Life In Australia

The Aussie stock market reached a new record high last night, and my paltry 3.3 percent capital gain over the last six-and-a-half months is slightly less paltry now, at 4.9 percent – giving an annualised return of around 9 percent. Much more encouraging than the position on Friday afternoon of 6 percent annualised.

I don’t normally rush to check stock prices each day, but given the market had hit a new high, I thought I’d have a quick peek. So all I need over the next few months is another few percent gain and I’ll have comfortably beaten any return I could have got from an interest-bearing security.

As of the close of the ASX on Monday afternoon, prices were:

• Compass Resources CMR at $5.13 per share
• BHP Billiton BHP at $31.18 per share
• Oxiana OXR at $3.30 per share
• Kagara Zinc KZL at $6.18 per share

I thought it was about time I updated my stock market activity. In May last year I wrote about how I had grown $100,000 to $373,800 in a year by investing in mining stocks.

After that I got cold feet and took my cash out of the market, missing out on more tidy profits. I’d been reading Martin Zweig’s Winning on Wall Street and I was concerned about having a lot of cash in the market while interest rates were rising.

On the other hand, watching prices continue to rise was irritating. Furthermore, the Chinese economy, which in large part is responsible for the mining stocks’ boom was continuing to grow at a ferocious rate. I decided to go back into the market, taking heed of Zweig’s advice not to commit all of my funds because of my uncertainty about the effects of interest rates on the stock market. I decided to do as I had done before and invest $100,000 into the same four ASX stocks – I did this on November 2 last year. I bought:

• Compass Resources CMR at $4.52 per share
• BHP Billiton BHP at $27.31 per share
• Oxiana OXR at $3.22 per share
• Kagara Zinc KZL at $6.90 per share

As of the close of the ASX on Friday afternoon, prices were:

• Compass Resources CMR at $5.00 per share
• BHP Billiton BHP at $30.71 per share
• Oxiana OXR at $3.24 per share
• Kagara Zinc KZL at $6.18 per share

Overall that’s a 3.3% gain, or 6% annualized. I’d have been as well keeping the money in the bank. We’ll see how things pan out over the next few months.

Well, yesterday it was doctors and nurses that Queensland wanted – today there’s good news on the construction front.

Leighton / Abigroup have been chosen as the preferred tenderers to build Brisbane’s $1.88 billion motorway upgrade and the new Gateway Bridge.

Construction work should begin by the end of the year. The builders are going to build a new Gateway Bridge 50 metres east of the existing bridge and upgrade 20 kilometres of the Gateway Motorway between Mount Gravatt and Nudgee.

More than 5,000 jobs will be created during the four-and-a-half year construction period. The government is estimating a flow-on into the local economy of $450 million in wages and salaries.

To help meet the cost of the project, tolling on both the new and existing bridges will continue for 30 years after the works are completed.

In 2011, the toll to use the bridge – collected electronically – is expected to be $3.10. rather than the $2.20 if the Federal government had supported the project.