‘Ignore the doomsayers. I’m telling you now…
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OFFICIAL TRANSCRIPT
Hi, my name is James Woodburn.
Chances are, you’ve heard a hundred warnings about the state of the Australian economy today…
ABC warned we face a ‘profound downturn’, triggered by COVID lockdowns.
In early 2021, The Guardian dubbed the rapidly rising property market ‘insane’.
And even the IMF has taken aim at Australia, claiming at the start of 2021 that property prices could ‘unwind in a disorderly manner’.
In short, though, our stock market recently hit all-time highs, and property prices across our biggest five cities soared 15% in the last year…
There’s no shortage of doomsayers claiming we’re on the verge of economic Armageddon.
But today, you’re going to get a VERY different view on the Australian economy…
… and your financial future…
…one that flies in the face of those gloomy forecasts.
Today, I’m joined by two leading forecasters who claim that Australia’s booming stock and property markets are the FIRST PHASE of an uptrend that’s going to see vast sums of money made here in Australia.
In fact, they claim that it’ll create as much as $4 trillion for smart investors all over Australia in the next five years.
It goes without saying that $4 trillion is a LOT of money…
It’s more than all superannuation funds — put together.
It’s more than twice the value of the ENTIRE ASX 200 stock market index.
In fact, it’d be worth $160,000 per person in Australia.
BUT it’s not that simple…
Because this potential windfall WON’T be EQUALLY distributed.
In fact, the vast bulk of it will go to INVESTORS who make the right moves with their money.
And that’s why we’re here today.
In this video, you’re going to see the five moves my expert guests suggest you make if you want the opportunity to capitalise…
AND explain why if you miss out on this opportunity, you might have to wait until the 2040s to get another one like it.
More on that in a second.
But first — I should be clear about one thing.
What you’re about to hear is not what you’ll get from the mainstream media…
…government economists…
…or even organisations like the IMF.
That’s because — according to my two guests — they’re all missing a critical piece of the puzzle when it comes to understanding what’s really going on with stocks, property, and the economy.
This ‘missing link’ explains why markets have soared since the pandemic, despite the gloomy looking economy.
And my guests claim that it’s far more important than interest rates, GDP, or stock market valuations in the property market.
Understand it, and the seemingly random or irrational moves in the market will suddenly make total sense.
Not only that, they believe it could help you pack DECADES of wealth creation opportunities into the next five years — in just a few simple moves.
And these guys head up a research publication that has an extraordinary track record of getting things like this right:
It didn’t take long for that prediction to play out…
First, the stock market roared back — and made a new all-time high within a year of that call:
And before long, property prices were following the same timetable.
In one 12-month period starting in September 2020, property prices in Sydney soared nearly 20%...
Prices in Melbourne jumped 12.5%.
Real estate in Brisbane rose 16.4%.
In fact, property values across the whole market rose $2 trillion.
So far…everything is playing out precisely as they predicted.
But as you’ll see in the next few minutes, they believe we’re in the early stages of a much bigger and more profitable move higher.
Miss this one…
…and they believe you’ll have to wait more than a decade to get another opportunity like it.
So here’s what you’re going to discover in today’s show:
That final point is CRUCIAL…
We’re not here to claim that stocks will go up forever, or ‘the time to buy property is always today’.
This is a lot more specific than that.
You’re about to get a five-year gameplan of the smartest things to own AND when to sell them.
We’ll come back to that later in the show. But first, let me introduce my first guest — stock market investor and trader Callum Newman.
Callum’s spent the last decade working for one of the world’s biggest investment research networks, with offices in London, Paris, Mumbai, Sao Paolo, and Buenos Aires, as well as here in Melbourne.
He also writes The Daily Reckoning Australia, a free daily guide to the financial markets with a readership of tens of thousands of savers and investors.
Now, there are plenty of people out there willing to predict that Australia is on the cusp of a big downfall.
But there aren’t many people I know of who are saying what he’s saying right now.
I started by asking Callum whether we’re REALLY on the cusp of the biggest wealth-building opportunity in Australian market history.
Callum Newman:
Woody, we’re not on the cusp, it is already happening.
Take a look at the Aussie stock market, it hit an all-time high in August 2021, and that was with the two biggest states, Victoria and New South Wales, in lockdown.
