One of my favourite financial writers is Vic De Klerk who writes for FinWeek, among others. He wrote a very interesting article in the latest FinWeek which I thought I would share with you.
He reckons that the ALSI will not recover to its high of 32 000 in the next 20 years! That’s quite a statement!
He says that it wont recover unless the share prices of the heavyweights at least doubling or rising 200% or 300% from current levels. He says that can only happen if “we again have a runaway demand for commodities, as was the case six months ago”. He says “that runaway demand was in turn the result of the best five year growth period ever in the world economy.”
He goes on to say that “in Japan, after two decades, the Nikkei hasnt come anywhere near its previous peak”. He says that in SA the same will happen if resource shares don’t rise sharply again, like they did 5 years ago
