Focus on Opportunity to Win in Stocks

Focus on Opportunity to Win in Stocks

Hear that noise? That’s the rumble of Australians talking. That’s because there’s more of us every passing day.

Australia’s net migration is booming, according to the latest statistics. In the 12 months to July, we saw 245,400 people move here.

Apparently, those kinds of heady numbers haven’t been since 2009.

New South Wales and Victoria are taking the bulk of them.

If you take any pride in Australia’s record run without a recession and healthy GDP growth, you can mostly pin it down to these arrivals.

Australia’s economy grows because we keep stuffing more people in it.

It’s not because we’re a hotbed of innovation and productivity.

It keeps the bankers and property developers happy.

It means plenty of fresh meat up for grabs. The sharks come out when there’s blood in the water.

The Australian Financial Review reports that massive US private equity firm Blackstone is preparing to launch its own home lending arm out here.

It will service the market the banks are being forced to shun for regulatory reasons.

Think foreign buyers, Aussies with offshore income, and property investors that don’t pass the conventional metrics and barriers.

More credit is bullish for the economy…

China to keep Aussie tourism booming for years

We can say the same thing about Chinese tourists. China is on track to overtake New Zealand as our number one market as early as next month.

This will be one of the biggest growth markets worldwide for years.

I cannot imagine what the classic European cities will look like in a few years.

They’re already strained with the hordes of Americans, Australians and all the rest as they are now.

What happens when we add in a middle class bigger than that of the US?

No wonder hedge fund veteran Jim Rogers says the best thing you can do for your children is to teach them Mandarin.

There were about 1.2 million Chinese visitors to Australia in 2016. That number is expected to triple by 2026.

One stock to keep an eye on here is AuMake International Ltd [ASX:AU8].

It runs a network of stores full of Aussie goods that Chinese tourists and the daigou shoppers can stock up on.

Think infant formula, vitamins, milk power, hone and wool products. You’ve no doubt heard about these trends before. They’re not new.

But Chinese shoppers are still prepared to pay high premiums for these.

That’s good news for Aussie producers.

A word of warning: The stock has run hard since it listed in October.

Don’t rush out and buy it.

But as a proxy to gauge the strength and growth of Chinese tourism in Australia, keeping tabs on the numbers coming out of flagship city stores is probably not a bad idea.

I actually thought about picking up some stock in this one a short time after it listed. That’s early for me. I generally like to let a stock settle on the market for a while before considering buying.

I was also put off because it had quickly doubled after it came onto the market.

Unfortunately (for me), it has since doubled again!

Focus on opportunity

It highlights a broader point. Some trends are so big they’re almost unstoppable.

Chinese tourism is one of these. They’ll be other ways to profit from this, if we stay alert.

It illustrates to me the importance of focusing on specific opportunities when it comes to your money, instead of wider economic woes.

The media commentary will always be full of problems. I’ve read nothing but endless worries and concerns every day since 2012.

Those who focus on these things blind themselves to opportunities all the time.

If you spend your life worrying about the next big crash, you will be much poorer for it.

Big crashes are rare, but opportunities to double your money happen all the time on the share market.

I think we’re totally blessed to be actively investing right now.

Even better these days, we can access the awesome stocks on the US market with ease.

Cryptos are even simpler once you’re ready to go.

The gains can come very fast there. Much faster than the stock market, as a general rule.

I wonder how much punting money that used to go into stocks is getting diverted into the crypto market?

2018 will be an interesting test of this.

Either way, I expect next year to present a lot of opportunities for good gains in both markets.


Callum Newman Signature

Callum Newman
Editor, The Daily Reckoning Australia