5 July 2020
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Some of my journalist mates and those ‘expert’ investment experts, who always play the doom-and-gloom card, really need to get a life.

I feel sorry for tough job workers and pessimists!

Peter Switzer
2 December 2016

By Peter Switzer

Some people have a shocking job. Road workers laying bitumen on 30 degree plus days have it hard. Being a cop at drunken events on New Year’s Eve would be tough on two levels — dealing with drunks and working on that night.

When I used to captain the patrols at North Bondi Surf Club (when Malcolm T was in my patrol), doing it on Christmas day was purposeful but tough!

Clearly, there are a lot more examples out there and my heart goes out to those who wouldn’t think of taking welfare but prefer to work, no matter the hard-to-take nature of the job. These people inspire me.

However, some of my journalist mates and those ‘expert’ investment experts, who always play the doom and gloom card, really need to get a life.

Sure, I know the media does specialise in scary stuff and psychologists tell me that we, the consumers of media, have some death wish love of bad news stories. Yep, some Canadian academics, Marc Trussler and Stuart Soroka of McGill University, have made a study of it and they argue that we latch on to bad news because on the whole, we think the world is rosier than it actually is!

“When it comes to our own lives, most of us believe we're better than average, and that, like the clichés, we expect things to be all right in the end,” said psychologist Tom Stafford talking about the Canadians work on the BBC. “This pleasant view of the world makes bad news all the more surprising and salient. It is only against a light background that the dark spots are highlighted.”

Okay, this might make an excuse for my over-negative mates in the media but I still feel sorry for them.

The law of magnetism means if you spend your life looking for negativity, guess what will come your way? Yep, you’ll get a truckload of negativity!

Yesterday, my wife wanted to do something unusual — send a letter! We were off on our daily long walk and she was holding her letter. Now because we don’t send letters much anymore and we were walking in the opposite direction to the Post Office, she said: “Keep your eye out for a letter box.” I have to say it was like stepping on to the set of Back to the Future.

My mind started pondering: “A letter box? A letter box? When did I last see one of those away from the Post Office?

Then it struck me. Literally 200 metres from our front door was one of those red letter boxes, made of metal like a box with a round top and a big red wheel on its door. It was 200 metres from my front door! I walk past it nearly once a day and drive past it at least three times a day!

How do I miss it? That’s easy, I’m not looking for it. In fact, when we ‘surprisingly’ found the box, I told my wife about a story I read about the Law of Magnetism and how if someone buys say a black Volvo, then all of a sudden they see other black Volvos. Of course, black Volvos and the like are always there but because you now have one yourself, you’re programmed to see others.

As I gave this example to my wife, we walked around the corner and there was one car in the laneway and it was, you guessed it — a black Volvo. How spooky is that?

So why all of this?

Well, yesterday, in case you missed it, we got a disappointing business investment number. As the nation’s resident economic optimist (I do have a few fellow travellers but not as many as I’d like in the media and the economics fraternity), I’ve had a lot of good news, so a bad number was overdue.

Also, this came out of the September quarter and our long election campaign and the disappointing result was no help.

But let’s not make too many excuses, though it wasn’t all bad. Of course, a media mate, who I always check out when good and bad news happens, jumped on it this morning — he’s magnetically programmed to see it and write about it. Surprisingly, he misses a lot of positive stories. Funny that.

So what was the story? Let me sum it up:

  • New business spending on buildings and equipment fell by 4% in the September quarter but a 3% fall was expected because the mining sector is still cutting back on spending.
  • Spending on buildings fell by 5.7% in the quarter, while spending on equipment fell by 1.9%. This is understandable, with media outlets continually talking about apartment oversupply, and I have just contributed to that negativity. Doh!
  • Investment is down 13.7% over the year; but
  • The fourth estimate for investment in 2016/17 is $106.9 billion, up 1.7% on the third estimate but down 14.3% over the year. Over the last six months, investment expectations have lifted by 17.1%, which is a good thing for the year ahead.

So in a year when the stock market was decimated in January and February and no one would have expected the likes of BHP-Billiton to see its share price drop to $14, where there was stress about inflation becoming deflation and the Prime Minister opted for the longest election campaign in living memory, where Donald Trump was scaring the world and some morons were tipping a US recession, investment in Australia fell. Well, fancy that.

This is how CommSec’s Craig James saw some good in the numbers: “However, the main good news or rather glimmer of hope was the lift in expected investment plans compared with last quarter. The fourth estimate for 2016/17 is $106.9 billion, up 1.7 per cent on the third estimate (June quarter). In addition investment plans have lifted substantially in the past six months, up by 17 per cent.”

The last line is the one that augurs well for 2017 — investment plans up 17%.

So, after two quarters this year where we grew over 3%, which put us at the top of the growth table for Western economies, we could see a 2% number next week and these investment numbers will be a part of the story. However, given these 17% increased investment plans are pre-Trumpomania, I bet that a weaker number will show up next week for the September quarter, the December quarter will be a little bit better and the ensuing quarters over 2017 will be more positive than negative.

We have gone 100 quarters without a recession and this year we will break the record for growing without two quarters of negative economic growth, which officially defines a recession.

My mate won’t celebrate it but I will — you can bet on that.

And before I go, the Law of Magnetism seldom lets me down and I just saw these two pearls of positivity:

  • The Performance of Manufacturing index in Australia rose by 3.3 points to 54.2 in November. A reading above 50.0 indicates that the sector is expanding. Can you recall people talking about manufacturing being dead in Oz?
  • China-doubters/haters also had to deal with the purchasing managers index for manufacturing over there, which rose from 51.2 to 51.7 in November, while the services gauge rose from 54.0 to 54.7 in November.

There’s still plenty of good news out there, if you go looking for it. And you know I will. One day, I will have to turn negative because the economic facts tell me to. However it’s not now, not now in Trump world!

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