asia's as much as Paul Keating wished for a few years before, then it could have been more than our dollar that suffered during the Asian crisis of that year.

Regards, Peter

Thanks for considered responses. Maybe I am being too harsh on forum savviness. I am frustrated at the moment trying to get back into resources (got out of most positions a few weeks ago when things plateaued) and thought there might have been a pull back by now. I'll have to put this down to experience as another reminder not to sell until support lines are clearly broken. I have sold out of too many positions too early this year.

July is historically a big buying month too, so I am wondering what this stall is all about. Recent data shows there is still strong interest in property, so I suppose a lot of ppl are staying in cash and waiting for property to soften before aggressively jumping in.

Re speculative next big things Acey, like you, I am more inclined to seek out that which isn't an opportunistic exploitation of other's slowness. I am more inclined towards creating business that efficiently matches supply to ethical intelligent consumer demands, especially demands from OS. What is your work background Acey? Have you any ideas on small business possibilities yourself.


SC, I hear what you say about resources, but I am also weary that at the first sign of a softening of the US economy (labor cost increases are slowing), resources will suffer based on the USA being China's (?and Japan's) largest export market. I am still concerned about the high level of consumer debt out there. I believe the first industry to suffer will be new car production. That industry is bound for rationalization soon, thanks to the Koreans.