Oh, the craic!
Excuse me for starting today’s missive with a bit of Irish. I’ve got Ireland on the brain. You’ll see the connection to today’s share market below. But first…
There’s a great little series on Netflix right now called Bodkin.
Bodkin is a small town on the coast of Ireland.
A trio of podcasters go there to investigate a twenty-year-old mystery. Several locals went missing on the night of the town festival.
There are ghosts in the town from the events of all those years ago.
One of the old local boys is called Seamus. He’s a big, bearded fisherman at the pub with a glint in his eye and a dangerous past.
Slowly our intrepid podcasters discover that Seamus may not be his true name at all…and his old life was likely on the wrong side of the law.
In other words, his past misdeeds catch up with him and disturb his 20 years of hiding out in a sleepy Irish village.
There’s a whole lot about that story that rhymes with where the Aussie economy is right now…
The Australian economy isn’t at its best,
that’s for sure
Look at the news right now.
You hear about Australia’s low productivity. Wages are stagnating.
House building is crumbling…just as rents are soaring. Energy costs are going up. Insurance bills are climbing.
The Victorian housing market is a yawn fest.
These are the symptoms we’re experiencing today…but the cause goes back to the decision made years ago. Or perhaps it would be best to say the lack of decisions.
I cannot remember the last Prime Minister of this country that presented some sort of coherent vision for the Australian economy…and put in some dynamic policy changes to make it happen.
And so, like Seamus in Bodkin, we’ve hid in our corner of the world and hoped that the past (and the future) wouldn’t catch up with us.
But it’s catching up to us now.
We have the same reliance on Chinese commodity demand that we did 20 years ago.
There’s been no serious tax reform even after the Henry Tax Review a decade ago made clear that it needed to happen — with urgency.
And for all the blather I’ve read about real estate over the years, here we are in 2024…with a housing affordability crisis.
Australia’s GDP growth is on track to be the weakest since 1992.
What does this mean for the
share market?
Clearly companies exposed to domestic spending face a subdued outlook.
Does that mean there’s no opportunity on the ASX?
Not at all!
For example, just because a company is listed in Australia doesn’t mean it operates in Australia.
An absolute belter of a stock in the last 12 months is called Life360 [ASX:360].
It’s doubled in price.
Life306’s main user base is Americans!
American GDP is smashing the rest of the world right now.
That’s just one example.
Another US company listed in Australia is GQG Partners [ASX:GQG]. GQG is a fund manager. They’ve doubled their share price within the last 12 months too.
Why am I telling you this?
These are just two examples of ASX shares that generate their major growth in overseas markets.
The state of Australia’s domestic economy doesn’t factor one iota into their prospects.
Don’t confuse bad news at home with the idea that there’s no opportunity at home!
There are heaps of example like this. We have West African gold miners on the ASX.
There’s a manganese miner that operates in South Africa. Copper stock Sandfire has a mine in Spain.
A lot of the biotech stocks are trying to crack the US healthcare market…because it’s the biggest in the world. Or big companies like ResMed [ASX:RMD] already sell in the USA.
I could go on and on…
One stock I told my readers to buy earlier in the year is called DroneShield [ASX:DRO].
Its main customer is the US military…but its products are manufactured here in Australia.
My readers who got on this one from the get-go are a whisker off doubling their money in three months. And while there are no guarantees these results will continue…
I think there’s plenty more potential in it too.
To see why, do make sure you go here to discover the biggest trend of them all. I can tell you one thing…Australia’s economy doesn’t even factor into it at all. That doesn’t mean you can’t benefit from it!
Best,
 |
Callum Newman,
Editor, Small-Cap Systems and Australian Small-Cap Investigator
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