The first week of the new financial year has ended and everything seems right with the world.
The Australian stock market closed just short of a record high, there are several multi-billion dollar takeovers on the boil, a surfie who designed a cool Billabong T-shirt is about to pocket $115 million in the biggest float of the year, day traders have returned to the market and the courageous punter and Mr Packer have discovered a new investment plaything.
The reason for this serendipity could simply be that it is July - traditionally the most optimistic of months, when markets historically have more ups than downs.
The other reason is that after the great dot.boom and the great dot.bust, order has been restored.
The new economy still exists, but it is learning to play and be valued under old economy rules, which is to say that if you have a business, it needs to generate cash to survive.
Old economy stocks are moving onwards too. They are beginning to understand how to make the new economy work, and it could save them a lot of money.
During the week, 14 of Australia's biggest companies announced they had clubbed together to establish an internet-based ordering and distribution system called CorProcure. It is an awful name that betrays the origin of the idea in the stuffy boardrooms of Melbourne.
But this same idea from these same classic old-economy companies will save the group several hundred million dollars by cutting procurement costs up to 8 per cent.
The idea is reportedly the brainchild of BHP and Foster's Brewing, and includes Melbourne club companies such as Amcor, ANZ, Australia Post, Coles Myer, Pacific Dunlop and Telstra, with CC Amatil, Qantas, Goodman Fielder and Wesfarmers providing a national flavour.
It is the sort of deal that heralds the future growth of the internet. While e-commerce specialists such as Amazon.com struggle to make money, pursuing avenues of growth and cost savings is restoring the credibility of the old blue chips.
The All Ordinaries is just short of its record high largely because most blue-chip stocks have recovered. Woolworths, which broke through the $20 billion sales barrier last week, is now valued nearly as much as Coles Myer, BHP and AMP are more than 20 per cent off their lows and banks are trading at or near their highs for the year.
Day traders and punters need not despair. The mapping of the human genome has created huge interest in biotech stocks.
The 14 ASX stocks which call themselves biotechs have all recorded huge gains in the past few months, some more than doubling in value and most gaining more than 50 per cent from their year lows.
Several of the stocks are already substantial companies. CSL has been an excellent performer since the former Commonwealth Serum Laboratories was privatised by the Federal Government five years ago.
Last month, it announced the $900 million purchase of the Swiss Red Cross plasma group ZLB. That makes CSL one of the biggest groups of its kind in the world. It also makes money, so when investors pushed its market value up 50 per cent to around $5 billion after the ZLB deal, they did so with some confidence.
It is now a top-30 company with a whopping price/earnings ratio of around 88 times, but at least it has earnings.
Most biotech stocks do not. Their fortunes are dictated by the ability of their management to conduct effective research, marshal cash reserves and, ultimately, gain approval for their products from the Food and Drug Administration.
Take Biota for example. Its shares are up 36 per cent from its year lows of 250c. But it has also peaked around 750c on great expectations about the ability of its flu drug to make inroads into the US market.
Alternatively, it can attract the attention of the likes of Kerry Packer. His two biotech playthings, Circadian and Axon, have shot up in recent weeks, although they are not a great deal above the level they were a few months ago.
The biotechs have already had their ups and downs. Their latest surge has even been labelled bio.com. That should be warning enough.
<i>Sydney view:</i> July serendipity follows return of the established order
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