Where’s the substance? – Cool ad.

A very clever bit of marketing with a serious message about ‘authenticity’ — one of my bugbears.

“Don’t focus on the scars, focus on the journey…”

Definitely speech of the day … Rev Al Sharpton Speech at Michael Jackson’s Funeral:

“…He out-sang his cynics. He out-danced his doubters. He out-performed the pessimists. Every time he got knocked down he got back up. Every time you counted him out he came back in. Michael never stopped…”

Wow. I was and am very moved by this powerful tribute to Michael Jackson and his impact … particularly breaking down racial/cultural barriers and inspiring possibilities, including the Obama presidency. – P

Getting a shoe-in

SOME PEOPLE (including some who’ve made a living peddling property to others) seem to be just learning, or didn’t appear to fully realise that a property slump is NOT a separate incident from a general economic slump. The reason property sales volumes and values fall isn’t because a hand on some big cosmic clock ticks over to ‘SLUMP’ — it’s all intimately related to the economic cycle… the world economic cycle. How does that affect commercial landlords? Well, bearing in mind I’m not an economist’s elbow, here goes:

As job losses and company closures occur (each redundancy and collapse heralded in the news), and investment finance firms collapse, funds get frozen and banks turn harsh and stoney-faced, people’s confidence fractures. As each hammer blow strikes, they hold back more and more on purchases, businesses retrench or delay expansion and hunker down. Less shopping translates into less business, which affects retailers, manufacturers, importers, and the various elements up and down the economic food chain — including commercial landlords.

Those landlords who have left it until now to sell their retail unit/warehouse/workshop you-name-it are, given the circumstances, probably willing to sell at a bit of discount. (In most cases, it’s a good bet that the desperate are driving the market.) OK, that’s a bit tough for them. But if things are spiraling down, and the bank is sending alarm signals and reaching for a fresh valuation to justify their loan ratios, well, you may be better to get out before it gets worse.

A friend of mine was in just that situation and sold his business and (until then) owner-occupied Continue reading →

A tale of two mental states (continued)

…some thoughts on the news media, and a lesson from Barack Obama

Following on from an earlier discussion about market cycles being driven by alternating waves of pessimism and optimism, I’d like to examine another angle of this ‘social mood’ aspect of the market, warn you about those who would exploit it… and pick up a lesson from Barack Obama.

The trouble with pessimistic doom and gloom is that it is highly contagious — and surrendering to despair never helps anyone.
Alarm, defeatism and paralysis are very rarely useful or productive.

On the other hand, the trouble with ignorant optimism is that it can lead you into danger by exposing you to risks which experienced investors have learned to avoid. Ignoring market realities and failing to learn the lessons of history are a recipe for a hammering.

It’s a fact that the great sharemarket crash of 1929 destroyed a lot of wealth — but much more was wiped out as investors bought back into ‘dead cat bounces’. It was the same in 1987 — I know people who were untouched by the 19-20 October crash but then got scalped as ‘bargain hunters’ buying back into the false rallies that followed.

Buying back too early into a falling market can be very dangerous.

As you probably already appreciate, one of property’s great advantages as an investment is that it moves relatively slowly. Sure, values can rise and drop — sometimes dramatically — but not overnight, nor over a weekend even a month. That very important PLUS is a by-product of property’s lack of liquidity.

But like a coin, this factor has two sides: that same advantage can be a real drawback when you want to (or have to) sell in a hurry. Fortunately, that’s not a position many of us find ourselves in. We can ride it out. The rapid turnover that property traders have relied on during the recent boom is (for now) a distant memory. The cycle rolls on.

So it’s been interesting in recent times to observe two messages promulgated by individuals seeking to be seen as leaders in the real estate investment ‘industry’:

1. ‘eeeeeeek! We’re doomed! This unprecedented global meltdown is a catastrophe of epic proportions’

2. ‘Buy now, no money down, hurry, hurry, before you miss out’

I’ve learned from personal experience to regard those making such statements with considerable distrust.

My view:

What’s needed is realistic, measured, impartial advice based on genuine experience.
Continue reading →

RIP Michael Crichton

Michael Crichton (1942-2008)

Michael Crichton (1942-2008)

Another hero has died.

Michael Crichton had the grace to answer my correspondence, and share some advice for me as a writer in the mid 1990s. I was so encouraged. He was already famous, and I had read his books Andromeda Strain, Terminal Man in college. I’ve read almost everything he published, even the non-fiction. His memoir Travels was a spectacularly (sometimes awkwardly) honest book and encouraged me to tell the truth.

His imagination and his sense of the zeitgeist was astounding.

What a shock that he has died.

RIP Michael. -P

Michael’s talent outscaled even his own dinosaurs of ‘Jurassic Park.’ He was the greatest at blending science with big theatrical concepts, which is what gave credibility to dinosaurs again walking the earth. In the early days, Michael had just sold ‘The Andromeda Strain’ to Robert Wise at Universal and I had recently signed on as a contract TV director there. My first assignment was to show Michael Crichton around the Universal lot. We became friends and professionally ‘Jurassic Park,’ ‘ER,’ and ‘Twister’ followed. Michael was a gentle soul who reserved his flamboyant side for his novels. There is no one in the wings that will ever take his place.

—Steven Spielberg on Michael Crichton’s death

TIME to be Optimistic or Pessimistic?

What we can learn from the ‘turmoil’ of world financial markets: Experience counts.

As the editor and publisher of two books on the effects of the property cycle (The Day the Bubble Bursts by Olly Newland and How to Survive and Prosper in a Falling Property Market) I take an interest in identifying the lessons drawn from experience — especially in these history-making, record-breaking times.

What I’ve noticed is there’s been plenty of uninformed negative ‘end of the world’ hysteria reported in the media — and equally, a slew of unrealistic over-optimistic sales-pitches (like: buy now or you could miss out!) peddled by others.

Who’s right? Does it matter?

Something else I’ve noticed is that the older, wiser heads I talk to are singing from a different song sheet to the spruikers and mis-timed property developers (whether here or on the Gold Coast). They’re saying keep your eyes open, and box carefully. Some even say wait, things could very well get worse. (From experience, when a salesman says ‘act now or you could miss out’ it’s time to be wary and re-examine the offer. Ask the Blue Chip investors.)

Not being a natural a pessimist, I’ve been heartened to read a couple of good articles in the latest TIME magazine – 13 October, with the Great Depression soup kitchen on the cover.
Continue reading →

Farewell, Doug Woodyard

Yesterday I was one of several hundred who farewelled Doug Woodyard. He died on Thursday 17 April.

Doug was a true pioneer and a straight operator in his property sourcing business — honest and as straight as an arrow. He was a moral and earnest soul who was perplexed when confronted by a lack of ethics in others.

I first met Doug ten years ago. He was an early member of our 3 Hours to Freedom Club network and attended our first Dolf de Roos Property Investors School, thereafter attending or assisting on many Empower Education programmes and becoming a welcome and valued part of our ‘family’. He added so much to those around him.

With film star good looks and a ready smile, Doug was an adonis — a fit, tanned, vibrant, energetic, quick-witted man with a heart of absolute gold. He was one of the kindest and most positive people I’ve ever known.

To the end Doug Woodyard was a giant, a warm-hearted king of a man, a loving, open-hearted, honest friend.
Yesterday his family and friends did him proud in a wonderful celebration of his life. But we still cried.

I count it an honour to have known him.

— Peter Aranyi, 20 April 2008