News

January 06, 2009

Australia Looks Better Poised Than Most Other Western Economies For Recovery In 2009

By Our Man in Oz

Perhaps it’s the sun which sets Australians apart from their British cousins, both in pallor and confidence. While many Brits can only see gloom and doom as they struggle through a freezing northern winter, Aussies are frolicking at the beach and approaching 2009 with a cautious but breezy confidence. The difference is especially obvious to anyone who has his roots in Australia (like Minesite’s Man in Oz) but finds the time to pop over to see how the rest of the world is handling the great asset-value meltdown. Over the past few weeks the differences observed have been remarkable. Sure, Australia has been hit by the financial crisis and commodity-price collapse. Fortunes have been lost, just as they have in London. But, whereas the view in Britain seems to be that recovery is eons off the view in Oz is that the first green shoots of spring can already be seen. It’s a classic case of someone seeing a glass half-full, and someone else seeing the same glass half-empty.

For investors, a quick heads-up alert is important in looking at the year ahead, if only to avoid over-confidence and a belief that the destruction of 2008 will be quickly forgotten. It won’t, and that means share price recovery will be erratic. But, by the end of 2009 there seems little doubt that the stock market will be at a higher level, perhaps even substantially higher, than the level at which it ended last year. Most forecasts, which are really nothing more than best guesses, are for a...