This bear was over
January 15th, 2021
1 minute read
Imports
Imports have hugely fallen out of favor in recent years, they’re seen as an unwanted negative. But to me, imports are my favorite macro indicator. The reason is simply because imports show the purchasing strength of our own domestic economy. For this reason it’s perhaps not too surprising that imports have the closest correlation match with our stock market JCI index.
April
If you’ve been reading Sharpfokus for a while, you might remember our report on April 16th 2020. March imports had just been announced & they were sharply higher after a large drop in February from January. When we saw the data we titled the report (to some ridicule), ‘The Bear Is Over’. The JCI was at that time at 4,480.
December
It turned out that was correct. The low for Indonesian imports was in February 2020 at USD 11.6 billion. The low for the JCI was in March. December imports are just announced at USD 14.4 billion +13% from November & just like the JCI, back to almost exactly the same level as they were in December 2019, USD 14.5 billion.
2011
Zero growth for imports & zero growth for the stock market for the year end 2020 with a fantastic arbitrage opportunity during most of the year. The problem now is that the arbitrage has gone, but the zero growth hasn’t. Imports were USD 14.2 billion in December 2018... USD 14.8 billion in 2017. USD 14 billion in 2016...see the problem?
Next?
After all the investment excitements of 2020, the sober reality now is that we have to start growing again. There are several positives in that we find in our research a great many low value stocks. We also see lower investment spending allowing cashflow to improve. But we still need to see the growth. January 2021 imports will be fascinating.
1 minute read
Imports
Imports have hugely fallen out of favor in recent years, they’re seen as an unwanted negative. But to me, imports are my favorite macro indicator. The reason is simply because imports show the purchasing strength of our own domestic economy. For this reason it’s perhaps not too surprising that imports have the closest correlation match with our stock market JCI index.
April
If you’ve been reading Sharpfokus for a while, you might remember our report on April 16th 2020. March imports had just been announced & they were sharply higher after a large drop in February from January. When we saw the data we titled the report (to some ridicule), ‘The Bear Is Over’. The JCI was at that time at 4,480.
December
It turned out that was correct. The low for Indonesian imports was in February 2020 at USD 11.6 billion. The low for the JCI was in March. December imports are just announced at USD 14.4 billion +13% from November & just like the JCI, back to almost exactly the same level as they were in December 2019, USD 14.5 billion.
2011
Zero growth for imports & zero growth for the stock market for the year end 2020 with a fantastic arbitrage opportunity during most of the year. The problem now is that the arbitrage has gone, but the zero growth hasn’t. Imports were USD 14.2 billion in December 2018... USD 14.8 billion in 2017. USD 14 billion in 2016...see the problem?
Next?
After all the investment excitements of 2020, the sober reality now is that we have to start growing again. There are several positives in that we find in our research a great many low value stocks. We also see lower investment spending allowing cashflow to improve. But we still need to see the growth. January 2021 imports will be fascinating.
