Spreadbet Magazine’s top 3 picks for 2013
Assumption tHREE The global macro economic backdrop is likely to continue to improve Recent global economic statistics, in particular out of the US and China — combined, the 2 major components of the global economic engine — have been encouraging. The US jobs market continues to improve, inflation remains controlled and so not causing any alarm on the liquidity spigots front and, at the time of writing, it seems that the so called “fiscal cliff” is likely to be averted — it being in neither party’s interests to drive the US back into recession. The new cabinet that have just taken their seats of power in China are likely to want to put their foot on the pedal in 2013 in applying new stimuli too. Industrial production is already on the turn upwards and it looks like the Shanghai Composite has put in a bottom after falling heavily in 2012. In short, should the Chinese locomotive begin to fire on all cylinders next year, then expect commodities and the miners to outperform materially, hence our inclusion of ENRC. The new Japanese Prime Minister, Shinzo Abe, has already made clear to his electorate that he intends to, once and for all, re-flate the Japanese economy and rid it of the deflation that has bedevilled the economy for nearly 20 years now. Make no mistake, if he is successful in his endeavour, then Japanese equities will respond accordingly and add a new dimension to the global equity market sentiment backdrop.
The major “bogeymen” on the horizon are the Eurozone sovereign debt crisis and the US debt ceiling. The latter will, as ever, be fudged and the ceiling likely raised again early in the New Year, but it is the Euro situation that we think can cause most trouble for investors likely around the early summer period. It is our contention that 2013 will be the year that Greece finally exits the Euro. The fact that it has been anticipated for so long and yet the politicians have not pulled the trigger, leads us to believe that the actual economic effects in Europe will be muted and for Greece, similar to Iceland in 2009 when they defaulted on their debt, the best thing to happen to her people for 5 years. This potential scenario is the reason why we will be backing our picks with 75% of the available trade capital, to ensure that in the inevitable knee-jerk reaction to such an event that we can add to our positions — prudent trading principles.
“The new Japanese Prime Minister Shinzo Abe has already made clear to his electorate that he intends to, once and for all, re-flate the Japanese economy and rid it of the deflation that has bedevilled the economy for nearly 20 years now.”
January 2013
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