IN 1998 the Asian crisis ensured companies in Australia selling goods or services to Asia and with markets in Asia suffered the brunt of the gyrations therein.
The domestically-based companies, on the other hand, provided a level of return far superior to those.
What is the situation in 1999 to date? The table from the experts at BNP Equities gives an interesting perspective on the start of this year.
Companies with exposure to the domestic service economy substantially outperformed others in January.
However, in February sectors with earnings sensitive to the local business cycle, such as diversified industrials, engineering and chemicals, performed well while banks, telcos and retailers slipped.
The art of the good trader is to identify the sectors that will outperform in the next few months and be positioned to those.
It would seem, given the relative change in outlook for our economy, it would be those companies with a domestic viewpoint that will be the stronger performers.
