Pete Wargent blogspot

Co-founder & CEO of AllenWargent property advisory, offices in Brisbane (Riverside) & Sydney (Martin Place) - clients include hedge funds, resi funds, & private investors.

4 x finance/investment author - 'Get a Financial Grip: a simple plan for financial freedom’ (2012) rated Top 10 finance books by Money Magazine & Dymocks.

"Unfortunately so much commentary is self-serving or sensationalist. Pete Wargent shines through with his clear, sober & dispassionate analysis of the housing market, which is so valuable. Pete drills into the facts & unlocks the details that others gloss over in their rush to get a headline. On housing Pete is a must read, must follow - he is one of the better property analysts in Australia" - Stephen Koukoulas, MD of Market Economics, former Senior Economics Adviser to Prime Minister Gillard.

"Pete Wargent is one of Australia's brightest financial minds - a must-follow for articulate, accurate & in-depth analysis." - David Scutt, Business Insider, leading Australian market analyst.

"I've been investing for over 40 years & read nearly every investment book ever written yet I still learned new concepts in his books. Pete Wargent is one of Australia's finest young financial commentators." - Michael Yardney, Australia's leading property expert, Amazon #1 best-selling author.

"The most knowledgeable person on Aussie real estate markets - Pete's work is great, loads of good data and charts, the most comprehensive analyst I follow in Australia. If you follow Australia, follow Pete Wargent" - Jonathan Tepper, Variant Perception, Global Macroeconomic Research, and author of the New York Times bestsellers 'End Game' and 'Code Red'.

"Pete's daily analysis is unputdownable" - Dr. Chris Caton, Chief Economist, BT Financial.

Invest in Sydney/Brisbane property markets, or for media/public speaking requests, email pete@allenwargent.com

Friday, 20 January 2012

Aussie dollar flying high...STILL.

Who remembers when a single British pound bought 3 Aussie dollars?  I do!  Everything in Australia just seemed so cheap back then, as a Pom it was a veritable pleasure to visit a restaurant and indulge!
Not so any longer! This week, the AUD hit a 27 year high against the desperate English pound (which was buying only $1.47).  And that is after the two interest rate cuts in Australia in late 2011.
The Aussie is still flying high against the USD too, buying over 104 US cents this week.
Of course, this is all great if you’re an Aussie going to the London Olypmics this winter (or, like me, just going to spend some time over there) but it’s not really great for the country as a whole.
Australia, roughly speaking, is a country that digs stuff up and sells it to Asia. 
With the Aussie dollar so strong, some companies are now struggling to make a profit.
Companies are valued by estimating their future cash inflows and outflows and discounting these back to today’s value using an appropriate rate of return.
So what happens, when a once-great company stops being able to generate profits. 
Bluescope Steel (BSL) was one of Australia’s greatest companies, but it has had an absolutely desperate time since the global financial crisis, as charted below.  This resulted in the closure of their Port Kembla plant and thousands of jobs lost..
Inflation data is out next week.  Here’s hoping for a benign inflation print for the 4th quarter of 2011 and another 25 basis points interest rate cut on February 7.