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IMO you cannot apply the investing criteria to stocks in Oz - although a number of people have tried. In my experience our markets are far too small to be able to adequately invest ones money comfortably on the knowledge that long term, the shares are too double and that dividends are assured! Whilst it has been proven that the blue chips do usually double over 10 years there are a number of actions which have prevented me from investing Foolstyle!

1: The share market traders ride the blue chip dividends to hell and back. The ones with the money pick the eye teeth out of the high dividend returners and buy in - around 30 days prior to dividend date with a moderate share price and force the price of the shares higher and then 15 days thereafter sell out on a declining market as everyone wants to get out.

These people are not interested in capital gains alone but the franked dividend! They are quite happy to buy enmasse and sell enmasse which has a dramatic effect on the share price fluctuations of our major companies. Why? - because there are too few major blue chip companes which have enuff shares and a large public investment base. This means that the share price is exaggerated through cycles of dividend mania by these raiders. The ordinary share investor is not familiar with the gyrations caused by these raiders and therefore their perception of what is a good or bad share price is affected accordingly and they buy in at the wrong time and sell at the wrong time. They always sell the winners and hold on to the loosers for fear of the loss that comes from any sale. Herein belies the uncertainty in their mind of investing as the new IPO's (floats) most probably give them a sense of well being and they then go and play the rest of the market in the same vein! Bad luck!

2: The aussie markets are entirely different to the Dow with the majority of Blue Chips giving franked dividends, rather than capitalised growth earnings. Herein is a problem as the world markets are dictated to by the US markets (Dow, S&P and Nasdaq). Any hic-up on the US markets is a fundamental flaw in the system as the Oz market follows suit the next morning.

Our market players are dictated too by the gyrations in the US - when there is nothing to compare between the two exchanges and those companies listed on the exchanges. Fair enuff if it is an even playing field but it is not. Our blue chips are SMALL in relation to the US and world markets and our investor base ... well 18 million in the total Oz with about 1.8 million of these citizens investing very small amounts and the insurance companies and banks doing the majority of investing - against 180 million in the US with the mutual funds and superannuation entities .... hmmm think about the size and number and why we are an insignificant pimple on the face of the world markets.
Not only is the capitalised investments in the Oz market a small amount the Oz dollar is the least traded currency on the world markets and therefore is subject to heavy gyrations - conjecture and shorting from time to time. We will never suffer the fate of the Thai or Malaysian or Japanese currency as the quantities traded of the Oz dollar are in too small tranches leaving players easily exposed!

3: Our degree of systematic risk is far too great. We are reliant on exports to survive. We are subject to the world economic blunders whether it be the US, Japan, Europe, South America or Asia. Our income is subject to too many political instabilities whether through US tariffs or subsidies, China's overproduction, South America's dumping, Europes mis-management of the Euro and their internal inflation, Russia's heirachies greed, Japan's inability to grow moss under the mushroom, Korea... the list goes on. We are as insignificant in trade as we are in overall population.

Basically if it wasn't for sport we would have been forgotten a long time ago!
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