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. I do make mistakes, but I try hard to do my analysis thoroughly, and to make sure my data are correct. Remember: the unexpected sometimes happens. The expected does too, but all too often it takes longer than you thought it would.

The Goddess of Markets punishes (eventually) greed, folly, laziness and arrogance. No matter how many years you've served Her. Take care. Be humble. And don't blame me.

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  Not that that doesn't mean that QE1 and 2 won't be gradually withdrawn.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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