They rode right back out of the March 2020 low. Same as the US, they smashed through their previous highs in 2020 and into 2021. You look at India, their stock market is absolutely booming.
Then, we look at what’s going on in property. Here, prices rose this year at the fastest pace since 1999. Over in the UK, house prices are roaring.
In the US, the housing market is roaring.
‘We are slap bang in the middle of a property boom and a stock boom, despite the fact that the world economy isn’t exactly roaring.’
James Woodburn:
So clearly something big is going on. I guess the real question then is why is this happening?
Callum Newman:
One word: land. Right?
Land is the critical thing to understand about all this.
Mainstream economics does not teach this. And I can tell you from personal experience, from 2013 to now, all these years I’ve written for Cycles, Trends & Forecasts, why housing prices in Australia would go up.
Now, everybody in previous years told us we were wrong in that it was a bubble and there were too many debts, but it didn’t happen. They have reasoned as we have said.
What we’re seeing is a land price boom right now. And again, nobody else analyses the economy or the asset markets in this way. And it is a mistake if you don’t understand land, that’s why people got wiped out in 2008.
Everything that we’re seeing now, it’s population growth when the immigrants come back into Australia.
The infrastructure spending we’re seeing from both the federal government and the state governments, the economic growth, the credit growth from the banking system, it all feeds back into the land cycle.
The value of Australian land grew in 2020 by $400 billion, and that was in the middle of a pandemic, and this year we should hit about $600 billion. So that’s a $1 trillion increase in a couple of years.
So that’s what’s really driving this boom.
James Woodburn:
So we’re seeing a land price boom in Australia today.
‘And that’s why your first money move is to put land at the heart of your financial strategy.’
But why does that lead you to predict that this will continue for the next five years and not come crashing down like many people are predicting?
Callum Newman:
Well, earlier I told you that most people don’t analyse the economy through the land market, right?
The other thing they don’t appreciate is it moves in a very predictable way. It’s an 18-year cycle and we break it down into two seven-year halves, for the 14-year rise period, and then later on we get a full year down period:
‘Now we are at the start of the second half of the cycle, this historically is when we get the biggest boom phase of all.’
James Woodburn:
And that brings me to my second guest, Catherine Cashmore.
Catherine’s the president of Australia’s oldest economics organisation. In fact, you might recognise her from the TV, plus she’s given lectures at Sydney University and RMIT.
Not only that, she’s an expert on the real estate market, having helped hundreds of buyers and developers find and negotiate real estate deals. I asked her how far back the Grand Cycle goes.
Catherine Cashmore:
The land cycle can be traced back hundreds of years.
And it’s important for investors to understand that we’re not just going from what happened in recent history, we’re looking back hundreds of years and we’re corrugating data from those hundreds of years to see what’s happened to land prices over that time.
The cycle itself was first discovered in the 1930s. It was first recognised as its relationship to land values in the 1930s by a chap called Homer Hoyt, who wrote One Hundred Years of Land Values in Chicago.
Around the same time somebody else, Roy Wenzlick, who was a real estate valuer, was also doing similar research and also discovered this pattern. It was an 18-year cycle and they realised that there was around a 14-year period where land values would increase in value, and then you had a four-year period where there would effectively be a crash and they would decrease sharply for around a four-year period before the whole cycle would start again.
Homer Hoyt thought that it was just limited to Chicago. Chicago was a growing city at the time, had a lot of population growth, it was fast developing, there was a lot of construction going on. So he never really looked upon America-wide.
But as other researchers came in, Roy Wenzlick, another chap Clarence Long, various economists, real estate valuers collated real estate data, which wasn’t easy at the time. It wasn’t like we have now where it’s digitalised and it’s recorded digitally.
So you can see they had to scrape data from real estate adverts in newspapers. But as they collated this, they realised that this wasn’t restricted to one particular area, in fact, this was a US land cycle. And so you can trace it back in the US to around the 1800s, when the US started to sell-off its land.
Fred Harrison, who’s a UK economist, very well-researched economist, traced this cycle back in the UK and realised that the cycle in the UK was exactly the same, that there was an 18-year pattern as a boom and bust in land values. And he traced it back in some of his books to the 1600s.
So this cycle itself has a long historical period. And if you look at what’s happening in Australia, we have correlated with this cycle, certainly over the last three cycles.
