Pete Wargent blogspot

Co-founder & CEO of AllenWargent property advisory & buyer's agents, 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

Saturday, 25 August 2012

Reporting season: would you like to see some scary 5 year charts?

Just a quick and slightly eclectic post from me today. After a great-value dinner at Jamie Oliver's Italian in Sydney last night, I've just returned from a breakfast in Bondi at Easts Leagues Club and a stroll down Woollahra's Queens St - if there's a better way to spend a Saturday morning after getting up early then I haven't found it.

It's been a really fascinating week on the stock markets as we move through reporting season. Check out these lemons:

-BlueScope Steel (BSL) giving back recent gains and falling back by around 10% back to a pitiful 36.5 cents (from around $8.00 before the financial crisis) - BSL is being hurt by the strong Australian dollar and tales of paying "silly money" to employees and contractors alike;



-Qantas (QAN) head honcho Alan Joyce bravely reporting "an underlying net profit" but actually reporting a diabolical net loss after tax of around $250million - due to a record fuel bill, restructuring costs and a major industrial dispute that cost the company around $200 million - share price down to $1.16 from well above $5.50 before the GFC;



-Fairfax Media (FXJ) shares being hammered by nearly 20%, down to an utterly desperate 46 cents from above $4.00 before the GFC.



Cost of employment in Australia

All of these companies at various times have been market darlings, but have all found the high cost of being an Australian-domiciled business very tough.

Personally, I think this will see the future of employment in Australia move to one of there being many more contractors (including myself), more outsourcing and a lower percentage of full time employees as companies look to cut back on the level of their on-costs.

Who wants to be (inherit) a billionaire?

The Fairfax Media (FXJ) story has been a particularly interesting one, with iron ore magnate Georgina 'Gina' Rinehart reportedly attempting unsuccessfully trying to offload a 5% stake yesterday (after FXJ announced a painful $2.8 billion write-down), precipitating a 12% fall in the FXJ share price to a record low of 44.5 cents at one stage.

There is more than a little speculation that this may have been a ruse to drive down the share price prior to a takeover bid by the mining billionairess, who presently owns a strategic 14.99% holding, deliberately under the 15% threshold as demanded by FXJ's corporate insurance policy (Rinehart previously held a 18.75% stake). 

The 5 year share price history of FXJ tells its own story, newspaper owners and media companies face a tough road ahead as the world moves increasingly towards electronic forms of media and communication.

Ask an 'intelligent' adult to look at these charts and they are likely to say: "the prices have gone down loads, great time to buy!". Ask a 5 year old child and they will say: "those graphs are going down!". Guess who is right most often?

Will be very interesting to see what auction clearance rates come out of today's wonderful weather. It should give us a clear indicator of confidence in the property markets.

Heading to the SCG myself now to watch the AFL...Sydney are currently top of the ladder, though I have probably just jinxed that...Go Swannies!

While on the subject of media, it's a busy week ahead for me: you can read me in Good Reading Magazine, Wealth Professional Magazine (Financial Planners mag) and Australian Broker Magazine. I will post versions on this Blog page so you can read them easily in one place. I'm a nice guy like that. Enjoy the weekend all!