Pete Wargent blogspot

CEO AllenWargent Property Buyers, & WargentAdvisory (institutional). 6 x finance author.

'Huge fan of your work. Very impressive!' - Scott Pape, The Barefoot Investor, Australia's #1 bestseller.

'Must-read, must-follow, one of the finest analysts in Australia' - Stephen Koukoulas, ex-Senior Economics Adviser to Prime Minister Gillard.

'One of Australia's brightest financial minds, must-follow for accurate & in-depth analysis' - David Scutt, Business Insider.

'I've been investing 40 years yet still learn new concepts from Pete; one of the finest young commentators' - Michael Yardney, Amazon #1 bestseller.

'The most knowledgeable person on Aussie real estate - loads of good data & charts...most comprehensive analyst I follow in Oz' - Jonathan Tepper, Variant Perception, 2 x NYT bestseller.

Wednesday, 29 October 2014


Confidence rises

It's not really very fashionable to report positive news these days.

Rather it's often deemed much more 'credible' to report only gloomy news or viewpoints, regardless of whether or not they are warranted.

Reuters reports today that US consumer confidence has jumped to its highest level since October 2007.

I haven't bothered to look, but no doubt there will be the usual range of opinion pieces explaining to us why we should ignore confidence at a 7 year high.

No change there.

It's considerably more popular to put a negative spin on such measures and instead explain why QE has been such a terrible injustice and an awful failure, but without knowing the counter-factual (i.e. how bad things might have been) such arguments are nigh on impossible to prove or dis-prove, and as such often tend to reflect the bias of the commentator.

Anyway, it is what it is...

Aussie confidence above average

Moving back Down Under I surely can't be alone in thinking the weekly consumer confidence polls in Australia represent a monumental overkill, and are arguably of little use.

Heck, even once a month would be pushing it! 

Nevertheless it is interesting to note from the ANZ-Roy Morgan consumer confidence rating is up by 2.7 percent to 141.6 points, which is above its long run average as the "sticker shock" from budget cuts recedes into the rear-view mirror.

Of course, one might argue that consumers are unwise or even foolish to be so upbeat, but confidence remains above its long run average level.

And that, by the way, is an average level of confidence which has seen Australia steer free of recession (generally, by a fair margin) for more than 20 years, whilst through nearly all that time sustaining decent wages growth and asset price growth. 

Glitch in the matrix

While on the subject of ANZ, a point of moderate amusement arose as the bank released an announcement to the Securities Exchange last week promising to assist market participants in their understanding of the forthcoming full year results by uploading an Excel template showing the expected presentation thereof.

ANZ certainly more than achieved that goal, since in a tremendously embarrassing mix-up the bank uploaded the version of the template disclosing the (unaudited) full-year results to their website. 

ANZ hurriedly requested a trading halt after the cock-up was realised (one can only imagine the panic) but we can expect that a full year cash profit of just under $7.1 billion (+11 percent) will be reported on Friday when the results proper are released to the market.

As a seasoned veteran of ASX continuous disclosure breaches and balls-ups myself, I can offer the ANZ finance team two thoughts in which they may find a small amount of solace - firstly, while the error might seem like a disaster now, in a few weeks almost everyone will have forgotten about it. 

And secondly, looking on the bright side, at least the prematurely reported results were positive!

Leaking negative news such as an unexpected capital raising, a profit warning or even just missing an earnings expectation tends to go down less well with shareholders.

Chin up!