-=> Quoting Bob Muirhead to All <=-

 BM> Have just worked my way round to this Area and from a sampling of the
 BM> messages it seems to meet my interests, namely financial and property
 BM> investment and general economic matters.  Has anyone discovered other
 BM> BBS with similar interests that are worth checking out?

 Welcome and glad to have you here. Sorry for the delay in replying -
 but I've been busy moving my BBS to work and my home to a beach B-)

 BM> Any comments on the state of the Aussie share market?  My view is that
 BM> the AOI will struggle to get to 2150 by calendar YE.  Its a race now

 I think struggle is the operative word. I'd be amazed to see it that
 high unless something miraclulous happens. I'm a bit of a bear at the
 moment ...

 BM> between rising interest rates tending to depress the AOI and rising
 BM> corporate earnings tending to raise it.  So we are in for some months
 BM> of basically flat performance - absent unexpected shocks, of course.

 precisely - I think the rally of 1993 factored most of those rised into
 expectations.

 BM> By mid to late 95 the market will start to fixate on the next
 BM> recession. The common belief is that it will be in 97 or 98, but I am a
 BM> bit more optimistic because Japan and Europe are still to fully exit
 BM> recession and because our economy is increasingly tied to Asian growth,

 True its tied - but I look at how closely our currency moves with the
 USD and that makes me worry more about the US outlook. When Asia
 sneezed we catch cold, but when the US sneezes we get pneumonia

 BM> which is likely to continue strongly.  Overall, given that inflation is
 BM> likely to continue low and over the long term the AOI has averaged a
 BM> few per cent better than inflation, we are likely to see average AOI
 BM> growth of only 7 or 8 percent per year over the rest of the decade. 
 BM> All this may be disappointing to people used to much higher nominal
 BM> growth during the past 20 years.

 And how long will we continue to face high real interest rates? The
 Reserve Bank fears a breakout of inflation. Housing loan figures have
 recently helped on that front. But employment and profits aren't going
 to do great shakes for a while.

 Having said all that, I must say that I have some hope (I must be an
 optimist!). Low inflation and affordable interest rates encourage me to
 park most spare cash in stocks. Well managed companies should see nice
 profits for the next 5 years. I'd avoid Index weighted protfolios and
 try to invest in good businesses. Plus keep a small reserve to
 speculate on the next round of craziness.

 Another thing to watch out for is the property market. Interest rates
 are on the way up - and incomes are not headed that way. I expect to
 see some distressed sales in about 2 years time.


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--- Blue Wave/Max v2.12 [NR]