When I was a youngster with long, blonde hair – yep, there was a time – there were two surf clubs and two surfer clubs at the iconic Bondi Beach. There was Bondi Surf Life Saving Club, allegedly the oldest club in Australia (but Bronte takes issue with this). And there was my club, North Bondi, where I was the youngest patrol captain ever and where one of my patrol members was an equally young Malcolm Turnbull!

At the other end of the beach were two ramps: one was for the Wind & Sea surfers and the other, I think, was called the East Coast ramp.

Anyway, Charlie (Aitken) unlocked these memories for me when he wrote about his East Coast recovery in the Switzer Super Report this week.

So, anyone doubting this bull market has to get a dose of Charlie – Bell Potter’s champion of the East Coast cyclical recovery. In a nutshell, he argues that the combined effect of rising house prices, especially on the East Coast of Australia and the share price rally, will have a wealth effect that will translate into higher consumer discretionary spending. This has been a missing piece of the puzzle for the Oz economy since the GFC. And, if it follows Charlie’s script, there will also be US, Chinese, UK, Japanese and maybe (and only maybe) some European reasons for a stronger global economy to help keep pushing up stock prices.

He also challenges the belief, which I’ve also questioned, that older Australians are going to become hoarders and non spenders. He cited his dear old Dad, saying: “Apparently now, because we have an ageing population, nobody is going to spend any money. Well, my father is 76 and he’s a pretty good spender, as are all his friends!”

I’m in the ‘2014 will be better than you think’ camp with Charlie, and it makes me confident we’ll see 6000 on the S&P/ASX 200 next year, and even a bit more. In my column in today’s Australian newspaper, I have listed all the good economic readings out there right now, but, on my show during the week, HSBC’s Paul Bloxham said I had to worry about the lower mining investment figures hurting our overall economic growth numbers.

However, that led me to the conclusion, which I also ran during my speech yesterday at the Queensland Reds Business Breakfast in Brisbane, that we might need to look at a non-mining snapshot of economic growth to get a better understanding of what’s going on in the wider economy.

When we talked about a two-speed economy, the miners were doing so well it masked how badly the retailers, farmers, tourist operators and education businesses might have been doing. That’s why I kept arguing that the RBA was getting interest rates wrong – the economic growth numbers over 3% were misleading!

What I liked this week

• The A$ price of iron ore at $146.25 and the oil price sliding, which is great for inflation.
• Blackrock, the world’s biggest fund manager, going long Fortescue and the company paying back debt two years early.
• Joe Hockey’s performance in Parliament – he’s growing in stature. When you become Treasurer, if you’re not dumb, lazy or too political, you can become (just like Keating and Costello) a master blaster of the Opposition because you know so much stuff.

Charlie’s Angels

Here are some of Charlie’s heavenly stocks, leveraged to his East Coast recovery story.

He’s building with CSR, Boral, Bluescope, GWA and even EDI Downer. He‘s shopping at Woolies, JB Hi-Fi and RCG stores, such as Athlete’s Foot.

He’s shocked and ‘ored’ over Fortescue and putting his not-so-hard earned in Bendigo Bank – not for safekeeping but to grow his wealth.

An interesting stock

On my show on Thursday night, Simon Bond talked up a stock called Webster Ltd, which is in the vegetables and nuts game and could be a company that could benefit from the dining boom that should replace the mining boom. I liked knowing that Chris Corrigan is on the board and a shareholder. I’m not pushing the stock but it might be worth a bit of homework.

Success breeds success

I have to say the Red’s breakfast partly explained why Queensland gets sport right and why NSW is often clobbered in rugby and rugby league by the northerners. They look unified, committed to winning and they look like winners.

The only time I’ve been invited to a Waratah’s function was when Glen Boreham was the boss of IBM Australia, so he invited me, not the Waratahs. My business has sponsored Easts Rugby for years, my son Marty is on the board and we had no contact from NSW Rugby – and that says a lot.

Les Brown once noted “that there are winners, there are losers and there are people who have not learned how to win.”

The Waratahs have a good new coach in Michael Cheika but he needs the organisation’s support. Yesterday’s Reds breakfast was hosted by Wallaby legend Tim Horan, who now works for Westpac, and other legends such as Daniel Herbert were involved. It was a great vibe – a winning vibe.

So, why talk about this today? Apart from hoping the Waratahs can learn from Queensland, learning from winners is what the Switzer Super Report is all about.

One final point. Malcolm has become a great contributor to the North Bondi Surf Club. If you ever go to the beach, check out the new clubhouse he was right behind.

