Rudi’s View: Bigger Picture – Trends

Always an independent thinker, Rudi has not shied away from making big out-of-consensus predictions that proved accurate later on. When Rio Tinto shares surged above $120 he wrote investors should sell. In mid-2008 he warned investors not to hold on to equities in oil producers. In August 2008 he predicted the largest sell-off in commodities stocks was about to follow. In 2009 he suggested Australian banks were an excellent buy. Between 2011 and 2015 Rudi consistently maintained investors were better off avoiding exposure to commodities and to commodities stocks. Post GFC, he dedicated his research to finding All-Weather Performers. See also "All-Weather Performers" on this website, as well as the Special Reports section.

Rudi's View | Jul 13 2017

By Rudi Filapek-Vandyck, Editor FNArena

The below is merely a philosophical exercise, but one that hopefully plays a contribution in investors' ongoing quest to devise the best strategy for optimal investment returns in the years ahead.

All investors, no matter their age, level of experience or specific goals and mandate, like to think they are making decisions today for the long run. But in all cases shorter term considerations play an influential part.

So here's an attempt to keep things simple, devoid from short term noise and with lots of room to take different angles and opposing views and predictions.

Something to think about.

Below are four longer term price charts which I believe show the three key trends for ASX-listed stocks; the long term sustainable uptrend, the sideways pattern, and lastly, the downtrend channel. The latter is represented by two charts; one that is showing a rally from the bottom and one that is not.

As the old saying goes, a five year old child should be able to answer the most basic questions about each of these charts. For adults, theĀ advice is KISS, otherwise known as Keep it simple, stupid! To make it easier to focus on the underlying dynamics, all charts show monthly price movements.

Also, to avoid early mental bias when looking at these price charts, I have removed specific company information. Instead, readers can find the names and stock codes of the companies shown at the bottom of this story. Don't look now. The info will still be there by the time you reach the final chart.

Let's start with theĀ long term sustainable uptrend, which looks as follows:

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