Keep punting on resources?
by Peter Switzer
Sure he could be talking his book as he said all of this to CNBC as he launched his Global Resources Equity Index, which puts together two hundred global resource companies.
"The best sector that I know in the world economy is going to continue to be commodities," he said. "We have huge shortages of everything developing. The facts are we are running out of known reserves of everything and shortages are going to get worse.”
His point is that even if demand subdues, say if China slows down a tad, we still will have a supply problem with everything from lead to wheat. And when it comes to agriculture, there is a massive shortfall and it partly explains why there are people protests around the world right now.
Headwinds for the US market
I think there are headwinds ahead after the US market has done so well since August last year, but the Yanks’ company profits and balance sheets are in good shape and if they can do something about their bad mortgages, I reckon we could see some real employment growth.
David Murray, the chairman of the Future Fund is cautious about the potential inflation ahead but as I prodded him for whether he saw a bear-like sell-off ahead, he made two points that are worth remembering.
First, it won’t be easy for the market to rocket along for a long time because inflation will kick in and second, and importantly, his Future Fund still has a big exposure to stock markets. That has to say something.
Like many, he’s cautious but still investing in stocks and some special fund managers.
Personally, I don’t mind taking tips from the likes of David Murray and the people he invests with and in. I’m also happy to be at one with Jim Rogers.
Important information:This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.
The Switzer Super Report is a newsletter and website for self managed super funds. With exclusive commentary from Peter Switzer and Paul Rickard the Switzer Super Report will help you maximise your after tax investment returns and grow your DIY Super. Click here for a free trial or subscribe today.
Published on: Tuesday, March 01, 2011blog comments powered by Disqus