Monday, November 3, 2008

Infrastructure-Related Equities - Comment by Hot Sexy Student

4 days ago, our hot sexy student knocked on our door. ( In case you have not been following us, we mentioned about this student some articles back. She predicted a recession or some anomaly sometime back in late 2006. Student is now currently studying in Victoria Junior College...she told us to say one in return for her continued ad-hoc advise.Yes, we are quite shameless to sometimes ask for a teenager's advise in managing money but hey, thats to broaden our perspective. You stone-headed, "know-it-all" adults!)

According to her, keynesian policies advocate pump priming by governments during times of economic duress to stimulate the economy. Such pump priming activities include spending on Infrastructure, defence related stuff and e.t.c. With that she left, leaving her sweet perfume lingering in the air and us, baffled at what she meant and what she was trying to prove. Anyway, we came to a conclusion that she was just flirting with us and left it at that.

A few hours later, we were reading THEEDGE magazine and chanced upon this article on "Emerging markets: Bear Rally or Long Bull Run".
Quote:
Building in emerging markets might slow for a while but infrastructure needs are still very much intact in the developing word, says[ Name suppressed to prevent speculation ] . A lot of government spending on railways, roads, ports and airports in emerging markets is direct budgetary spending, which won't be affected by the global credit squeeze, he notes.

There is also pump-priming through fiscal stimulus packages that invariably include big chunks of infrastructure spending. As exports slow, many developing economies in Asia, Latin Amercia, Eastern Europe and Africa are being pump-primed with increased budgetary spending on infrastructure." Unquote.
Alas, we knew what the hot sexy "oracle" meant. What services are needed for infrastructure building? Not all severly beaten construction companies are the same it seems. Think specialist. Your guess is as good as ours.
Also just something which caught our eye from THEEDGE to share. (Not that it will affect our team's strategy, of cos).
"Since 1945, the average return for US shares under Republican presidents has been 10.2% per annum versus 15.1% per annum under Democrats". So, who would you vote for?
Heres a pic that looks like our hot sexy "oracle".




4 comments:

  1. Dude,
    It is heart-warming to know that a little girl who is still in colleage can show so much interest in the global economy and is trying to apply what she learn from textbook to the real world.

    Nevertheless, to share my view on this topic.

    The great leaders in China heard her too, see "China to invest $445bn in rail system" http://www.news.com.au/story/0,23599,24551437-38197,00.html

    Would I buy construction companies in this case? Nope, why? Cos you get paid only upon certain % of work being done, and a lot of the time even the big boy get kill on this.

    Further discussion will be on my site as comment box are not meant to have too many words.

    http://www.num13er.com

    ReplyDelete
  2. Hi ZhuangZi, ( The guy who i thought was a hot sexy girl!)

    I tried posting comments on your website article but somehow some errors keep popping up. What you say makes perfect sense in your article and when we were writing our article above, we shared your sentiments.

    Ok, actually we did not want to be so forthright but since usually not much people look at comments since its such a small link..we will just say.

    We think specialist crane rental companies in the construction industry is great. Firstly they are cheap now compared to their NTA ( not getting cheaper anymore as we write).Since they are in the business of renting, we think they would still do good at this point in time given governments spend on infras. Also, such companies are not directly related to the high debt of infras project.( Ya loh...thats why not all construction companies are the same..maybe we should have written..not all construction [related] companies are the same)


    Yeah that little girl consistently scored above 85 marks for her econs ok..don't play play .....


    Anyway, in this article, some construction stocks are good.

    ReplyDelete
  3. Think you forgot to fill in your name and email address.

    I have copied and paste your comment to my site already.

    You should check out my list of 10 SG stocks with est Div Yield above 20% hoo....

    ReplyDelete
  4. Hi Zhuangzi,

    Checked out your list of 10 SG stocks..but don't feel compelled to buy these..just kinda risky..for the moment.

    Anyway, we tried to write comments again and the same issue popped up...Operation Aborted when we clicked on the comments link..We didnt even have the chance to key in anything and this is a different computer we are using:)For your information.....

    ReplyDelete