‘We haven’t always had policies in Australia that have encouraged land values to increase disproportionately.
‘We have it now.’
James Woodburn:
And that leads us nicely to today. I asked Catherine where we are in the cycle, and where will that lead us next.
Catherine Cashmore:
We know from history that every cycle exceeds the previous cycle.
The peak of each cycle exceeds the previous peak of the real estate cycle. We also know that generally the second half of the cycle is far more volatile, there’s far greater gains in the second half of the cycle than there is in the first half of the cycle. And you can theorise why that might be.
The first half of the cycle, you’ve just had a land-based led collapse. And so you have a lot of inquiries into the banking system and there are safeguards that are put in place. And we saw this happen obviously in the US with the subprime crisis and the crunch not just in the US, but in Europe as well.
It’s fresh in everybody’s memory. You don’t have as much speculation in the first half of the cycle.
Then you get a recession somewhere in the economy, which is your mid-cycle, and everybody thinks they worry about land prices.
How often do you open a newspaper and there’s some article about the market booming and is about to collapse from people that have no idea why land prices are high or how land affects the economy?
And then you will hear from the government, ‘Well, we just need to increase supply’, which is the biggest myth that you can perpetuate because that’s not the reason that land prices are high.
By the time we’ve got through that recession and nothing’s happened to the land market, and particularly in Australia, when it’s been quite a long period of time since we’ve had a land price collapse, people start going crazy, to recover the economy, the banking system, the regulation on the banking system is loosened.
We’ve seen this happen in recent times with the Royal Commission into the banking sector. It was a great big public display and then none of the recommendations have been implemented.
So we see loosening in the banking system, the banks are able to lend more, land prices start to boom, everyone thinks that the land market is indestructible, it’s never going to collapse.
And so you get major speculation in the second half of the cycle. This cycle is particularly unique in regard to that, because not only did we say the cycles, trends, and forecast, it was going to be the biggest boom of all time, we could see it on the charts, we understood it from the history of the cycle.
‘I don’t think even we would have understood how great that boom was going to be, but it’s defying all expectations.’
You need to understand that with property prices, when we talk about property prices rising, the major increase in prices is in the land value because buildings depreciate and its land and its location, and to some extent, the zoning of that land that increases in price. Understanding those three things is a function of understanding what land price is.
We looked at some data and we looked at the last 10-year increase in land prices, the average increase over the last 10 years.
And the reason that we can do this in Australia, is Australia is one of the few countries that actually records land prices on their own without the property on top.
And over the last 10 years, we said, well, the average has been just over 4% over the last 10 years, and that means from where the aggregate of land prices is now to the end of this cycle, land price is going to be worth around $9 trillion at the end of this cycle, which is a big increase, right?
Since then, latest data has come out telling us what has happened in the past 12 months to land prices. And this is exactly what we forecast when we said that we were going to have the greatest boom that we’ve ever seen.
Because property prices cloud things when you’ve got buildings involved, we want to know what the early improved value of the land is doing. And land prices over the last 12 months have gone up more than 27%, and that’s triple the last record increase in land prices. It’s an enormous amount. And more than 97% of that is residential land.
So we’re seeing an enormous boom in land prices.
And now, if we average that from what we’ve seen, if we include that in the data over the last 10 years and average it out and say, well, where are we going to be in 2026, which is the peak of this 18-year cycle, the forecast peak, then we’ve got land values being worth more than $11 trillion.
Now, it might be difficult to understand that when you’re just somebody sat at home, listening to it.
So I can tell you what you do need to understand.
If you buy a block of land today, there’s going to be such an enormous increase forecast between the purchase that you make today and how much it’s going to be worth in around five years’ time, that even though you might think that you’re paying a big price today, you’re going to look back and be very glad that you got into the land market.
James Woodburn:
It’s safe to say a $4 trillion increase in the price of land in the next five years would have a massive impact on the rest of our country, and that includes the stock market.
I asked Callum whether he thought the second half of the cycle corresponded to big stock market booms too.
Callum Newman:
Absolutely.
This is where we are today.
‘This is where the biggest gains are made in property, in commodities, and also the share market.’
In the second half of the last two cycles, the Australian stock market increased between 150% and 430%.
