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Economic Clock - where are we?

Discussion in 'Investing Strategies' started by Ol School Skata, 4th Dec, 2005.

  1. Ol School Skata

    Ol School Skata Well-Known Member

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    Would anyone like to suggest where we may be on the economic clock? ...at a guess i would say 12 o'clock....any other views?

    OSS
     
  2. Tzaki

    Tzaki Well-Known Member

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    Depends on the clock you are using, and what sector youa re talking about?
     
  3. Ol School Skata

    Ol School Skata Well-Known Member

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  4. MichaelWhyte

    MichaelWhyte Well-Known Member

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    OSS,

    Using that clock, which I haven't used before, I'd put us around 8 or 9 o'clock. We've got rising share prices and rising commodity prices. In 12 to 18 months time we might start to see these prices peaking and interest rates thinking about moving up again. If that happens, then that becomes a signal to sell out of shares and consider getting back into property according to this clock.

    Cheers,
    Michael.
     
  5. Ol School Skata

    Ol School Skata Well-Known Member

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    Michael - thanks for your response. Can you provide details or a link to one you have or do use?

    OSS
     
  6. MichaelWhyte

    MichaelWhyte Well-Known Member

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    OSS,

    This one from Kieran Trass is easy to understand and relates solely to the property cycle. His book describes the cycle in detail and indicators such as media, which can help you determine where you are in the cycle.

    http://www.hybridgroup.co.nz/Default.aspx

    On that clock, I'd put the Sydney property market at about 4 or 5 o'clock, in the middle of the slump. The rest of the Australian property markets are just lagging Sydney by varying amounts. Perth and Darwin are at about 12 or 1 o'clock. Brisbane at about 2 o'clock. Melbourne a touch behind Sydney, maybe 3 o'clock. Hobart and Adelaide, wouldn't have a clue... :D

    Cheers,
    Michael.
     
  7. Ol School Skata

    Ol School Skata Well-Known Member

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    The one i included the link for is a broader investment clock including shares and fixed investment, as in both shares and property.
     
  8. Tzaki

    Tzaki Well-Known Member

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    Hmm interesting,

    Mike, I think Sydney may be about 5.30 to 6 o'clock, depending on who you believe - the folks who say that there will be a rental shortage or Mr Symonds "sell everything" scare monger. Remember to factor in perception lag.


    OSS interesting clock, however I think it is a tad over simplistic and tries to do too many things, sure there are some interconnections between the share and property markets, but there are many of each sub-type of market - as Mike said Sydney is different from Melbourne, Brisbane etc etc, and then there are diferrent types of property market residential/commercial/industrial and within those sectors differing types of stock i.e. Units, Townhouses and House and land. I don't think that it is as simple as a see-saw arrangement where property dives and shares climb.. different sector react differently as do different areas. e.g. Commercial property market tends to follow the commercial sectors fortunes, ditto industrial.

    I prefer to think that all markets have, hmmm, yeah cycles (that are not exact copies of what went before but similar) but each has its own period and interactions between the sectors. (Imagine sine waves of differing lenghts some with ties to others)

    Hmmm not good on non visual descriptions here - hope you get the idea
     
  9. Steve Navra

    Steve Navra Well-Known Member

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    Different clocks for different folks :p

    Thing is that all areas and sectors are different . . . and the use of an economic clock to measure all conditions seems too simplistic to say the least. (Not to mention CHAOTIC events which tend to warp time!)

    Perhaps a more direct approach for each sector and medium (IE Rental Reality for property) might give a better indication of when to act. :)

    Regards,
    Steve