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Monday, May 17, 2010
Saturday, May 15, 2010
Australian Property Report - April 10
Much talk of housing ‘bubble’ - but fundamentals sound
– Record population gains & inadequate supply growth
– Critical housing shortage worsening/demand momentum strong
– FHB replaced by investors, upgraders & offshore buyers
– Conservative lending/low delinquencies/no sub-prime/full recourse loans
Household sector well placed
– Economy & labour market solid, unemployment falling – no forced sales
- Low delinquencies reflect comfortable debt servicing
- Solid gains in real household incomes
- Growing skilled labour shortages/upward wages pressure
Financial system solid
– On balance sheet lending raises incentives re. sustainable serviceability
– Conservative lending = low delinquencies
– Full recourse lending cf. US = less incentive to default
Risks
– Rising interest rates/deteriorating affordability could cap price gains
– Policy reversal of 2009 FIRB changes?
– Change in immigration policy?
– Rising unemployment/recession?
Click here to download full report - http://www.ipsinvest.com/News_199_Australian_Property_Report_April_10.aspx
– Record population gains & inadequate supply growth
– Critical housing shortage worsening/demand momentum strong
– FHB replaced by investors, upgraders & offshore buyers
– Conservative lending/low delinquencies/no sub-prime/full recourse loans
Household sector well placed
– Economy & labour market solid, unemployment falling – no forced sales
- Low delinquencies reflect comfortable debt servicing
- Solid gains in real household incomes
- Growing skilled labour shortages/upward wages pressure
Financial system solid
– On balance sheet lending raises incentives re. sustainable serviceability
– Conservative lending = low delinquencies
– Full recourse lending cf. US = less incentive to default
Risks
– Rising interest rates/deteriorating affordability could cap price gains
– Policy reversal of 2009 FIRB changes?
– Change in immigration policy?
– Rising unemployment/recession?
Click here to download full report - http://www.ipsinvest.com/News_199_Australian_Property_Report_April_10.aspx
UK House prices in April rose by 0.5%
* House prices in April rose by 0.5%
Despite a fall in transactions, the monthly average price of all residential property sold in England & Wales in April 2010 was an estimated 0.5% higher than in March. This is the twelfth month in succession in which the AcadHPI has shown an increase.
* Annual price increase is 12.9%
The annual average price of all residential property transactions in England & Wales was 12.9% higher than a year ago when prices were still falling - a significant recovery albeit in a market still characterised by great uncertainty. This is now the sixth consecutive month in which the annual rate of change in house prices has been positive.
* Housing transactions fall by 5% in April
There were an estimated 50,650 properties sold in April 2010, which is 5% lower than the number of sales recorded in March 2010. The level of sales in April 2010 is the second lowest April figure since the Land Registry started reporting transaction numbers in 1995.
* London house prices reach a new record level
For the second month in succession the average house price in London has reached a new peak. There is now substantial evidence to show that the major movement in London house prices is taking place at the top end of the market, with more modest price rises being experienced elsewhere.
Click here to download report -
http://www.ipsinvest.com/News_198_UK_House_prices_rose_05_in_April_.aspx
Despite a fall in transactions, the monthly average price of all residential property sold in England & Wales in April 2010 was an estimated 0.5% higher than in March. This is the twelfth month in succession in which the AcadHPI has shown an increase.
* Annual price increase is 12.9%
The annual average price of all residential property transactions in England & Wales was 12.9% higher than a year ago when prices were still falling - a significant recovery albeit in a market still characterised by great uncertainty. This is now the sixth consecutive month in which the annual rate of change in house prices has been positive.
* Housing transactions fall by 5% in April
There were an estimated 50,650 properties sold in April 2010, which is 5% lower than the number of sales recorded in March 2010. The level of sales in April 2010 is the second lowest April figure since the Land Registry started reporting transaction numbers in 1995.
* London house prices reach a new record level
For the second month in succession the average house price in London has reached a new peak. There is now substantial evidence to show that the major movement in London house prices is taking place at the top end of the market, with more modest price rises being experienced elsewhere.
Click here to download report -
http://www.ipsinvest.com/News_198_UK_House_prices_rose_05_in_April_.aspx
Wednesday, May 12, 2010
Warren Buffet's latest shareholder conference
Sandi and I just returned from Omaha and the annual Berkshire Hathaway meeting with Warren Buffett.
Although we have been shareholders for years, I never carved out the time to attend.... DUMB! We will be going back next year.
I have always thought that if you are going to listen to somebody, make sure they are eating their own cooking and have created truly sustainable success. Clearly, Warren Buffett falls into this category and his insights are crystal clear, simple and make sense..... here are a couple that I found particularly useful:
1. The key to getting rich is to create a structure or set of rules that minimizes the "Everyone else is doing it" syndrome. If everyone else is doing it, be wary!
2. The primary key to successful investing is not the size of your circle of competence, but rather knowing where the perimeter is. Too many people drift away from what they know and in the process move from investor to speculator.
3. The biggest single cause of the recent meltdown on Wall Street is the Business Schools and MBA Programs throughout the country. Teaching people to invest for the short term instead of owning a piece of the business will always produce gyrations and spikes in stock prices.
4. The most recent rise in the stock market is primarily a result of low interest rates.... people can't stand sitting on the sidelines making 2/10th of 1% on their money. Money has started flowing back into stocks because there are no alternatives and most investors can't sit and do nothing when there is nothing to do that makes sense.
5. Given the recent level of government intervention on top of the previously existing debt obligations in the United States, inflation is very likely. So are higher taxes. Inflation and higher taxes are the result of an the US inability to live within its means, so collecting and printing more money is the most likely answer.
6. The real culprit in the recent economic turmoil in the US is not the US Treasury department, it's Congress. Too much money has been spent in comparison to the amount being collected and this imbalance will result in even more pain.
7. The problem in Greece is that it doesn't have its own currency to print its way out of the problem.... Nor do any of the other members of the Euro. The Greece problem is likely to be repeated several times in the coming months.
8. Long term, Warren and his long time partner Charlie Munger are HUGE believers in the US economy, which is why they just spent $29 Billion buying a railroad. Railroads will be the primary mover of goods in the foreseeable future. The better the US economy, the more goods that need to be moved. This is a long term "all in" bet on the United States economy.
For those of you who are unfamiliar with the spectacular investing results of Warren Buffett, consider this: In 1979, you could have purchased his stock for $290/share. Today it costs $120,000/share. You can read more about this incredible man and his investing philosophy by reading his annual Chairman's Letter to Shareholders.... You should read all of them (1977-2009):
http://www.berkshirehathaway.com/letters/letters.html
For those of you addicted to speed, please remember that it took Warren 12 years (1950-1962) to make his first million.... The lesson: The goal is not to get rich.... The goal is to get rich and stay that way!
Best,
Keith Cunningham
Although we have been shareholders for years, I never carved out the time to attend.... DUMB! We will be going back next year.
I have always thought that if you are going to listen to somebody, make sure they are eating their own cooking and have created truly sustainable success. Clearly, Warren Buffett falls into this category and his insights are crystal clear, simple and make sense..... here are a couple that I found particularly useful:
1. The key to getting rich is to create a structure or set of rules that minimizes the "Everyone else is doing it" syndrome. If everyone else is doing it, be wary!
2. The primary key to successful investing is not the size of your circle of competence, but rather knowing where the perimeter is. Too many people drift away from what they know and in the process move from investor to speculator.
3. The biggest single cause of the recent meltdown on Wall Street is the Business Schools and MBA Programs throughout the country. Teaching people to invest for the short term instead of owning a piece of the business will always produce gyrations and spikes in stock prices.
4. The most recent rise in the stock market is primarily a result of low interest rates.... people can't stand sitting on the sidelines making 2/10th of 1% on their money. Money has started flowing back into stocks because there are no alternatives and most investors can't sit and do nothing when there is nothing to do that makes sense.
5. Given the recent level of government intervention on top of the previously existing debt obligations in the United States, inflation is very likely. So are higher taxes. Inflation and higher taxes are the result of an the US inability to live within its means, so collecting and printing more money is the most likely answer.
6. The real culprit in the recent economic turmoil in the US is not the US Treasury department, it's Congress. Too much money has been spent in comparison to the amount being collected and this imbalance will result in even more pain.
7. The problem in Greece is that it doesn't have its own currency to print its way out of the problem.... Nor do any of the other members of the Euro. The Greece problem is likely to be repeated several times in the coming months.
8. Long term, Warren and his long time partner Charlie Munger are HUGE believers in the US economy, which is why they just spent $29 Billion buying a railroad. Railroads will be the primary mover of goods in the foreseeable future. The better the US economy, the more goods that need to be moved. This is a long term "all in" bet on the United States economy.
For those of you who are unfamiliar with the spectacular investing results of Warren Buffett, consider this: In 1979, you could have purchased his stock for $290/share. Today it costs $120,000/share. You can read more about this incredible man and his investing philosophy by reading his annual Chairman's Letter to Shareholders.... You should read all of them (1977-2009):
http://www.berkshirehathaway.com/letters/letters.html
For those of you addicted to speed, please remember that it took Warren 12 years (1950-1962) to make his first million.... The lesson: The goal is not to get rich.... The goal is to get rich and stay that way!
Best,
Keith Cunningham
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