Leading Australian stockbroker and writer Marcus Padley has made a name for himself by not pulling punches. And so he doesn’t here, stating from the outset that the investment game is fraught with risk, and that, really “you shouldn’t do it… you’re probably better investing your time elsewhere”. But what’s life without the occasional punt, especially if you’re attempting to grow some wealth? It sure beats feeding those musical money-suckers in the backroom of the pub. Despite Pedley’s initial words of warning, we’ve managed to wrangle some strong advice on the areas to keep an eye on. And by that we mean dabble in.
As much as we may be in denial about our spreading crow’s-feet, Australia has an ageing population. That means more retirement and funeral homes, health insurance and providers.
If people are paying 9.5 per cent into their super fund, the super industry is growing at 9.5 per cent as a base line. In a world where there’s little growth, that’s an attractive figure.
That is, cloud technology, because it’s “only going one way,” says Pedley. That means telecommunications service providers like Telstra and NEXTDC are in good shape.
Remember China’s baby formula fiasco? It drove an unprecedented spike in Australian sales of the powder. But that’s nothing compared to what could happen once the Chinese middle class starts demanding services. If there’s even a marginal demand for Aussie products, the company manufacturing them will grow. So, look at companies such as Blackmores and Bellamy’s – medicinal manufacturing and canning respectively.
“A massive growth area,” says Pedley. The number of international students in Australia is growing at around 10 per cent per annum, meaning the industry has a built-in 10 per cent growth rate. You do the maths.
This is a big one. Owing to smartphones, electric cars and our predominantly multi-gadget lives, the price of lithium carbonate, a key ingredient in the production of Li-on batteries, has jumped by more than 40 per cent in a year. Tidy.