Wednesday 3 August 2011

The Greatest Trade Ever

Facinating book by Gregory Zuckerman on how John Paulson made $20 billion betting against the housing bubble. The Greatest Trade Ever outlines in simple (relatively) language how independent thinking pays off in the end. I'm nearly half way through the book and it's already got me thinking about the Australian housing market.

On page 50 it describes how by 2005 US home prices were on average almost 2.4 times annual incomes, compared with a seventeen-year average of about 1.7 times. How many times the average Australian income are Australian home prices at the moment? I've read from differnet sources recently that the median-priced property in Australia is approximately 7.8 times the average Australian wage!

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2 comments:

  1. Sterling Seah5 August 2011 at 08:07

    With the recent drop in the ASX and US Markets over the last week, it will be interesting to see what if any effect it'll have on the local property market...

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  2. Sterling Seah5 August 2011 at 08:09

    It was also interesting to see how some people were taking advantage of the drop in the stock market over the last few days. Today I receive two emails from the Australian value investing research house Intelligent Investor to renew my membership to take advantage of new Strong Buys!

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