Saturday, July 26, 2025
Chinese steel production – the ‘Sydney Harbour Bridge’ Index’ – how is it holding up?
China builds another Sydney Harbour Bridge worth of steel every 10 minutes! (with iron ore and coal mainly imported from Australia). China’s steel production has been the largest single factor that has driven Australia’s economic growth, prosperity, living standards, tax revenues, share market returns, and even house pieces, so far this century. But with China’s property / construction market collapsed, its economic growth virtually stagnant, and population now declining, has this slowed China’s steel production? - and Australia’s economic growth engine? My ‘Sydney Harbour Bridge Index’ is a simple way of keeping track of this key activity. It measures the number of ‘Sydney Harbour Bridges’ worth of steel China producers per hour. Where are we now? The growth era is behind us, but steel production is holding up remarkably well
2024-5: another year of double-digit returns for diversified portfolios. Did yours earn near 12%?
2024-5 was the third straight year of solid double-digit returns for diversified ‘passive’ ETF investors. A standard 70/30 (‘balanced’) fund or ETF portfolio should have returned near 12% after fees. Did yours? Problem is – most industry, corporate, retail super funds returned less than this. Why? Most have big holdings of opaque, illiquid assets, and/or pilfer your life savings to spend on marketing, sponsorships, and political donations. Even small amounts of under-performance can compound into very large differences in your future wealth and lifestyle. Here are the returns of major asset classes in 2024-5 and a 70/30 pro-forma portfolio mix.
Half-time 2025: Good start for 80% of share markets. Defying tariffs, turmoil, tiresome predictions
In first half of 2025 - 80% of world share markets are up, and 57% are up by more than 10%. A good start to another good year despite a constant chorus of wrong predictions of imminent recessions and corrections by economists and ‘expert’ commentators. It’s been a broad global rally, NOT just ‘US big-tech’ lifting the world. Can the rally continue? There have been plenty of longer rallies in the past!
The US stock market is the second LEAST concentrated stock market in the world! Why all the fuss?
Alarmist commentaries allege 'concentration' in the US stock market. Nvidia has shot up to 6% of total US market value. But this is actually the second SMALLEST 'largest stock weight per country' in the world. Only Japan has a less concentrated stock market. The 5 largest US stocks comprise 22% of total US market value, but there are 20 countries where more than 22% is in just ONE stock. The 10 largest US stocks comprise 31% of total US market value, but there are a dozen countries where more than that is in just ONE stock. In Australia there is also rising concern that CBA is now 12 % of total ASX market value. Actually, this is still relatively low. What concerns me is NOT concentrations, but excessive VALUATIONS, and over-confidence that earnings and dividends will rise to justify current prices. &
June 2025 snapshot: another great month (and financial year) for shares and diversified investors
Another month of strong gains on global share markets, across almost all industry sectors. Gold and oil prices spiked briefly after the US bombing of Iran, but receded by month end. Industrial commodities are mostly down on global slowdown fears plus over-production. Bond yields are down on global slowdown fears, and the US dollar continues to slide as per plan. For the 2024/5 financial year, diversified growth/balanced portfolios posted another year of above-average double-digit returns, despite all of the dramas and scares during the year.
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