WHEN the world's richest investor speaks, people SHOULD LISTEN.

Warren Buffett, an 82-year-old American worth about $44 billion and nicknamed the "Oracle of Omaha", is the most quoted investor on the planet and countless financial experts swear by his words of wisdom.

Here are 10 of the most common Buffett quotes, and some lessons we can learn from them.

1. "Rule No.1: Never lose money. Rule No.2: Never forget rule No.1."

It's a handy rule to follow, but even an expert such as Buffett lost billions in the global financial crisis and said he did some "dumb things".
However, over the long term he has benefited by being conservative with his share investments and avoiding fads.
Bourke Shaw Financial Services principal Lawrence Orlando says that people can minimise losses by doing their research and avoiding a potentially fatal "she'll be right" attitude. "Investing ultimately is about making money, not losing it," he says.

2. "It is better to hang out with people better than you ... you'll drift in that direction."

Orlando says people should never be afraid to ask successful investors what they did and how they got there.
"I have found that experts are always willing to help out where possible," he says.
Catapult Wealth director Tony Catt says people should look for attributes in others that can help them.
"Success leaves clues," Catt says.
Wealth For Life Financial Planning principal Rex Whitford says you should avoid people who like to point out they are better than you.

3. "I don't look to jump over 7-foot bars: I look around for 1-foot bars that I can step over.

"Huge gains often only come from taking huge risks where the chances of losing everything are magnified.
"Too often investors go for a single big win rather than do the many small things that are already available such as having a strategy, reviewing regularly and diversifying," Whitford says.

4. "I buy on the assumption that they could close the market the next day and not reopen it for five years."

Catt says this mindset is crucial for investing in shares. "The quote truly tests your decision-making and your ability to think long term," he says.

5. "Someone's sitting in the shade today because someone planted a tree a long time ago."

This is one of Catt's favourite Buffett quotes and illustrates perfectly why taking a long-term view is important.
"We should never forget why we enjoy some of today's luxuries - most of them are because someone else had a long-term vision and was prepared to invest for the future," Catt says.
Orlando uses a bank savings account as an example.
"Saving $50 a week over 10 years will allow you to save $26,000, not including interest, and like the tree it has taken years to grow," he says.

6. "Price is what you pay. Value is what you get."

The price of an investment can mask its true value because of factors such as emotion, market booms or busts, and even tax considerations. "Sadly, all most people see is the price," Whitford says. "They are often unable to perceive value."
Orlando suggests following Buffett's strategy of seeking undervalued assets.
"Sometimes buying the worst house in the best street may provide good value for money," he says.

7. "We simply attempt to be fearful when others are greedy and to be greedy only when others 
are fearful."

This is probably Buffett's most famous quote and is at the heart of his belief in avoiding the herd mentality.
Catt says sharemarkets are often priced on emotional reaction and not logic.

8. "The investor of today does not profit from yesterday's growth."

Many investors like to jump on an investment that's doing well - that's why we have booms and busts - but they really should look to the future.
However, Assist Finance chief executive Jason Di Iulio says that people should still use historical trends, past performance and research data as important tools for making investment decisions.

9. "Whether we're talking about socks or stocks, I like buying quality merchandise when it is marked down."

Orlando says waiting for the right time to buy can be an opportunity within itself.
Whitford uses ANZ shares as an example. "Did anyone really think ANZ shares were only worth $11.83 in February 2009, down from $31.74? ANZ was and is quality merchandise and it still has not recovered to its previous high," he says.
Di Iulio says investing should never be a search for the next big thing.

10. "If a business does well, the stock eventually follows."

Catt says a key to sharemarket investing is to find good-quality businesses that will grow over time. "The share price will take care of itself," he says. Di Iulio says getting a return is important, but so too is the return of your investment. "Only invest in relatively liquid assets or those assets that can be easily redeemed," he says.

Anthony Keane

National Features NEWS.com.au

October 15, 2012

Homebuyer Confidence index rises 7.2% to its highest ever level

If you are interested in the property market you should take a look at this link. A very clever report by Genworth.

Genworth is Australia's biggest Mortgage Insurer and their role is to provide insurance to the banks against a loss when a property is sold for less than the loan.

This can be a risky business when you take into account that a new loan can be taken out at 97% of the property purchase price. 3% does not provide a lot of room for mistakes (somewhat ironic today given the Government are now introducing another levy for something the banking system are already well covered for).

An organisation that takes on this much risk must spend a lot of time and money researching and analysing the property market.

http://www.genworth.com.au/streetsahead/

This report gives us a state by state breakdown on the following items.

1. Confidence- up by 7.2%
2. Over 50% of income spent on debt- down by 3%
3. Comfort with debt (when the borrower has less than 20% equity)- up by 4%
4. Has recently experienced mortgage stress- down by 6%
5. Has an expectation of mortgage stress in the near future- down by 10%
6. Good time to buy a home- unchanged (up by 3% in NSW)

Well worth a quick five minute read.

By the way, next week there is going to be a 0.25% cut in interest rates by the RBA next Tuesday (yes I am saying that with a lot of confidence). This only means one thing for home buying confidence!
 
