Previously on Sharpfokus
Odd one out 📈 Sharpfokus115
November 17th, 2019
⏰ 2 minutes read
⏰ 2 minutes read
Growth
There’s been a lot of discussion about some of the recent economic data & lots of conclusion that things have slowed down considerably. No surprise for Sharpfokus, we’ve been talking about no growth for over a year now. But remember growth still means that things are going up & we believe 3 economic indicators point to a new high for stocks. Here they are.
GDP
Nominal
We all live in an absolutely nominal world. That means when you purchase things your bill is in volume & price combined. What’s important to you is the absolute value of the bill, it’s not often you consider what the growth rate from the previous year has been. So the first economic indicators we consider is the absolute level of nominal GDP.
Growth
The absolute level of nominal GDP in the just released statistics is Rp4,068tn. The growth from a year ago is only 6%. Yes that’s slow, it’s slower than the last time growth was slow, 7% in mid 2016. It is the all time second slowest growth we have in our Sharpfokus records after the third quarter of 1999’s 5.1%.
8k
But at the same time in absolute terms this is a new record & the first time GDP has been above Rp4,000tn. The 3Q is also a sharp 2.6% increase from the 2Q & since the first quarter of 2015 GDP has now increased 49%. If the JCI has increased by the same amount it would be at 8,221. (Don’t forget the JCI is already far behind nominal GDP & from a 1996 base the JCI should be 17,000).
Imports
Follow
For some bizarre reason which we don’t understand, a lot of people don’t seem to like imports. But at Sharpfokus we love imports. Imports measure our wealth & the strength of our domestic economy. The wealthier we are, the more MacBooks we can buy & the more MacBooks we buy, the more productive we will be. It’s no surprise to us that imports have the highest correlation to the stock market of all the economic indicators.
October
When you know that imports have been totally flat, no growth since 2011, then it’s not going to surprise you that the economy is weak. Imports also took a terrible tumble into 2019. Falling from $17.6bn in October last year to just $12.2bn in February. But since then there’s be a recovery. In October imports were back to $14.8bn.
7k
The last 3 months of imports adds up to $46.2bn. In the first quarter of 2015, imports were $37bn. That’s an increase of 25%. If the JCI had increased by the same amount it would now be at almost 7k, 6,924. Given the wealth relationship between stocks & imports, we should be promoting more imports & not less, & especially not looking for import substitution....!
Sales
61
We are now covering 61 stocks for our Sharpfokus Saham (you can subscribe for Rp100k a month here). It’s been amazing to look at all the companies & sectors. This work has enabled us for the first time, to get lots more data than just the economic numbers & after all, the economy is the combined sales of these companies.
Slow, quick, slow.
We have already known about the weakness of the economy by looking at the combined sales of these companies, which is in total almost 10% of GDP. This is the pattern we’ve seen. Sales were flat in 2015/16, the last time GDP growth was weak. Then sales grew quickly in late 2016 & 2017 before flattening out again 2018 into 2019. Growth is slower than nominal GDP as of the 3Q., but i it’s starting to pick up.
9,000
The pattern of sales is similar for most all of the companies we cover accross many different sectors. In the 3Q sales have started to rise again & jumped by 8% from the 2Q. In absolute terms, the 3Q sales is almost Rp300tn from Rp188tn in the 1Q of 2015. That’s an increase of just under 60%. If the JCI has increased as much it would now be at almost 9k, 8,959 to be precise.
JCI
Those are the 3 drivers of rhe economy which we watch, nominal GDP, imports & company sales, all in absolute nominal terms with imports also in absolute nominal $ terms, which is our most preferred & real measure. They are all ahead of stocks & point to JCI index levels of 7k, 8k & 9k. Meanwhile the JCI is at 6k. Time for the odd one out, our stockmarket, to head to a new all time high.
Be a great investor!
Sebastian
There’s been a lot of discussion about some of the recent economic data & lots of conclusion that things have slowed down considerably. No surprise for Sharpfokus, we’ve been talking about no growth for over a year now. But remember growth still means that things are going up & we believe 3 economic indicators point to a new high for stocks. Here they are.
GDP
Nominal
We all live in an absolutely nominal world. That means when you purchase things your bill is in volume & price combined. What’s important to you is the absolute value of the bill, it’s not often you consider what the growth rate from the previous year has been. So the first economic indicators we consider is the absolute level of nominal GDP.
Growth
The absolute level of nominal GDP in the just released statistics is Rp4,068tn. The growth from a year ago is only 6%. Yes that’s slow, it’s slower than the last time growth was slow, 7% in mid 2016. It is the all time second slowest growth we have in our Sharpfokus records after the third quarter of 1999’s 5.1%.
8k
But at the same time in absolute terms this is a new record & the first time GDP has been above Rp4,000tn. The 3Q is also a sharp 2.6% increase from the 2Q & since the first quarter of 2015 GDP has now increased 49%. If the JCI has increased by the same amount it would be at 8,221. (Don’t forget the JCI is already far behind nominal GDP & from a 1996 base the JCI should be 17,000).
Imports
Follow
For some bizarre reason which we don’t understand, a lot of people don’t seem to like imports. But at Sharpfokus we love imports. Imports measure our wealth & the strength of our domestic economy. The wealthier we are, the more MacBooks we can buy & the more MacBooks we buy, the more productive we will be. It’s no surprise to us that imports have the highest correlation to the stock market of all the economic indicators.
October
When you know that imports have been totally flat, no growth since 2011, then it’s not going to surprise you that the economy is weak. Imports also took a terrible tumble into 2019. Falling from $17.6bn in October last year to just $12.2bn in February. But since then there’s be a recovery. In October imports were back to $14.8bn.
7k
The last 3 months of imports adds up to $46.2bn. In the first quarter of 2015, imports were $37bn. That’s an increase of 25%. If the JCI had increased by the same amount it would now be at almost 7k, 6,924. Given the wealth relationship between stocks & imports, we should be promoting more imports & not less, & especially not looking for import substitution....!
Sales
61
We are now covering 61 stocks for our Sharpfokus Saham (you can subscribe for Rp100k a month here). It’s been amazing to look at all the companies & sectors. This work has enabled us for the first time, to get lots more data than just the economic numbers & after all, the economy is the combined sales of these companies.
Slow, quick, slow.
We have already known about the weakness of the economy by looking at the combined sales of these companies, which is in total almost 10% of GDP. This is the pattern we’ve seen. Sales were flat in 2015/16, the last time GDP growth was weak. Then sales grew quickly in late 2016 & 2017 before flattening out again 2018 into 2019. Growth is slower than nominal GDP as of the 3Q., but i it’s starting to pick up.
9,000
The pattern of sales is similar for most all of the companies we cover accross many different sectors. In the 3Q sales have started to rise again & jumped by 8% from the 2Q. In absolute terms, the 3Q sales is almost Rp300tn from Rp188tn in the 1Q of 2015. That’s an increase of just under 60%. If the JCI has increased as much it would now be at almost 9k, 8,959 to be precise.
JCI
Those are the 3 drivers of rhe economy which we watch, nominal GDP, imports & company sales, all in absolute nominal terms with imports also in absolute nominal $ terms, which is our most preferred & real measure. They are all ahead of stocks & point to JCI index levels of 7k, 8k & 9k. Meanwhile the JCI is at 6k. Time for the odd one out, our stockmarket, to head to a new all time high.
Be a great investor!
Sebastian
PS It’s finally here! We will celebrate Sharpfokus 100 with an event on Monday November 25th at 6.30pm, WeWork Noble House. Places are limited so sign up now to get your invitation!
