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

Wednesday, 21 November 2012

The ancient doomsday prophecy

The ancient doomsday prophecy
The ancient Mayans predicted that the world will end this year on December 21, and Today Tonight has reported that plenty of people are preparing for the worst. If ancient Mayan predictions prove to be correct then we won’t see another Christmas!
A global underground movement is reportedly preparing for the coming Armageddon. So-called ‘survivalists’ around Australia and other parts of the world are anticipating the end of days by building underground panic rooms and filling secure bunkers with the necessary  supplies.
While most of us remain blissfully unaware, ancient civilisations have picked out 2012 as Armageddon. Today Tonight highlighted the picturesque town of Allora in Queensland where preparations are well underway. A group of doomsday believers in the town are busily preparing for the end of the world as we know it.
Will doomsday befall us?
As for whether the Armageddon predicted by the Mayans comes to bear, I’m unsure, though I’ll be sure let you know on December 22.
There are plenty of those in the financial press and Blogosphere who are forecasting an Armageddon of a different kind – an economic Armageddon. It can be pretty unnerving as an investor. After all, there are always groups in the press who predict the worst. Always.
If you want to be an investor, however, you need to be able to take a longer view than this.
Sit out on the sidelines or build a portfolio?
In 1980 the All Ordinaries stock index in Australia was struggling desperately to keep its nose above 600 points in the face of a downturn (doom and gloom!) and an average house in Sydney would have set you back $68,850.
And just imagine what the world has been through since 1980! Without even missing a beat, I could run off dozens of things. Here’s a handful:
Ø  The Savings and Loan Crisis of the 1980s and 1990s
Ø  The “Black Monday” Crash of 1987
Ø  The collapse of the Soviet Empire 1991
Ø  Keating’s “recession we have to have” of 1991-1992
Ø  The September 11 terrorist attacks of 2001
Ø  The bursting of the tech stock bubble 2002
Ø  The subprime crisis and “Global Financial Crisis” of 2007-2010
Ø  The European and US debt crises…
I haven’t even begun to list civil wars, the crises in the Middle East, Afghanistan, Iraq…
So when people tell you there will be hard times ahead, guess what? They are absolutely right! Investors must see beyond the immediate future and resolve to make a plan for 20, 30, 40 years from now. Capitalism repairs and re-invents itself and the world moves on.
By the way, despite the unbelievable fall-out of the Global Financial Crisis, an average house in Sydney today costs $648,040 and the stock-market, even after an enormous crash in prices from close to 7,000 points is still hovering around the 4,400 mark.
You might think those valuations are too high or you might not, but you can be assured of one thing - they will higher in the future.
Is it rational to be a believer (Pascal's wager)?
Is it rational to believe in God? It is. And here’s the logic: if God does exist then he will be delighted that you believed in him (or her) and you will be on your merry way through the pearly gates. If God does not exist then it will be disappointing, but the faith itself will have cost you nothing.
Being an investor involves much the same leap of faith or logic. You can either believe in the fact that capitalism has repaired and re-invented itself for decade after decade through two World Wars, a Great Depression, nuclear threats and a missile crisis, more wars, the collapse of the Communist empire, global financial crises and more. Or you can simply believe in the Armageddon scenario.
Let’s face it, the only rational response is to believe in capitalism and invest for the long term.
Alternatively if capitalism fails then all we will be left with is Kaletsky’s Mad Max scenario. The world will be run by gangs and mafia instead of politicians and nothing we have today will be of any value to us at all except for firearms, food and farmland.
I prefer to go with the former.