So take the last cycle, the ASX rose 147% from March 2003, to the November 2007 high:
And if we go all the way back to the 1980s, the All Ordinaries, as it was called then, rose 432% from March 1982 to a high in September 1987:
Now, both of those moves came out of short and sharp recessions, which were very scary at the time, exactly like what we saw in 2020.
James Woodburn:
If we do see the cycle repeat, where could the stock market end up?
Callum Newman:
Well, I’ll tell you what happens if history repeats itself, the ASX is trading around 7,500 points as we record this.
A 150% rise would take us to around 18,000 points on the ASX, and a 400% rise would take us well over 36,000 points.
‘Now we can’t predict or see the future, and these aren’t specific forecasts, but we know the cycle and we know history, so there’s a lot of potential money at stake here.’
James Woodburn:
Callum and Catherine’s prediction is an extremely bold one to make.
There aren’t many people out there willing to claim we’re in the early stages of one of the biggest booms of all time.
But as you’ve just seen — it has a very specific and well-reasoned argument to back it up.
To recap what you’ve just seen, both Catherine and Callum use the LAND price cycle to guide their investments.
This cycle tends to last roughly 18 years.
It sees seven years of rising prices…
…a small pause…
…and then a BIG seven-year upswing — leading to a peak, a crash, and a recovery.
Right now, they believe we’re at the start of the second half of the cycle. They’re forecasting a huge boom in land and stock prices, peaking in 2026.
Now, these are the financial markets we’re talking about.
There are no guarantees here.
And no one can see the future.
However, Cal and Catherine’s research CERTAINLY seems to explain what’s going on right now.
It explains why land prices have increased by roughly $1 trillion in just two years.
It explains why the property market is soaring.
And it explains why we’ve seen the ASX break out to new highs in 2021.
Cal and Catherine expect this to continue into the peak in roughly 2026.
If land prices continue their current trajectory, we’ll see the value of land in Australia hit $10 trillion by the end of the cycle.
That would cram nearly two decades worth of land price appreciation into just five years.
But here’s the crucial point…
While trillions of dollars could be made in the near future, not everyone will benefit from this boom.
The LION’S SHARE will go to the people who position their money to capture it.
Of course, that involves taking an educated risk with your money.
There’s no getting away from that.
All investing — whether in stocks or property — involves risk.
There’s always the chance you could lose money.
But if Cal and Catherine are right — taking a risk today could pay off handsomely by 2026.
And that’s what we’re going to cover in the second part of this show.
‘You’ve already seen that the first thing Cal and Catherine suggest you do is put land at the heart of your investment strategy.’
But now we’re going to get a lot more specific and share four more money moves you can make right away.
Whether you’re a stock market investor, you manage your own super, invest in property, or you’re just getting started…
These are moves Callum and Catherine believe all Aussies need to be thinking about right now.
And given we’re ALREADY seeing a red-hot property market…
…and the stock market has ALREADY made an all-time high…
…there’s really no time to waste here.
I started by asking Catherine what steps she suggests PROPERTY investors make today.
Catherine Cashmore:
A subdividable block of land.
And when I’m talking about land, it can have an old house on, it doesn’t mean that it doesn’t have to have a rentable house on it.
But land that is in an area which is effectively landlocked, so a very popular suburb that is built out and built up where the land is beginning to be subdivided, is a very powerful investment to give you choices of whether you want to develop that land and make money from it.
But also understanding that you are sitting on a block of land in the path of progress, a block of land in an economy where a lot of money is being poured into the land market, a block of land where a lot of money has been poured into infrastructure investment around that land, and a block of land that you know from your knowledge of the cycle is going to continue to increase in value till around 2026.
‘It’s an opportunity that you cannot afford to waste because the rise in land values that we’re going to see over the next five years is not going to happen again for quite a few years into the future.’
Understanding that the second half of the cycle is historically stronger than the first, and also understanding that we’ve been through a mid-cycle recession that has changed the way people understand location.
So right now, the opportunities that are being offered to investors we didn’t have in the second half of the last cycle because we’ve never seen an exodus from inner cities into regional areas where the land price is pretty cheap, comparatively, where you can get into the land market under $500,000.
But because of what’s happened over this last 12–15-month period, where there’s been so much speculation going into land because of the stimulus that’s been paid into the economy, land prices in some regional areas have doubled in the last 2–3 years.
And they’re paying the investors in some areas a positive yield as well.
