On Sale?
With Auction Turnover declining (thanks no doubt to the election and the fact that the boom in property is over) it’s worth looking at whether there’s a link between the number as a leading indicator and other trends for example in hardware sales (people renovating their shiny new home) and electronic sales.
As the following chart supplied by Credit Suisse shows, there are some, perhaps weak, correlations which suggest you may not want to be paying top dollar for furniture retailers or homewares and electronics suppliers right now. The blue line is Auction Turnover and Credit Suisse have lagged the other data points to suggest that Auction turnover may be a leading indicator.
Humans are generally pretty bad at picking a turning point and with everything currently look okay, it seems like we’re calling the sky is falling. But turning points do indeed occur and it is worth keeping this in mind if you own some of the bigger retailers, have made large profits and the share prices are above reasonable estimates of intrinsic value.
As always be sure to seek and take personal professional advice first.
Roger Montgomery is the founder and Chief Investment Officer of Montgomery Investment Management. To invest with Montgomery, find out more.
Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
John
:
I heard Roger on the ABC about 2 years ago comment that super won’t be safe from future govts. I hope I got that right.
So because Qld has begun tapping into super is RE safe from their rapacious hands?
Roger Montgomery
:
Hi John,
Sometimes actions speak louder than words and a great distance can be covered by taking very small incremental steps. That appears to be the case when looking at the history of legislative changes surrounding super. Remember it was created by baby boomers for baby boomers. That combined with the fact that budget deficits are growing less likely to ever be recovered means the pressure on governments will be such they simply cannot ignore a multi-trillion dollar pool of money – even if it is not theirs. Presumably there is enough movement and dialogue around the tax advantages surrounding the home that a new direction/narrative will eventually burst through. When baby boomers are no loner the major owners, its not crazy to expect a shift in the tax treatment for the same reasons outlined above.