There are more interesting articles, commentaries and analyst reports on the Web every week than anyone could read in a month.
Each Saturday morning I like to share some of the ones I’ve read during the week.
So pour yourself a mug of strong brew, settle into your favourite easy chair, and get ready for some weekend reading ….
And please forward to your friends by clicking a social link buttons on the left.
Australia’s most hipster suburbs
Hipsters have taken Australia by storm. With new cafes, juice bars and indie boutiques popping up everywhere, Domain has done a little digging to uncover the best places for that happy hipster lifestyle.
How to spot a hipster
If you’re unsure of what a hipster actually is, you only need to point to the Wikipedia for an apt explanation:
“[Hipsters are] broadly associated with indie and alternative music, a varied non-mainstream fashion sensibility (including vintage and thrift store-bought clothes), generally progressive political views, organic and artisanal foods, and alternative lifestyles.”
In other words, they are the hippies of the new century – destined to change the way we think about the world around us – one soy latte at a time.
Sydney took out the coveted title of having the most hipster suburbs in Australia, according to Urbis’s 2011 census data. They are:
Camperdown, Chippendale, Darlinghurst, Darlington, Elizabeth Bay, Forest Lodge, Potts Point, Redfern, Surry Hills
Coming up in close second was popular Melbourne, with seven suburbs making Urbis’s Hip List. These were: Brunswick, Brunswick East, Collingwood, West Melbourne, St Kilda, Travancore, Fitzroy
Is the Sydney Market Oversupplied | How our mind sabotages investment success | Renovations | What drives investor lending?
Details of this week’s show:
Did you know that as property investors we can sometimes be our own worst enemy?
It’s not because of the decisions we make, the opportunities we consider or the investments we miss out on, but rather, it’s due to the way we think. Michael Yardney says it’s the way our brains sneakily convince us to make decisions that aren’t always in our best interests.
Would higher interest rates on investment loans cool the investor market and what exactly drives investment lending? Two questions I put to Andrew Mirams.
Hear about Jane Slack Smith’s simple renovation strategy used by savvy investors to build a multi-million dollar property portfolio and I will tell you about a free Webinar that I have done with Jane and how you can secure your place at the session with our compliments.
Bryce Holdaway from Sky TV’s Location, Location, Location joins us to talk about how he is seeing more investors going further afield to find the best properties and how you can get comfortable with that strategy.
Jay asks a question about a block of units he is building and how he can claim the usual investor deductions while having good asset protection from any litigation. Ken Raiss from Chan and Naylor answers that question.
John Edwards from On The House says that Governments could be creating oversupply and in fact there is evidence that the Sydney market is already oversupplied. John also speaks out about negative gearing.
Thoughts About Investing and the Economy
My favourite columnist on investing and the economy, Morgan Housel shared some of the things he’s learned recently:
Optimism, according to psychologist Tali Sharot, is basically an efficient form of ignorance. “It protects us from accurately perceiving the pain and difficulties the future undoubtedly holds, and it may defend us from viewing our options in life as somewhat limited. As a result, stress and anxiety are reduced, physical and mental health are improved, and the motivation to act and be productive is enhanced,” she writes.
Daniel Kahneman’s book Thinking, Fast and Slow, begins: “The premise of this book is that it is easier to recognize other people’s mistakes than your own.” I was in New York a few months ago, and a car honked at a stoplight. A nearby construction worker turned around and yelled, “Be quiet!” He then resumed using his jackhammer. Criticizing less and self-reflecting more is important, especially in an emotional field such as investing.
Warren Buffett recently commented on how to improve in life. “The best way you can improve yourself is to learn to communicate better,” he said. “Your results in life will be magnified if you can communicate them better. The only diploma I hang in my office is the communications diploma I got from Dale Carnegie in 1952. … Without good communication skills you won’t be able to convince people to follow you even though you see over the mountain and they don’t.”
Nobody rang a bell when the economy recovered. It happened slowly over six years. Since it developed slowly, few people noticed. There wasn’t a moment when the bears who predicted doom from 2010 to 2013 were proven wrong; they just kind of faded into obscurity as people lost interest. People are so caught up in irrelevant short-term news that they miss the important long-term trends. That’s unfortunate.
The population of Americans age 30 to 44 — who buy lots of homes and cars, and start lots of new businesses — declined by 4.6 million from 1999 to 2010. That cohort is now growing again, and is expected to rise by 2.3 million over the next five years. I think this is the most overlooked tailwind the economy has right now.
2012 was one of the biggest years for economic pessimism. 2013 was the best year for stocks since 1997. 2014 was the best year for jobs since 1999. It works this way all the time.
I don’t think anyone can be unemotional about money. It’s like saying you’ll be unemotional about your kids. If you kid gets arrested, you’ll get emotional. And if you lose half your money in the stock market, you’ll be emotional. That doesn’t mean you’ll act on those emotions, but no one should pretend like he or she has total control over emotions when the market is going wild. It’s biology.
Some of the biggest news stories of 2014 involved commercial plane crashes. But 2014 actually had the fewest number of crashes since the commercial aviation industry began in 1949. This is a good example of the “attentional bias,” in which you falsely believe events are happening more frequently just because you’re paying more attention to them.
Read more at Fool.com
Consumer confidence surges
Regular Property Update contributor Pete Wargent wrote in his blog that Westpac’s Consumer Sentiment Index leapt in February to the strongest reading since January 2014 and take the index back into positive territory (i.e. optimists outweighing pessimists).
This is apparently buoyed on by an interest rate cut, a rising share market and the decline in fuel prices.
The “time to buy a dwelling index” jumped by 9.7 points to 125.8, while there was also a 6.7 percent jump in house price expectations.
One Way to Beat the Market
If you’ve been following my blogs you’d know I believe successful investors DON’T diversify, instead they find something they’re good at and do it over and over again.
That’s how they become an expert.
Ben Carlson confirms the same – one way to beat the market in shares is to hold a concentrated portfolios:
Portfolio manager and author Robert Hagstrom performed a study that looked at 12,000 randomly generated portfolios from a universe of 1,200 stocks. He broke the portfolio up by the number of holdings so they looked as follows:
• 3,000 portfolios containing 250 stocks.
• 3,000 portfolios containing 100 stocks.
• 3,000 portfolios containing 50 stocks.
• 3,000 portfolios containing 15 stocks.
… Now take a look at the outperformance rates by portfolio size:
• Out of 3,000 250-stock portfolios, 63 beat the market (2% of portfolios).
• Out of 3,000 100-stock portfolios, 337 beat the market (11% of portfolios).
• Out of 3,000 50-stock portfolios, 549 beat the market (18% of portfolios).
• Out of 3,000 15-stock portfolios, 808 beat the market (27% of portfolios).
Weekend video: Italian Nonna tries to work out how to use Siri
I had a real belly laugh as I watched this – I hope you enjoy this…
Blogs you may have missed this week:
If you didn’t have a chance to read my daily blog, here’s a list of some of the blogs you missed this week: