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 finest 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.

Monday, 12 June 2017

Stick to the knitting

Bullet-proof vested

I'm rarely moved to comment on the rainforests of recycled drivel written on Australia's real estate markets. There are, after all, only 24 hours in a day!

Some positive news for consumers is that over recent years there is more quality information available than ever before on what is happening in the property markets.

Over the past decade in particular analysts Tim Lawless, Cameron Kusher (both of CoreLogic), and Louis Christopher of SQM Research have worked tirelessly to provide objective and transparent analysis to interested readers, often without charge.

You can perhaps understand, therefore, why I spat out my weekend cornflakes upon reading an ignominious opinion piece in The Australian which inferred their collective output to be dishonest. 

As someone that is well paid by institutions for my own research, I'm only too aware that anyone churning out puff pieces in the name of vested interest would see their subscriptions binned faster than a Theresa May majority.

The irony here is that the author of the article, Roger Montgomery, is one of the clearest cut vested interests since the suturing of Gondwana.

As I said, I don't generally much respond to property opinion pieces - a diversity of opinion is ultimately what makes a market - but [arguably] defamatory comments shouldn't be printed uncritically, and as such this one won't be let through to the keeper.

Multi-speed markets

It's incongruous enough that a stock picker who's shtick is that you don't buy the market, you instead buy so-termed "wonderful companies" (more on this later) then goes on to make absurdly broad generalisations about the property market. 

It's well over a year since I carefully dismantled Montgomery's declaration that Australia had a greater oversupply of property than the US in 2007, including an oversupply totalling more than 200,000 dwellings by March 2016 (sixteen months ago now). 

Montgomery's latest goof included that house prices have been falling in Melbourne's searing market, while anyone who genuinely believes that house prices in the booming Hobart market actually fell by 4.8 per cent in a single month has no business commenting on property at a long weekend barbecue, let alone in a revered national broadsheet. 

It's insulting to the intelligence of readers in Tasmania, though fortunately most market participants know better than to believe everything they read these days.

As discussed in much more detail here at Business Insider, I fundamentally agree that parts of the Sydney market are finally set for a correction. Not that this is exactly groundbreaking research - prices in many areas of Sydney have comfortably more than doubled since Montgomery started prattling about the property bubble in earnest years ago.

In fact his property market advice has been as useful as an ashtray on a motorbike for his hapless readers that sold their properties.

To be clear, this isn't a comment on the future direction of housing markets.

Indeed, nobody has written more extensively about the travails of Brisbane's inner city apartment market than myself.

Simply, this is a spirited defence of three analysts that I personally rate as among the very best in Australia, alongside Greg Jericho of The Guardian and Chris Joye of the AFR.

Bait and switch

It's obvious to any informed reader that Montgomery's property market 'analysis' has all the hallmarks of a classic bait-and-switch.

Montgomery recently ramped up his property bubble pieces from about thrice-monthly to several times per week in part to divert attention away from a series of [citation removed, DYOR] stock picks, which in several cases have seen their share prices [citation removed, DYOR].

Montgomery's blog site,and book are generously interspersed with Warren Buffett quotes, the inference presumably being that that he adopts an approach worthy of the greatest investor of all time.

Charlie Munger spoke wisely of the "20-slot rule" - imploring investors to consider each investment as though they had only 20 such decisions in a lifetime - yet comparatively speaking Montgomery's blog posts [citation removed, DYOR].

In any event, [in my opinion] Buffett wouldn't have held substantial positions in Australian companies with [removed] economic moats.

More fundamental analysis, and less of the muckraking property punditry.