Top stocks – how they fared

Numbers that moved the market

19 million – that’s the number of hits the website selling tickets to Sachin Tendulkar’s 200th and final test match saw in the first hour tickets were live. Wankhede Stadium, where the match is being played, has a capacity of 32,000, and only 6,000 tickets are available to the public.

Consumer confidence remained strong in November according to the latest Westpac Melbourne Institute survey. Sentiment increased by 1.9% from 108.3 in October to 110.3 in November.

Interestingly though, there were weak wages numbers this week. Wages rose by a seasonally adjusted 2.7% YOY in September, barely outdoing inflation over the same period. The interesting part is that, despite the mediocre wage increase, consumers are still optimistic – I think this is a good sign.

The week ahead

Australia
November 19 Reserve Bank Board minutes
November 20 Speech by Reserve Bank official
November 20 Imports of goods (October)
November 21 Speech by Reserve Bank Governor
November 22 State accounts 2012/13

Overseas
November 18 US Net capital flows (September)
November 20 US Consumer prices (October)
November 20 US Retail sales (October)
November 20 US Existing home sales (October)
November 20 US FOMC minutes
November 21 Flash manufacturing survey (US, Europe and China)
November 21 US Producer prices (October)
November 21 US Philadelphia Fed survey

Not a whole lot of economic indicators around the corner in Australia this week, apart from the minutes from the Reserve Bank’s cup-day Board meeting. The interest rate was left flat at 2.5% because the low rate is seen to be helping get the economy back to where we want it to be. I don’t think rates will start climbing again for another 12 months or so, but it will be interesting to see what discussions went on in the meeting.

On Thursday, Reserve Bank Governor, Glenn Stevens will give a talk on the 30th anniversary of the floating of the Aussie dollar. This is particularly timely as, despite falling from almost US$1.06 earlier this year, many investors would be happy to see it come down further still.

Abroad, we’ll see flash manufacturing estimates for the US, Europe and China as well as the minutes from the US Federal Reserve’s last meeting, plus the influential US Philly Fed survey, which asks manufacturers about general business conditions.

Calls of the week

Janet Yellen, the nominee to be the next chairperson of the US Federal Reserve, made the call to continue to support quantitative easing. The comments saw US markets head to fresh new highs.

Kevin Rudd’s call, as he distinctively put it, to ‘zip’ from politics for good. As always in these occasions there was good sportsmanship from both sides of politics. However the most noteworthy quote came from Tony Abbott, when he said, “sooner or later everyone outlives their usefulness”. You can watch Kevin’s resignation and all the key responses here.

Still in parliament, Clive Palmer had some wise words to give just hours after being sworn in as an MP. The speech seemed to have wisdom beyond his time — and it turns out it did. His speech seemed to have a remarkable resemblance to one JFK gave over half a century ago.

The banks may have rallied hard this year, but there is still value for the SMSF investor looking for good dividend flows, according to James Dunn. Read the story here.

Last week’s TV roundup

To share with me his the tricks of the trade on how to stand out from the crowd and provide great customer service, I spoke with Martin Grunstein on Super TV.

Bell Direct’s Julia Lee joined me to give her view on the stock market and the economy, and to tell us where she is investing.

The current booming property market has been fuelling a housing bubble media storm, but is there any truth to the matter, or is it just a scare campaign? I caught up with Kim Hawtrey, associate director at BIS Shrapnel to discuss.

Stocks Shorted

ASIC releases data daily on the major short positions in the market. These are the stocks with the highest proportion of their ordinary shares that have been sold short – which could suggest investors are expecting the price to come down. The table also shows how this has changed compared to the week before.

A subscriber wrote in this week asking for an explanation of what these numbers actually mean, you can read our response here.

Again it was a relatively steady week with not a great deal of movement. News Corp saw the biggest jump going from 8.41% to 9.69% short, while Cochlear enters its eighth week as the stock with the greatest percentage of shares sold short.

My favourite charts

This chart show what Cochlear’s share price has done over the past 7 weeks while it has been the shortest stock on the market. It shows that the shorter’s move could be paying off.

Aussies didn’t seem to notice the weak gain in wages over the past year, as confidence continued to hear north.

And finally, the S&P 500 continued its run into dizzying new highs this week. Now it’s up to us to catch up!

Top five clicked on stories of the week

James Dunn: Which Banks are still a buy?
Peter Switzer: Could a correction be KO’d by a market melt-up?
Rudi Filapek-Vandyck: Buy, Sell, Hold – what the brokers say
Ron Bewley: Why I’m changing my sector allocation
Charlie Aitken: Get your head out of the sand on CBA

Last week’s Switzer Super Reports

Thursday, 14 November 2013: Animal farm
Monday, 11 November 2013: Steady as she goes