Top Biz News
Investment guru predicts full recovery by 2014
By Andrew Moody (China Daily)
Updated: 2009-10-19 08:57
Daryl Guppy, the Australian investment guru, believes it could be only four years before the world economy achieves a full recovery.
The 55-year-old, who makes regular appearances as a pundit on CNBC's Asia Squawk Box and is famed for his trademark walrus moustache, recently was on one of his many visits to Beijing.
He said that he believes the world economy will have put the Great Crash of 2008 firmly behind it by 2013 or 2014.
"It takes a long time to recover after losing lots of money and dissipating generations of wealth. Although the market itself may appear to be making major gains at the moment, that growth is not evident in the non-stock market economy, " he said.
Guppy said the recovery this time will be quicker than with other financial calamities of the 20th century.
He said the Dow Jones Index did not again reach the highs of 1929, the year of the financial crash that led to the Great Depression, until 1954 -- a quarter of a century later.
Following "Black Monday" in 1987, when the world's stock markets went into free-fall, it was nearly a decade before NASDAQ began to hit new heights.
"Technology has had a significant effect on the speed of recoveries and the ease now with which capital can flow internationally to where it is needed, " Guppy said.
"In the old days, where you had dual-listed stocks on the London and Australian exchanges, it used to take four to five weeks for typical certificates to move between Melbourne and London. Now such processes are done in an instant," he said.
In the book, he applies the 36 Chinese political and military strategies derived from the famous text to trading in the modern environment.
Guppy said its purpose is to demonstrate, like the ancient work, that trading is not all about the blood of battle represented by the cut and thrust of daily trading, but the philosophical and psychological basis behind market activity.
"If you take a broader philosophical understanding of the market, it can help you recognize what is happening so you can develop better solutions," he said.
Guppy takes a particular interest in the Chinese markets and has been closely observing the Shanghai Composite Index, despite the exchange not being open to foreign investors.
He said he believes the current rally from its low last October of 1,664 points to 2,978 points on Oct 16 is far from a bear market rally He is confident that it will return to its 2007 level of 6,000 in the future.
"We are not going to get there today or the day after. I think also the speed of getting there is going to be steadier. And that means when it gets to that level, it is going to be more stable than last time," he noted.
Guppy is based in Darwin in the Northern Territories in Australia but spends several months a year in Beijing and Singapore.
He is founder and director of Guppytraders.com, an international financial market education and training organization.
