Reporting in from the beach this week. Some people have been kind enough to have me to stay and have put me up in the loft of their bach. It is on the waterfront and is open air. At night, when trying to sleep, the ghostly surf deafens me as the stars shine massively from an inky blackness.
It is very romantic in that Kiwi holiday kind of way. I am bunking alone so it is not romantic in the other kind of way, but oh well. The whole neighbourhood has that lovely end of year sagginess about it, nary a care, and we laugh just as hard at all the jokes as we did the first time we heard them. Summer has us snared: sinker, line and hook.
Markets are always a bit flabby at this time of year. The brokerage houses are mostly quiet, advisers passing the time by texting their wives, who are at the beach, and googling for holiday bargains. The results are in, the final reports composed and the NZ50 index at the time of writing has nudged an all-time high of 6300. Most pleasing! So, on to some compulsory predictions for the year ahead.
Goldman Sachs, leading the unhappy brigade, expects rising interest rates and a strengthening dollar in the United States to throw a spanner into the already halting performance of American stocks (The S&P500 index managed only a 1.5per cent return this year). It also suggests peaking profit margins and above average P/E ratios will make further exceptional gains unlikely.
But Goldman Sachs thinks that actual share profitability might be okay (you can manufacture artificial growth by launching the odd sneaky stock buy-back, rather than doing it the nagging organic way, and we've seen quite a bit of that this year). Then it lists a few individual fancied shares. So, from Goldman Sachs, I guess a bob each way, just reading between the lines.