‘This is historically unprecedented, what is happening now in Australia. We’ve never seen it in any other cycle.’
We’ve never seen a period where all markets in Australia, both city and regional, are rising at such a rapid pace all at once.
And we’ve never had an opportunity like I’ve said, where you can get into markets that are relatively affordable now, compared to what you would pay in the city and have similar rises to what we’ve seen previously in the capital cities in Australia.
So this is a golden period to take advantage of, but you have to understand the land cycle and you have to understand where and what to invest in if you really want to maximise the gains that you can get. And I can tell you that.
James Woodburn:
‘So the second money move Catherine suggests you consider is to look for subdividable plots of land in landlocked areas.’
But I asked her where in Australia she thinks the biggest property opportunities are…
Catherine Cashmore:
What we do also know historically in Australia, and this is particular to Australia’s land cycle, is that Melbourne and Sydney do very strongly in the first half of the cycle.
And we know that the other states really don’t go very far in the first half of the cycle. And you can see this in recent history.
In the first half of this cycle, for example, after the downturn in 2008, when land prices started to rise, you really had a strong run between around mid-2012 to a peak at the end of 2017. It was primarily in Melbourne and Sydney.
And people that lived in other states would get very angry when everybody was saying, well, the market’s booming and they were saying, well, prices here are going nowhere.
So, Adelaide, for example, Perth, areas of Brisbane, some suburbs in Brisbane did OK, but generally the focus has been on capital cities more than it has been on regional markets.
We also know that in the second half of the 18-year cycle, particular to Australia, the smaller capitals by population do better in the second half.
And again, that’s exactly what we’re seeing now. They come because they’ve gotten nowhere in the first half, they’re coming from a lower base.
‘There’s been a lot of speculation in Melbourne and Sydney, and this is understandable as prices start to get high, too high in Melbourne and Sydney, investors in particular take their money elsewhere and start speculating elsewhere because they’ve been priced out.’
It’s not just that it forces yields, the rent of the property downwards, the yield of the property downwards, because prices are getting so high, and the yields are obviously being depressed because of it.
We’re seeing that right now at a phenomenal pace because areas like Perth, for example, which is really tied a little bit more to the commodity cycle, more so than the land cycle, these are the types of things that you will learn if you subscribe to Cycles, Trends & Forecasts.
But prices have been depressed in Perth for such a long period of time that now the market is turning, it’s attracting a lot of speculation, it’s attracting population growth, which it hasn’t had for quite a while.
And that means that the land market is going very strong, but you have a period of time right now, where it is possible to get positively yielding property, to get positive yields, but also in a rapidly moving market where you know that you’re also going to get strong capital gains.
I feel like it’s a golden egg of investment. It’s the thing that we haven’t seen in Australia for a long period of time. So these are unique opportunities.
And so if investors are thinking about investing now, it’s really worth exploring other markets out of the major capital cities.
It doesn’t mean that, the most populated capital cities I should say, it doesn’t mean that Melbourne and Sydney won’t continue to rise or that they won’t do very well, but it’s feasible to think that those markets will slow compared to other markets — Hobart, areas in Tasmania, areas of Southeast Queensland, Adelaide, the Northern Territory, Perth, and areas of Western Australia.
James Woodburn:
But though the cycle focuses on land, making it the key driver of the property market, its implications are felt much more widely.
It’s also a driver of the wider economy and stock market. And that’s where Callum comes in. I asked him how he thinks stock market investors should be positioning themselves for the second half of the cycle.
Callum Newman:
This is really simple: you structure your portfolio around businesses that are deeply connected to the land market, and you do it through banks, builders, and REITs.
James Woodburn:
‘OK. So move three is build your portfolio around banks, builders, and REITs.’
So let’s take each of those in turn and explain why that is. Can we start with the banks first?
Callum Newman:
That’s easy. OK. So everybody knows the Big Four banks here in Australia. What do they do? Well, 80% of their loans are mortgages. So they’re lending against land. That’s the collateral that they want to see and want to have.
Now, I’ve followed their results that they’re reporting — all of them are reporting credit growth. They’re getting new borrowers from homeowners, first home buyers, and we’re seeing the investors come back into the market, which had exited previously. So all that is great news for banks.
Then we have the builders.
One of the things we look for in the second half of the cycle is big construction and infrastructure projects rather.