Source; Ian Simpson, Smartline Mortgage Advisor

Housing market sentiment improving but still favouring buyers

I interpret the data another way and counter the view it is a 'Buyers Market" rather, its as a "sellers market" - certainly sub $ 2mill in Sydney within a 7-10km radius of the CBD. Its a buyers market when there are more sellers than buyers - not when 80% of respondents think it is a good time to buy. Currently transaction volumes are up because there are more buyers than sellers ergo - "sellers market". Stock levels are down 20-30% on the same time last year in established/prime markets. If stock levels were at the same levels then transaction levels would probably not be up. Clearance rates reflect that its turned to a sellers market but we are now seeing a tightening and its happened in the last 2 weeks, stock levels are falling (which is consistent with this time of year) and I would suggest the 56% or respondents that think prices will rise over the next 6 months are the vendors whose expectations are still at the 2010 price level. I would also point out that if 86% of the 41% who think house prices will grow less then 5% over the next 6 months expect growth of more than 4%, if this happens then annualized growth would be circa 8% which is back at pre-gfc levels for many suburbs - I don't think this type of growth could be considered "subdued", if it materialised. I think the market and its satkeholdersshould want for and want 5% annualised growth at best, to allow the market to recover - it will lead to sustained confidence and lasting recovery in the housing sector for home owners and for investors looking at property as as an asset class again. I for one am not confident in the confidence level of this survey...the coal face tells a different tale! Housing market sentiment improving but still favouring buyers

Four secrets behind the fortunes of the BRW Rich 200: Myriam Robin

Reading through the stories of the 200 richest people in Australia, as ranked by BRW last week, it quickly becomes clear that no two fortunes are the same.

But there are commonalities in how Australia’s 200 richest people got that way.
The men on the rich list (all but 14 are men) worked long and took risks to get there. They chose strategic industries and saw their fortunes rise with global trends. They bet on economics as well as on themselves.

Want to join the Rich List? Here’s how to do it:

1. Start a business
The majority of the names on the Rich 200 are there because they started and led a business to national and global success.
But not just any business. Certain industries stand out.
For all we wring our hands about the future of retail, plenty of the fortunes on the Rich List were made off businesses that did just that. In fact, 27 out of the 200 made their fortune in retail.
Another area that can make you a fortune if you do it right is technology. As we revealed last Thursday, there are four Smart50 winners on the list, and all of them made their fortune in IT.
There are a few reasons why tech businesses make so many people rich. For one, your running expenses are likely to be relatively lower, giving you strong margins if your model is sound. Not to mention technology businesses can be scaled up relatively quickly, which makes them ripe for growth and economies of scale.
And when sold, technology businesses can command multiples far in excess of many other industries, landing their founders in the money even if the business itself isn’t making much money yet.

2. Failing that, invest in property
It’s not just a successful business that can make you rich. A full quarter (52 out of 200) made their wealth in property.

In Australia, this figure hasn't budged much for the last 30 years. No other single investment has been as likely to deliver steady returns over the past three decades.

3. Go it alone
Many businesses are founded by groups of two or more people. To get around the difficulties of separating out jointly held fortunes, the BRW list can consider cofounders and families to hold a fortune jointly. You’d think that, given this is the case, there would be plenty of duos and trios on the list.

But this isn’t the case. There may be benefits to working with a cofounder, but when it comes to making a lot of money, the experiences of the Rich Listers suggests you’re better off going alone.
In the 2013 list, there are a few families, but no cofounders. Atlassian cofounders Mike Cannon-Brookes and Scott Farquhar are both on the list, but with separate entries, holding $250 million apiece.

4. All work no play makes you very, very rich
At an age when most Australians are looking forward to retirement, plenty of people on the list are still signing deals and making money. For example, 86-year-old Len Ainsworth could have been happy resting with one company, Aristocrat. But in his 80s he built another – Ainsworth Game Technology – whose shares rose 400% last year.
The average Rich Lister is 65 years old, but far off retirement. Plenty of them aren’t the type to relax and smell the roses anyway. For example, Glencore Xstrata chief Ivan Glasenberg (fifth on the list with $5.61 billion) recently said that his staff “don’t do” work-life balance. Instead, he said, they were all rich.

This article originally appeared on SmartCompany.

There are always "off market" listings, but tracking these down if your an expat or even a local can be difficult and time consuming!

Increasingly the most valuable resource is Time and most of us don’t have enough of it!  

So if your house hunting, how do you know if you’re seeing everything that is available in the suburbs you want to live in, and honestly, who has the time to uncover them all anyway? 

Agents and increasingly vendors, let us know that a property will be coming on the market or in fact will be marketed only via an agents database.  Everyone’s property path is different and for many sellers – particularly over $3 million, a discreet listing and sale is preferable for many reasons; its less disruptive, they feel they have more control over the next move perhaps, they don’t have the neighbours “tyre kicking” at open inspections, they don’t have friends, family and colleagues knowing their business, for these and other reasons an off market transaction can be desirable.  

Agents and vendors will seek out buyers agents because we only act for retained and finance enabled clients so that we can perform for them and pounce on the right property when it comes up, agents of course want to sell to buyers who can perform, if they have a property and we have a client, selling agents and vendors are very interested.  This is true of residential and commercial property.  Our clients like that we give them access to the total market and that we have relationships with the agents already established, they get to see properties they ordinarily may not have sourced as well as pre-market (we often deal before they reach the market) opportunities and of course off market.  It’s important though to vet, not all properties at a high level meet the criteria, so knowing what to ask and filtering saves a tremendous amount of time. 

You can deal with every agent between Woollahra and Vaucluse or Avalon to Palm Beach or you can deal with on agent and get access to the total market and leverage someone else’s time so you can use your time to do the things that are more productive, enjoyable and profitable.