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

Thursday, 8 November 2012

The greatest stock market crashes in history

I've circled four of the most famous stock market crashes. In order, they are:

1 - The Wall Street Crash of 1929

2 - Black Monday, October 1987

3 - Tech Stock Bubble Bursts 2000-2002

4 - Subprime Debt Crisis 2008-2009

The Wall Street Crash was the most horrific for investors, as confidence was shaken for so long that the market took a quarter of a century to recover. 

And yet, look at the chart more closely. Yes, the crash was severe, but observe the irrational exuberance that brought about the supposed "permanenlty high plateau" and then crash in the first place. Crash or correction?

Black Monday of 1987 looks laughable in retrospect. Merely an annoying blip, it was the first crash to be exacerbated by computer trading, leading to a stunning 22.6% drop in just a few days (and 40%  in Australia in October 1987).

The Tech Stock Bubble bursting also looks more like a correction at this distance. I mean, look at how fast stocks were appreciating before the correction! Heartbreak Hill is a walk in the park compared to that gradient.

As for the subprime crisis - well, 3 years on the Dow Jones is to all intents and purposes back on track just 3 years down the road. At least, it was until 48 hours ago!

I think the lesson from this chart is fairly obvious: crashes are also corrections - it depends on your time horizon.

With all the talk of a forthcoming US fiscal cliff this might be relevant more immediately than expected with the DJIA shedding some ~430 points (or ~3.5%) over the past two trading sessions.

The markets have returned to high alert mode stateside, dropping to their lowest level since July, when all the talk was of Greece (the Greek austerity measures and government debt pressures are still rumbling along in the background).