The 3 things which must go up, Sharpfokus45
20 years is usually positive
Some say stocks are a casino. Well the best odds in a casino are 50%, over time US stocks are positive 53% daily 70% annuallly, 90% over 10 years & 100% over 20 years. But here’s 3 investments which are flirting with or even breaking that 20 year positive rule & should therefore be amazing buying opportunities.
Some say stocks are a casino. Well the best odds in a casino are 50%, over time US stocks are positive 53% daily 70% annuallly, 90% over 10 years & 100% over 20 years. But here’s 3 investments which are flirting with or even breaking that 20 year positive rule & should therefore be amazing buying opportunities.
UK
Horror
First the FTSE 100. I’ve watched from a distance as the UK has gone from nanny to full blown EU led socialism, crushing growth & freedom along the way. But I do believe the people will drag it out of its current state. This is how it’s played out in the financial markets. Bond yields collapsed Japan style & stocks have gone nowhere.
7000
The FTSE was still sort of doing ok up to 2000. I remember being on holiday there as the end of year approached & the papers, which used to be full of stock predictions but are no more, expected stocks to surge above the 7,000 level into the new millennium & beyond. As you know this never happened.
Now & Dow
Instead the FTSE 100 never made it & fell back. It tried again in 2013 & failed again. It’s only been in 2017 that stocks finallymade it above the 7000 level. Now they’re at 7700 10% higher in 18 years, dangerously close to nothing. Meanwhile the Dow has gone from 10,000 to 25,000, making the FTSE one huge potential opportunity.
JCI in $s
Amazing run
I’m sure you know, Indonesian stocks have had the most amazing run. The JCI index started back in 1986 at just 100 & today it is at 6,000 which is a huge return. Many of the big names like Astra, Sampoerna, Unilever have made even more spectacular returns & foreign investors have owned large amounts of those stocks.
1990
Why haven’t local investors joined in as much? The JCI in the mid 19080s at first fell almost in half to 60. But then it started to surge & rose up 10X to reach more than 600 by 1990 just 4 years after it started. The rupiah then, & this might surprise you, was at just1,700 to the $. So in USD terms the JCI had reached about 0.35
Now
By 1997 the JCI breached 700 but with Rp at 2,400 was below 0.3 in USD, lower than 1990. Today we are just below 6000 with Rp about 14,000. That’s 0.42 so in 28 years Indonesian stocks (& the JCI is an all share index) have increased just 15%, almost nothing & even worse than the UK. Massive opportunity number 2.
Palm oil
The 80s
Number 3 is not directly a stock but it’s linked to stocks. This one is the most amazing investment opportunity of all. Palm oil. Palm oil sprang to prominence in the 1970s as production shifted from native Africa to here in Asia. As with all moves it was disruptive & the price shot up from $200 to reach almost $1,000 by 1984.
Today
The price then slid back down through the 1990s & by 2005 was about $400. From there it set off on a run which you might remember took it up above $1,000 again by 2008, then down, then to $1000 again in 2012. Then back down & today it’s at just above $600. So the price has been at $1000 3 times but has fallen by 40% in 34 years!
Outlook
Palm oil sits at a fascinating juncture. After high double digit growth, production is now averaging only 2-3% a year. New planting in largest producer Indonesia has slowed while replanting is now starting to increase. Nett off replanting & we are already back to 2004/5 levels when the last great rally started.
Horror
First the FTSE 100. I’ve watched from a distance as the UK has gone from nanny to full blown EU led socialism, crushing growth & freedom along the way. But I do believe the people will drag it out of its current state. This is how it’s played out in the financial markets. Bond yields collapsed Japan style & stocks have gone nowhere.
7000
The FTSE was still sort of doing ok up to 2000. I remember being on holiday there as the end of year approached & the papers, which used to be full of stock predictions but are no more, expected stocks to surge above the 7,000 level into the new millennium & beyond. As you know this never happened.
Now & Dow
Instead the FTSE 100 never made it & fell back. It tried again in 2013 & failed again. It’s only been in 2017 that stocks finallymade it above the 7000 level. Now they’re at 7700 10% higher in 18 years, dangerously close to nothing. Meanwhile the Dow has gone from 10,000 to 25,000, making the FTSE one huge potential opportunity.
JCI in $s
Amazing run
I’m sure you know, Indonesian stocks have had the most amazing run. The JCI index started back in 1986 at just 100 & today it is at 6,000 which is a huge return. Many of the big names like Astra, Sampoerna, Unilever have made even more spectacular returns & foreign investors have owned large amounts of those stocks.
1990
Why haven’t local investors joined in as much? The JCI in the mid 19080s at first fell almost in half to 60. But then it started to surge & rose up 10X to reach more than 600 by 1990 just 4 years after it started. The rupiah then, & this might surprise you, was at just1,700 to the $. So in USD terms the JCI had reached about 0.35
Now
By 1997 the JCI breached 700 but with Rp at 2,400 was below 0.3 in USD, lower than 1990. Today we are just below 6000 with Rp about 14,000. That’s 0.42 so in 28 years Indonesian stocks (& the JCI is an all share index) have increased just 15%, almost nothing & even worse than the UK. Massive opportunity number 2.
Palm oil
The 80s
Number 3 is not directly a stock but it’s linked to stocks. This one is the most amazing investment opportunity of all. Palm oil. Palm oil sprang to prominence in the 1970s as production shifted from native Africa to here in Asia. As with all moves it was disruptive & the price shot up from $200 to reach almost $1,000 by 1984.
Today
The price then slid back down through the 1990s & by 2005 was about $400. From there it set off on a run which you might remember took it up above $1,000 again by 2008, then down, then to $1000 again in 2012. Then back down & today it’s at just above $600. So the price has been at $1000 3 times but has fallen by 40% in 34 years!
Outlook
Palm oil sits at a fascinating juncture. After high double digit growth, production is now averaging only 2-3% a year. New planting in largest producer Indonesia has slowed while replanting is now starting to increase. Nett off replanting & we are already back to 2004/5 levels when the last great rally started.
Clear where to buy
I don’t know anything about the U.K. stock market but if you do that could be a very interesting place to invest from now. I do know that Indonesia’s JCI is possibly the cheapest stock market in the world. & as palm oil heads into a full supply crisis, that’s the sector with the most potential upside.
Have a great week.
Sebastian
I don’t know anything about the U.K. stock market but if you do that could be a very interesting place to invest from now. I do know that Indonesia’s JCI is possibly the cheapest stock market in the world. & as palm oil heads into a full supply crisis, that’s the sector with the most potential upside.
Have a great week.
Sebastian