Charlie’s big bull market call


The ASX has just capped its fourth week of gains. The stock market bulls charging, including one proclaiming the end of the 5 year bear market.

The Australian investing community is abuzz opinions about Charlie Aitken’s big bull market call.

The man from Bell Potter boldly and confidently predicted the start of the next bull market, saying…

“…the stars are aligned for the five year bear market to end as we get confirmation this month about the strength of Australian corporate earnings and sustainable dividends.”

He might be right. In any case, I admire his optimism and conviction.

The Australian economy might feel like a struggle, but reality is very different.

Unemployment is low. Interest rates are low. Inflation is low, and contained. Even Australian house prices have enjoyed a surprise rise in the second quarter, the first increase in more than a year.

There’s little the mortgage-belt, and the small army of DIY property investors, enjoy more than rising house prices.

Abroad, the U.S. economy is recovering. Jobs are being created. Bloomberg reports that home prices rose in 75% of U.S. cities in the second quarter.

In China, inflation has slowed for a fourth month, seemingly freeing the People’s Bank of China to aggressively ease monetary policy.

Charlie Aitken  suggests BHP Billiton (ASX: BHP) is as good a bet as Telstra (ASX: TLS) was at $2.60 — the country’s leading telco now trades at $3.80

Leading fund manager Perennial sees strong valuation upside in the banking sector, holding overweight positions in Westpac Banking Corporation (ASX: WBC), ANZ (ASX: ANZ), National Australia Bank (ASX: NAB) and Bank of Queensland (ASX: BOQ).

Maybe Aitken is right…the stars are aligned. We just might be looking at them from the wrong angle.

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Motley Fool General Manager Bruce Jackson has an interest in Westpac, ANZ, NAB and Telstra. The Motley Fool‘s purpose is to help the world invest, better. Take Stock is The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it’s still available. This article contains general investment advice only (under AFSL 400691).

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