Letters of the Week

Bullish or bearish?

I'm interested to know how Eureka Report can shift from being very bearish to mildly bullish within four weeks. Have the fundamentals shifted that much in such short period? I acted – as you did – on your pre-Christmas sentiments. Interested in your views.

– A Gale

Editor’s response: As you can see from the letter below, a “diverse range of opinions” has been a hallmark of Eureka Report. Alan Kohler is our most prominent commentator; he remains fundamentally bearish and extremely cautious about world markets. However, he has not ruled out the possibility of the market having a bull run in the early part of the year. Short bull runs are not inconsistent with bear markets: witness the 1930s or 1970s.

Separately, a range of commentators we have recently published, such as Paul Bloxham and Shane Oliver, have clearly become slightly more bullish about the general conditions of both local and overseas markets in recent weeks. It is important for us to ensure our subscribers are familiar with the current thinking of key opinion makers in the market so we continually publish notes from external commentators such as these two economists. I hope this clears the air.

London property

I am curious to know if you have someone who can give an informed opinion on property prices in central London. In a world where everyone is deleveraging, asset prices are plummeting and property bears are making ever more dire predictions, why have prices for central London property increased consistently since 2007? (I'd say up about 20–30%, at least). This seems to be across the board for all residential property there. Is this market going through the "mother of all bubbles" or is it being driven by sound fundamentals? I'd like to know. I'm an avid reader of your newsletter. I believe it gives an informed, balanced and diversified range of opinions – information that is impossible to source from the mainstream media and the so-called financial services industry. Keep up the good work!

Name and address withheld

Editor’s response: Unfortunately, our property expertise does not extend to central London (someday perhaps!). For the moment our coverage is restricted to residential property in Australia.

Welcome, Max

Very glad to see the new contribution from Max Newnham (see Ask Max). I’ve read his column in the past and have found his knowledge to be spot-on and very practical. Congratulations to you for adding him as a regular contributor.

– JP

To read this week’s letters, click here.