Now, what are we seeing? The federal government and the state governments all around the country are pumping huge amounts of money into these projects. Now, one example: By 2022, Deloitte claimed that there’ll be $250 billion of projects around infrastructure underway around the country.
Now, another thing that we can say about builders that has to do with the residential market, is all of them have big land banks.
That’s how they plan out their future projects. Now those land banks are appreciating in value every single day. The final one, real estate investment trusts. Now these are great if you’re looking for income. They own properties, so it can be offices, it can be shopping malls, or a self-storage etc., and they can develop them, they can grow their earnings that way.
They pay out their income, so everyone here in Australia, if they’re looking for cash flow, they can’t get it from the banking system anymore, deposits. The bonds pay very little. REITs still offer very good yields, plus you can get the potential capital appreciation as the property boom rolls on.
James Woodburn:
OK. So that’s the banks, the builders, and the REITs.
‘Let’s now talk about buying commodities Callum, because that’s the fourth move that you suggest investors make today — buying into the next commodity boom?’
Callum Newman:
Absolutely.
One of the reasons we’re so positive on Australian real estate is we are seeing a big commodity boom, and Australia is a big commodity producer, we’re one of the top exporters for iron ore, coal, nickel, gold, natural gas, plus we have the electric vehicle revolution happening.
James Woodburn:
Lithium.
Callum Newman:
Lithium. So lithium stocks, I can tell you, in the last year have gone absolutely bananas. Some of the gains are well over 500% in around 12 months. That market is not going away.
We’ve recently had rallies around coal and uranium, why? Because we have a big demand for energy forming around the world as countries like China, Southeast Asia, India. There’s still a lot of people coming up. That’s going to drive huge demand for resources, and Australia’s very well-placed to supply them.
James Woodburn:
Now, of course, we saw a major commodity boom in the second half of the last cycle as well, last time roughly between 2001 and 2008. We’re going to see that again, right?
Callum Newman:
Well, I think so. Now, if we take a look at copper, oil, silver, gold, even lead back in the last cycle...
James Woodburn:
They went ballistic.
Callum Newman:
They all were ballistic. In fact, the CRB Commodity Index as a whole increased by four times:
James Woodburn:
And you’re expecting to see similar kinds of price action as we approach the peak of this cycle?
Callum Newman:
We’re already seeing it. All right. That same Commodity Price Index I mentioned has doubled since the COVID crash and individual commodities have soared too.
We mentioned lithium earlier, copper has more than doubled since the pandemic.
Every electric car is going to need double the amount of copper than a conventional one does.
LNG prices have gone ballistic. They bottomed around $1.50 in May 2020 and have peaked above $6 in October 2021. Huge demand for energy out of Asia.
We’ve seen it in coal, alright. It made a low around $50 in 2020, and it hit $250 in 2021. Alright.
But this is just the state of commodity prices usually run in massive bull markets.
Why does that happen? Well, the lead times are so long. Nobody just switches on a copper mine. You’ve got to get permits, you’ve got to get financing, you’ve got to get the workers, you’ve got to mine it, you’ve got to get it to market, alright?
‘This takes years. So we can expect big price rises for many more years to come.’
James Woodburn:
And this is the perfect time to talk about how you can get a hold of ALL of Callum and Catherine’s work…
…including specific opportunities in the stock and property market.
See, they don’t just provide big picture analysis.
In a monthly advisory called Cycles, Trends & Forecasts, both Callum and Catherine get A LOT more specific.
In fact, they give you everything you need to understand the Grand Cycle…
…they relate that to what’s going on in the stock, property, and commodity markets…
…and they provide stock recommendations to help you turn that knowledge into action.
Put simply, if today has been a ‘lightbulb moment’ for you…
…and you want to position your money to capitalise on this opportunity…
…then you’ll love Cycles, Trends & Forecasts.
But don’t just take my word for it.
Cal and Catherine have prepared a whole series of reports to help you position your money to capitalise.
These reports are a great way to turn what you’ve seen today into action — and serve as a great introduction to Cycles, Trends & Forecasts.
The first is called, ‘The Grand Cycle Almanac: Your Financial Gameplan 2022–2026’.
This report lays out what you can expect to happen in our economy — and the wider global economy — from today through to the peak of the cycle.
