Why the Latest GDP Statistics are Useless


Oh dear. Australia is apparently in a ‘per capita’ recession.

The GDP numbers have come out this week and look decidedly weak.

Here’s the deal with this though.

Those statistics tells us about what happened last year.

They’re no good to us. The stock market is always looking ahead.

Please don’t waste your time fretting over these headlines.

That will serve you no purpose whatsoever, except distract you from all the exciting opportunities currently presenting.

It’s still a time to be hunting down profitable investing ideas.

You don’t have to believe me, either.

Today’s Profit Watch hammers the point home…

Here’s all you need to know really.

The ASX 200 went under 5,500 points in December 2018.

It’s now trading well over 6,000 points again.

I suggested this outcome at the start of the year in my ‘Three Wild Predictions for 2019’report.

It’s on the Profit Watch website if you haven’t seen it yet.

The market priced in those lousy GDP figures long ago.

Investors have bought the market back up. The weight of money suggests you don’t need to concern yourself with the latest economic data.

It’s that simple.

This is not even the most important point.

You don’t invest or speculate in the Australian ‘economy’.

You take a position in specific businesses and industries.

Consumption growth may indeed be weak in Australia because of poor income growth.

But if you’re looking for stock ideas around Australian retail, I suggest you start focusing on more exciting industries with much brighter outlooks.

I can tell you with complete confidence that there are enormous growth opportunities in front of every investor in the world right now.

Consider the following…

  • 5G: The biggest telecommunications rollout in history.
  • Cannabis: A global industry at the very beginning of a likely decade-long surge. 
  • Artificial intelligence: Possibly the most disruptive and productive development of all time.
  • Robotics: A huge outlook from ageing populations around the word.
  • Blockchain and cryptocurrencies: These aren’t going away. Capital and development continues here on a significant scale.
  • Natural resources: Huge shortages are developing in many key commodities because of underinvestment over the last decade.

I could go on. You get the point.

Please — do not waste your time focusing on general worries and problems. Markets climb these.

Granted, not all of these themes are best accessed in Australia.

It might mean buying a US stock. Is that really that hard?

Okay…you need more proof.

Consider the following…

Profitable moves happen all the time

There is a stock on the ASX called Appen [ASX:APX].

On 24 December, the stock closed at $11.94.

Look at what it’s done since…

Source: Optuma

Yep — it’s doubled in price.

Let me stress that I neither recommended this or traded it for my own account.

But here is perfect proof of a profitable stock that presented itself over the last two months — regardless of Australian GDP.

There are stocks on the ASX that don’t even operate in Australia. The economy is irrelevant to them from start to finish.

It’s much better to spend your time hunting for opportunities like this than listening to the latest round of useless drivel from the mainstream.

It does involve more work than picking up your daily newspaper.

Obviously, you need to study industries and potential catalysts that can drive a stock like Appen higher.

I haven’t had the time to take a good look at it lately. I was never going to catch that move.

The market never gives you something for nothing. 

But there are so many opportunities like this. They present themselves every day, and in many different ways.

I keep banging the same drum. There are so many opportunities in the market.

Granted — perhaps I’m wrong. Perhaps eventually the stock market does begin to weaken if the economy significantly deteriorates.

What’s stopping you from using shorting strategies and turning this into a profitable opportunity?

I still have my eye on Qantas Airways [ASX:QAN] as a possible short if oil gets out of hand. Time will tell.

Mainstream headlines are never going to be helpful to you or me.

They are reactive. They tell us what has happened. If anything, your instinct should always be positioned to the other way.

That will generally stand you in good stead. It can feel uncomfortable and lonely out there. Nobody said it was easy.

I’ll keep saying the same thing: There are still a lot of stocks with big upside. Go here for my top five right now


Callum Newman Signature

Callum Newman,
Editor, Profit Watch