Disclaimer

Disclaimer. After nearly 40 years managing money for some of the largest life offices and investment managers in the world, I think I have something to offer. These days I'm retired, and I can't by law give you advice. While I do make mistakes, I try hard to do my analysis thoroughly, and to make sure my data are correct (old habits die hard!) Also, don't ask me why I called it "Volewica". It's too late, now.

BTW, clicking on most charts will produce the original-sized, i.e., bigger version.

Friday, March 30, 2012

Bull markets continue



For the S&P500, the golden cross back in January has proved exactly correct. As to why the market is roaring, how about:


  • Expansive monetary policy.  Bernanke has said no rate rises until the end of 2014.  Not that that doesn't mean that QE1 and 2 won't be gradually withdrawn.  But they aren't  needed any more because ...
  • The economy has started self-sustaining growth.  Rising confidence, a floor in housing, rising employment etc all suggest profits will keep on growing.



Meanwhile, the Ozzie market has just broken out of the top end of a wedge after making its own golden cross in Mid February.   Very positive formations.

Why?

  • Oz market is cheap
  • China will start reflating soon
  • World mid-cycle growth correction is over
  • A$ (surprisingly!) has peaked.  
  • What else do you buy?  Bond yields are rising, cash yields less than shares, property is iffy ....


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