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Straight talk from the doctor

I AM usually hesitant to go and hear economists speak.

Perhaps it is because we are bombarded by news about the economy.

Or perhaps it’s because few of these boffins talk in language suitable for the layman.

Don Stammer is one I always make the effort to see, and I always come away from his amusing talks with some clear messages in my mind.

Dr Stammer, for instance, reckons Australia’s well-run economy has changed the way we react to the world, and it to us. In the past, when the world sneezed, we caught a cold.

These days, when the major markets are in strife, we are a defensive safe haven. Be aware of that and you could make some money, he tells us.

And Dr Stammer believes we do have to be more aware of things like that. With low inflation and a stable economy, it will be much harder to achieve the double digit capital growth that share and property investors have enjoyed in recent decades.

Instead, average share returns are likely to be around 8 per cent. To get bigger returns, investors will have to be smarter, or at least their fund manager will have to be.

As for Australia, Dr Stammer also believes currency fluctuations reflect capital flows, not the fact that our economy is commodity based.

So, tipping a big rise in the US economy, the economic guru suggested the improvement in the Australian dollar would be anaemic.

Then again, the last time he bet on the currency Harold Clough took him for a bottle of wine.

For what it’s worth, the good doctor backed up my theory on the overwhelming amount of economic data we are getting.

“There is more business and economic coverage in the media than sport – except in Melbourne,” he told us at a packed Australia-Israel Chamber of Commerce function this week.

Not that this is a bad thing. It was only a few years ago that many important stories were relegated to the back pages because they weren’t deemed interesting enough.

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