Pete Wargent blogspot


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Sunday, 18 April 2021

Podcast preview: The Kelly Investor

Kelly criterion investing

In the penultimate part of our Warren Buffett mini-series, we'll discuss Buffett as a 'Kelly' investor.

Preview here:


You can download our new e-book here.

You can listen to the whole podcast series here.

You can tune in to the full podcast series at SoundcloudStitcher, or Spotify.

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Auction results

Strong auction results and median prices for Sydney this weekend, after holiday distractions.

Melbourne's final auction clearance rate last week slipped to under 70 per cent, suggesting that the inner-city unit market is still lagging behind, even though the market for houses is hot. 

Source: Domain

Brisbane and Adelaide were also strong, with another preliminary clearance rate weekend of above 80 per cent. 

Friday, 16 April 2021

Jobs recover ahead of JobKeeper wind-back

Another beat!

Employment surged another 71,000 to a record high of 13.08 million in March.

The economy has added a thumping 189,000 jobs in the first quarter of 2021. 

What a stunning recovery it has been, with total employment up by almost 1 million from the mid-2020 lows. 

The participation rate jumped again to a record high of 66.3 per cent, 0.4ppts higher than a year earlier.

Even still the unemployment rate fell back further, from 5.83 per cent to 5.62 per cent in March. 

The horror forecasts of double digit unemployment are but a distant memory now. 

Over the first quarter of the surge in employment was driven by Victoria (+76,000) and New South Wales (+55,000). 

But those two states are only recovering their jobs lost and have felt the lack of immigration quite keenly over the past year. 

The real big winners have been Queensland (+63,000 over the year to March) and Western Australia (+28,000), where the unemployment rate has fallen to under 5 per cent. 

South Australia's recovery has lagged a little bit, and employment is modestly lower over the year to March (-11,000).

New South Wales now has an unemployment rate of 5.4 per cent, but Victoria still has a way to go from 6.1 per cent.

Overall, this was another tremendous result, though there is still a long way to go before full employment hoves into view.

Meanwhile the end of the JobKeeper payment program could cost an estimated 100,000 to 150,000 jobs, so there will be a speed-bump of some sort from that to navigate. 

Onwards and upwards...

Wednesday, 14 April 2021

'This is an extraordinary result' (Bill Evans)

Westpac lovin' it

Westpac sees consumer sentiment scorching to the highest level in 11 years.

Consumers just don't get much more upbeat or sprightly than this in Australia. 

Full report from Westpac is here (or click on the image below):

The house price expectations index increased 135 per cent from a year ago, which is fairly self-explanatory.

The time to buy a dwelling index has already begun to decline, however, and now sits below the long run that's another indicator suggesting that the frenzy is passing. 

Source: Westpac

Australia's ASX 200 stock market index has now all but completed a most magnificent round trip in travelling from 7,140 to under 5,000, and now back up to 7,000.

Clearly the economic outlook for Australia is buzzing, and this is well reflected in the above above.

Concern about going 'all-in' on stocks at this stage is more related to US markets which are still, as measured by most indicators, bordering on extreme valuations. 

Source: Shiller PE

Policy settings are expected to remain stimulatory in Australia. 

Enjoy the full report from Westpac's Bill Evans here

Vacancies still trending higher in Melbourne

Docklands doom

SQM Research reported national vacancy rate increasing from 2 per cent to 2.1 per cent in March.

It's unusual for rental vacancies to rise in March, the result reflecting the increasing pace of new building and stymied immigration. 

It seems that the rush to the regions has now reversed, and a return to the capital cities is underway.

Of the capital cities, Melbourne has by far the highest vacancy rate at 4.4 per cent. 

SQM provided an interesting case study to show how asking rents have fallen by nearly 30 per cent in Melbourne's Docklands over the past year.

SQM did report that the worst has passed for CBD landlords with Melbourne and Sydney CBD vacancy rates declining to 8.3 per cent and 6.2 per cent respectively, well down from their peaks. 

On the other hand, Brisbane, Adelaide, and Darwin all saw sharp increases in asking rents over the month to April 12, as supply is considerably tighter in those cities. 

The best ever business conditions

Surveys boom

What a pleasant change to see policy settings driving the economy forth!

Roy Morgan reported consumer confidence jumping 5.9 per cent to 114.1 yesterday, as Brisbane's lockdown unsurprisingly proved to be a nothing burger.

Meanwhile the NAB survey - the most timely indicator of conditions that we have - boomed to record highs.

Everything is looking tremendously strong on this survey (and take a look at the changes in net balances since January!). 

Business conditions are now the best we have ever seen (in at least 25 years), and even better than the resources boom years. 

And business confidence isn't far behind. 

The ABS payrolls figures suggested a relative stalling in employment growth for the most recent fortnightly data, while wages decreased 0.4 per cent, so there is clearly no room for complacency.

Overall, though, very promising for the Aussie economy. 

Tuesday, 13 April 2021

Skilled vacancies DOUBLE....boom!

Job ads booming

Fairly conclusive: job vacancies exploded another 19 per cent higher (or +38,200 advertisements) to 238,700 in March. 

Spectacular numbers which make it increasingly difficult to paint a gloomy picture of the Aussie outlook. 

Vacancies have basically doubled everywhere, and then some in many case.

Source: LMIP

Excellent! Keep it coming.

The winding back of JobKeeper is expected to cost around 100,000 jobs, but this should help to cushion the blow quite effectively.

Expect to see unemployment rate back at 5 per cent by the end of the year. 

Monday, 12 April 2021

Podcast episode #41: On saying no

Buffett mini-series - part V

In the 5th part of our Buffett mini-series, we look at the ability to say "no".

Tune in here (or click on the image below):


You can download our new e-book here.

You can listen to the whole podcast series here.

You can tune in to the full podcast series at SoundcloudStitcher, or Spotify.

Don't forget to leave us a friendly review, as it helps us to get the word out.