Oct

4

Interesting that in Sydney's property market, the last area of housing to increase in price was from the socio-economically disadvantaged, and these guys were still buying when the richer suburbs had pulled up stumps. Now they are left with massive drawdowns and problems on a number of fronts, i.e. employment and servicing loans.

This seems to be a classic example of what to look for when analyzing where a market is in its cycle of price discovery — the least educated and responsive are last in.

It also reminds me of working on broking desks for years and dealing with major banks over significant U.S. figure releases. I surmised that there was a four tier response in price action over these numbers:

1. Locals with their own screens hitting bids and offers as these figures came out.

2. Bank Dealers on telephones (as it was overnight in Australia) being told what the numbers were, and dealing accordingly.

3. Bank Dealers asking to be rung after the numbers, and subsequently placing bets.

4. Retail customers calling in , and believing they where on the pulse as they only called five minutes after the numbers were released.

In reference to No.1, a bank dealer (who had recently seen some locals in action) said to me "I will never ever trade over a number again, after seeing the execution skills of those Locals, I am just too far off the pace!"


Comments

Name

Email

Website

Speak your mind

Archives

Resources & Links

Search