While broker land remains obsessed with miners and banks, and rotations between the two, as Australia enters its great adjustment the real winners are the dollar exposed industrials, which are all sailing along with fantastic year-to-date returns, as forecast.
Meanwhile, dollar-exposed miners are hitting new lows:
Banks have done well too but remain hugely over-valued and exposed to Australian demand risks.
It’s worth noting in brief why brokers tend to oscillate between the two major sectors. Most of their institutional clients are relative return index-hugging fund managers. That means that if they get the rotation between the two major sectors right then they will outperform the ASX and get their bonus. If the ASX falls 90% and their fund only falls 80% then that’s a big win.
Yes, it’s whacky, but heh, that’s super, the super of the future.
