Pete Wargent blogspot

Co-founder & CEO of AllenWargent property buyer's agents, offices in Brisbane (Riverside) & Sydney (Martin Place), and CEO of WargentAdvisory (providing subscription analysis, reports & services to institutional clients).

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.

Thursday, 19 February 2015

XJO blazes through 5,900

Stock markets surging

The ASX 200 (XJO) surged by 57.5 points through 5,900 yesterday to 5915.7 leaving the market at around its highest level in 7 years.

Most sectors fared well but the industrials are clearly attracting a good deal of capital surging by 3.6 percent.


Wealth effect

With the total balance sitting in Australian superannuation now approaching $2 million, the fickle behaviours of our stock market indices are more consequential than perhaps we might care to admit.

Although the "wealth effect" of rising home prices is well known about and documented, the evidence for whether rising stock markets have the same impact on consumer confidence and spending is less convincing.

Either way, share prices breaking 7 year highs can hardly hurt.

Anticipating stock market gyrations can be a notoriously fruitless exercise - and forecasts generally tell you more about the forecaster than they do about the future.

However, it is generally perceived to be likely that low interest rates and a "quest for yield" will push the market higher over time, a dynamic which has been seen in the US. 

Source: Commsec

Household wealth to rise in 2015

Indeed 2015 is shaping up as a potentially prodigious year for Australian household wealth.

Corelogic-RP Data also reported in January that dwelling prices rose by 1.3 percent in the first month of the year, driven by gains in the largest capital cities cities of Sydney, Melbourne and Brisbane, although offset by declines in Adelaide and Darwin.

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Genworth loses Westpac gig

Genworth (GMA) went ex-dividend yesterday having declared a fully franked ordinary dividend of 13.1 cents and a fully franked special dividend of 11.5 cents per share.

The share price dipped accordingly, but there was also an early gift for the shorters who had the gumption to stay short on the ex-div date as Westpac announced that it would be terminating its agreement with GMA.

This will impact GMA's gross written premiums and earnings materially from FY16.

Although mortgage delinquencies are at their lowest level since 2007, that's not a great deal of use to the insurer if future business is heading offshore. 

Unfortunately for short sellers, daily shortsell statistics implied that only a miniscule fraction of the issued capital is being reported as sold short.


The share price pulled back to $3,32, although this still well above the IPO price of $2.65.