rob zdravevski's blog

Don’t own a home, own businesses

This chart sourced from visualcapitalist.com shows the percentage of assets that people of differing “wealth brackets” tend to favour.

It may prove the theory that wealthier people allocate their money to assets and businesses whilst others tend to spend their money on “stuff”.

Also interesting is the significant weighting of money that the primary residence and vehicles categories account for amongst the first couple “wealth” bands.

This could prove why conversations around motor vehicle (sales, servicing, repairs, parts, insurance) and real estate (buying, selling, renting, furnishing, maintaining) are so prominent in our daily lives.

These two assets (or liabilities) are also enormous revenue raisers for governments. Just think of the registration fees, stamp duties, fuel excises, luxury car tax to mention a few.

I’d like to think that this data could provide the basis for our cultural and government propaganda surrounding the great dream of buying a house. For, if we believe in the “dream”, we’ll take out a notable mortgage to acquire a home and this will require us to stay in the workforce in order to service our debt, all in while, we are paying taxes and providing the labour force for the businesses which the wealthier bands of citizens own.

Maybe my conspiracy theory for the month.

Either way, I think the chart below is quite interesting.

My view on the AUD

17 January, 2018
by Rob Zdravevski

Not new highs for everyone

In a contrast to the Nasdaq hitting new highs and the fervour behind technology stocks, one of the giants of making the internet “work” and a former darling of the 1990’s tech boom; Cisco Systems (CSCO) is seeing its stock price ONLY NOW climb back to 16 year highs which were last seen in 2001. But don’t feel sorry for CSCO’s price, its market capitalisation today is more than 30% higher than the Commonwealth Bank of Australia.

Has your house value tripled in 4.5 years?

Shares in Apple Inc. have……..

Platinum Asset Management Global Outlook – Nov 2017

Kerr Nielsen and Andrew Clifford present their views to investors

Still Long China

In March 2016, we made a suggestion that making an investment in the Shanghai equity index had attractive probabilities and was an equally such proposition.

Since then, its total return has been between 19% – 25% (depending on the currency of measure) as displayed in the image below. This means an average of more than 1% per month for the past 18 months.

We think this has been a more than adequate return when considering the amount of risk we were taking and when comparing it to other alternatives including investing in cash or fixed income.

Furthermore, the Shanghai Composite Index was trading at an “oversold” levels which we hadn’t seen for many years.

Interestingly, whilst many major equity markets power on to new all-time heights, the Shanghai Composite is still 50% below its peak of 10 years ago.

I would like investors to ponder what the Chinese stock market will look like in 20 years time.