, Ok, the next Kiwi book I’ve read is Olly Newland – “The Day The Bubble Bursts”
(I’ve also just read Dolf’s book Extraordinary Profits from Ordinary Properties, but I won’t bother reviewing that one, it’s a list of 100 odd properties with purchase price, current valuation, return, pretty basic…whoops…is that a review ? rating 4/10 for Dolfs book)
Now this book is interesting if you like people who put their opinions & hearts in the open. This guy is one serious bear who is predicting a wholesale slaughter in some areas of the market. He writes about the investment clock & why he believes in it. With 40 years of RE investing experience behind him he has been through a few boom/bust cycles so there’s a bit of credibility to his thoughts.
His doom & gloom is not so much that, but more a warning for those less wary who haven’t seen or studied their history. He relates his experiences in the past including getting completely done over in his first foray into Australia. I must admit I like someone who can not just admit their mistakes, but can relate their learning from the mistake.
His main message appears to be:
• Booms are followed by slumps/crashes – doh !
• The investment clock is real & it works – I’m going to overlay the S&P 500 index on his graph of Auckland prices just our of curiosity, I thought they operated on different timeframe)
• Slumps/crashes are where the bargains are found
• Have a survival plan for the inevitable slump
• Soft landings only happen in certain areas, others get trashed by up to 50%
• Ensure some money is in gold
• Avoid over marketed properties (apartment style stuff)
• Don’t follow the “guru’s”, but learn from what they do
• Be aware of which properties will get slaughtered first (he recommends certain sorts of commercial, or 3 bedroom brick in reasonable suburbs as the best ‘recession-proof’ RE investments)
His gold theory was interesting, he’s done well due to the relative increase in gold to the NZ dollar even though gold has stayed mainly between US $300-400 from early 80’s with a couple of exceptions. But it was more an ability to put it in a deposit box & hide it from anyone who’s after your money while it retains a fairly constant value. He’s very strong on asset & personal wealth protection.
He relates a few stories of misfortune (his & others) regarding the hysteria at the peak of a boom, & advises to have loans split amongst banks. In fact he’s quite anti-bank based on what he’s seen in the past. I didn’t like the selective use of newspaper articles (on the apartment oversupply in Auckland & Australia, etc) but that’s a personal thing as I believe you can find a newspaper article to support any point of view at any point in time.
There’s a chapter on ‘leaky homes’ which is a problem quite a few NZ homes have had in the last 10 yrs due to different construction styles & materials, compounded by the odd dodgy builder. Although he advises how to profit from this situation as well
.
Summary:
A good read, again a very easy book to read quickly. Nice to get a perspective from a current bear. He writes as a ‘loveable rogue’ style i.e. stories if where he’s done a very good deal for himself, a couple of chapters are titled “Pest Control” & have nothing to so with termites. Based on his book the current slump will be about 7 yrs long, but if you do the work you can do quite nicely out of it. Good advice on what sorts of properties to avoid in the current market & why (although he recommends when to buy some of these properties i.e. if you buy a ‘leaky home’ budget double the cost of recladding & buy primarily for the land position & value. I disagree with some of his opinions, but as I write this the more I like it & will put it on my ‘to re-read’ shelf.
If you’re a newbie & wonder what the heck’s happened in the last few years this book is a must read. If you’re an experienced investor or you’ve done your homework, there are still some good strategies in here.
Rating: 7/10
Cheers
Mark
(I’ve also just read Dolf’s book Extraordinary Profits from Ordinary Properties, but I won’t bother reviewing that one, it’s a list of 100 odd properties with purchase price, current valuation, return, pretty basic…whoops…is that a review ? rating 4/10 for Dolfs book)
Now this book is interesting if you like people who put their opinions & hearts in the open. This guy is one serious bear who is predicting a wholesale slaughter in some areas of the market. He writes about the investment clock & why he believes in it. With 40 years of RE investing experience behind him he has been through a few boom/bust cycles so there’s a bit of credibility to his thoughts.
His doom & gloom is not so much that, but more a warning for those less wary who haven’t seen or studied their history. He relates his experiences in the past including getting completely done over in his first foray into Australia. I must admit I like someone who can not just admit their mistakes, but can relate their learning from the mistake.
His main message appears to be:
• Booms are followed by slumps/crashes – doh !
• The investment clock is real & it works – I’m going to overlay the S&P 500 index on his graph of Auckland prices just our of curiosity, I thought they operated on different timeframe)
• Slumps/crashes are where the bargains are found
• Have a survival plan for the inevitable slump
• Soft landings only happen in certain areas, others get trashed by up to 50%
• Ensure some money is in gold
• Avoid over marketed properties (apartment style stuff)
• Don’t follow the “guru’s”, but learn from what they do
• Be aware of which properties will get slaughtered first (he recommends certain sorts of commercial, or 3 bedroom brick in reasonable suburbs as the best ‘recession-proof’ RE investments)
His gold theory was interesting, he’s done well due to the relative increase in gold to the NZ dollar even though gold has stayed mainly between US $300-400 from early 80’s with a couple of exceptions. But it was more an ability to put it in a deposit box & hide it from anyone who’s after your money while it retains a fairly constant value. He’s very strong on asset & personal wealth protection.
He relates a few stories of misfortune (his & others) regarding the hysteria at the peak of a boom, & advises to have loans split amongst banks. In fact he’s quite anti-bank based on what he’s seen in the past. I didn’t like the selective use of newspaper articles (on the apartment oversupply in Auckland & Australia, etc) but that’s a personal thing as I believe you can find a newspaper article to support any point of view at any point in time.
There’s a chapter on ‘leaky homes’ which is a problem quite a few NZ homes have had in the last 10 yrs due to different construction styles & materials, compounded by the odd dodgy builder. Although he advises how to profit from this situation as well
.
Summary:
A good read, again a very easy book to read quickly. Nice to get a perspective from a current bear. He writes as a ‘loveable rogue’ style i.e. stories if where he’s done a very good deal for himself, a couple of chapters are titled “Pest Control” & have nothing to so with termites. Based on his book the current slump will be about 7 yrs long, but if you do the work you can do quite nicely out of it. Good advice on what sorts of properties to avoid in the current market & why (although he recommends when to buy some of these properties i.e. if you buy a ‘leaky home’ budget double the cost of recladding & buy primarily for the land position & value. I disagree with some of his opinions, but as I write this the more I like it & will put it on my ‘to re-read’ shelf.
If you’re a newbie & wonder what the heck’s happened in the last few years this book is a must read. If you’re an experienced investor or you’ve done your homework, there are still some good strategies in here.
Rating: 7/10
Cheers
Mark
