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

Sunday, 13 January 2013

Is this a new record?

We have become used to ever-decreasing timescales in the equities markets. Gone are the days when passive investors would phone their stockbroker once a year to "see how things are tracking" before arranging a game of golf.

The internet has sped up information and communication flows and now not only do we get weekly share market news...and daily share market news...even the mainstream news sites broadcast feed throughout the trading day in order to update news-hungry traders on the market movements and the supposed reasons for them.

Most day-traders achieve little other than generating brokerage fees and making brokerage sites very happy. The brokerage fees chip away at any profits that are made. Most traders also lack discipline and let losses run, instead classifying losing trades as long-term investments while running up hefty losses.

The shorter the time horizon the more difficult it is to predict the direction of a market.

We saw recently the MacroBusiness blog declaring itself to be "bearish" on the prospects of iron ore through October...and November...and December. Unfortunately the price rocketed up by 80% from its trough.

Whether or not the bloggers are correct about the fundamentals, iron ore is presently a highly volatile market and its direction is very difficult to call over the short term.

When prices and sentiment were low the blog was running a Daily Iron Ore Price Update, which now the price has rocketed seems to be more like a monthly update. 

Indeed one of the MacroBusiness newsletter trades was to short-sell Fortescue Metals Group (FMG) at $3.89 in order to capitalise on their predicted fall in iron ore prices.

Unfortunately the trader in question broke one of the golden laws of trading by overriding his stop-loss which was set at $4.06.

Under another law of trading - that being sod's law - iron ore prices continued to roar back and FMG boomed to above $5.00 leaving the trading account in tatters.

This has all led to a huge furore about previously published charts on trading portfolio performance having been deleted and the price charged  for the trading newsletter. 

Remember, over the short term markets are unpredictable beasts!


 Source: www.asx.com.au

A new record?

Australians love of property and obsession with property prices probably meant that it was inevitable that we would start to see detailed monthly commentary thereon. 

It might surprise Aussies to learn that in many other countries monthly property data barely rates a mention beyond a small sub-paragraph in the business pages. Contrast that with the screaming and often contradictory headlines we have in Australia:

"House prices recover and rise in September".

"Recovery stalls - house prices fall back in October."

Recently we have even seen the birth of a Daily Home Value Index.

And ultimately it will probably be possibly to trade property prices on an index although presumably, much as with A-REITS (property trusts), a financial product which is tradeable in this manner will be prone to having its price becoming materially decoupled from its underlying value.

And so to the new record...

This recent article from Business Spectator has spotted a trend in rising property prices in the first 10 days of 2013!

"...it is somewhat interesting that house prices in the first ten days of 2013 have already risen by 0.6 per cent."

I'm not sure how many of the millions of homes in Australia were sold (and were reported by agents as such) on New Years Day, for example, but its a fair bet that any 10 day index movement in based upon thin volumes. 

In any case, given that property transactions are best viewed as a 30 year investment decision, even if prices are up over the last 10 days, I wouldn't be losing sleep over it or popping champagne corks if I were you.

Keep me posted if you do spot any weekly trends or shorter though...

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