ASX INVESTMENT TALKS
Understanding market cycles and what lies
ahead
SPEAKER: Alan Hull, educator
LOCATION: Melbourne
DATE: March 2013
DISCLAIMER: The views, opinions or recommendations of the presenters are solely their own and
do not in any way reflect the views, opinions, recommendations, of ASX Limited ABN 98 008 624 691
and its related bodies corporate (“ASX”). Information and material presented at the seminar is for
educational purposes only and does not constitute financial product advice. Investors should obtain
independent advice from an Australian financial services licensee before making investment
decisions. No responsibility is accepted by ASX for any loss or damage arising in any way (including
due to negligence) from anyone acting or refraining from acting as a result of this information or
material.
© Copyright 2013 ASX Operations Pty Limited ABN 42 004 523 782. All rights reserved 2013 .
Market cycles and what lies ahead
Alan Hull is an authorised representative of Avestra Capital,
holder of Australian Financial Services Licence No. 292464
All comment made during this presentation is of a general
nature and does not take into account the individual
circumstances of anyone in particular.
Accordingly, the content of this presentation is not a
recommendation that a particular course of action is
appropriate for any particular person and therefore is not
suitable to be acted on as investment advice.
If you were to invest in a share then you
would want it to be valued at a fair price,
maybe give or take a small percentage?
And wouldn’t you want the price of your
share to rise with the passage of time?
In fact we all would and so when the
Stockmarket is operating in a highly
efficient state this is the pattern we see
Conventional economics and modern
portfolio theory both employ this model
But there are times when the market...
...isn’t that efficient and it expands
And then it will contract...
...forming a triangular pattern
This phenomenon is quite common...
...and is seen across different markets
These cycles occur in a predictable...
...sequence – expand, contract, channel
However the application of stimulus...
...can alter these patterns
In August of 1971 the U.S. Treasury...
announced a major stimulus package
And what we’re seeing today closely...
...parallels what occurred in the 1970s
The U.S. experienced a secular bear...
...market which lasted for 17 years
Now to the current situation and...
...China is caught in a bear market
The SP-500 index is close to its upper
...boundary – a clear warning signal
London’s FTSE100 is also very...
...close to its upper boundary
But we’ve reached our upper boundary
So we definitely need to exercise caution
Another warning signal...
...is the appearance of lemmings
Maybe all this analysis is wrong...
But compare potential reward to risk
You’ll find more on market cycles in my...
Thank you for
watching this
presentation
...new book at alanhullbooks.com.au
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