But that’s just the first report that the team would like to send you today.
The second is called ‘A State-by-State Guide to Capitalising on Australia’s Biggest Ever Property Boom’.
As you’ve seen today — and no doubt noticed in recent months — we’re in the middle of an epic property boom.
Prices in August 2021 rose at the fastest annual pace since 1989.
It’s an extraordinary time.
And as you saw earlier, Catherine’s work not only explains why it’s happening — but forecasts what she thinks is coming next.
If she’s right, we still have FOUR YEARS of booming property prices.
And this second report explains what YOU can do to capitalise — on a state-by-state basis.
That report is yours to keep when you become a subscriber to Cycles, Trends & Forecasts.
But there’s more.
Callum has also prepared another guide for you, called ‘Three Smart Stocks for 2022’.
Earlier you saw him explain why he suggests you put banks, builders, and REITs at the heart of your strategy.
This report takes that a step further and NAMES three specific stocks Callum recommends you consider buying today.
You’ll get a full write up of his rationale for recommending these stocks — plus the risks and rewards involved.
And there ARE risks. This is the stock market we’re talking about.
There are no guarantees.
That’s why you should only ever invest capital you’re comfortable taking a risk with — and potentially losing if things don’t go to plan.
It’s Cal’s job to try and ensure that doesn’t happen.
But in the stock market, as in life, you can never be certain of what’s coming next.
Know that going in.
And that’s true of a FOURTH report you’ll receive if you become a subscriber today.
It’s called ‘How to Play the Commodity Superboom’.
And it does exactly what it says on the tin.
You’ve already seen that commodity prices are exploding in value across the board.
In this report, Cal explains where he thinks the NEXT big opportunity is — and shows you what to buy to capitalise.
That report is yours — alongside everything else I just told you about.
All you have to do is become a Cycles, Trends & Forecasts subscriber today.
That means on top of the introductory reports, you’ll get the next 12 monthly issues of Catherine and Callum’s newsletter.
This is your expert guide to the Grand Cycle. If the trends we’re seeing in the property and stock markets persist, it’s going to be extremely valuable.
As part of this subscription, you’ll get:
Put together, Cycles, Trends & Forecasts is the perfect way to understand the stock, property, land, and commodity booms we’re living through, as well as learning how to set yourself up to profit from it.
Cal and Catherine expect there’ll be corrections along the way, of course. And they’ll be right alongside you to guide you through them.
And the last thing you need to worry about is the price. A one-year subscription to Cycles, Trends & Forecasts costs just $149.
But you can get your first year for a discounted rate of just $99 by clicking the link below this video. That fee is FULLY REFUNDABLE for the next 30 days.
But as I said at the top of the video, Catherine and Callum’s work ISN’T just about buying stocks and property and holding on forever.
It’s smarter than that.
Cal and Catherine expect the cycle to peak in 2026. What happens AFTER that could take a lot of people by surprise.
That’s why they’ve prepared a fifth and final report for you today called ‘Preparing for the Peak — How to Play the End of the Cycle’.
I asked Catherine to explain more…
Catherine Cashmore:
There are three phases to the cycle.
You’ve got the first half of the cycle that leads into the mid-cycle recession.
You’ve got the second half of the cycle, which is stronger than the first.
And around two years from the end of the cycle is a phrase that Fred Harrison, the economist in the UK, coined the winner’s curse period of the cycle.
‘And this is where land prices go pretty much vertical.’
And this stands from all the research that I’ve done of the 18-year cycle in Australia, you can see this phenomenon happening, where we’ve had speculation into the end of the cycle.
In fact, if you think the market is moving fast today, it was moving in the winner’s curse of the last land cycle that led into the crash in 1991. So in 1998, 1999, the land market was going vertical.
And that’s a function of what happens around two years out from the end of the cycle, so you see a lot of speculation in land.
And, of course, people don’t realise that there’s a crash coming, and they are investing in land with no thought about what it might be worth, what real estate might be worth. Interest rates at this time are usually rising as well and quite rapidly.
So around two years, one and a half years or two years out from the cycle, the end of the cycle, you see a rapid increase in interest rates, not just marginal increases because the economy is improving, but interest rate rises increasing specifically to slow the property market.
And we saw this into 2007, a lot of interest rate rises through 2006 to 2007.
And because the productive sectors of the economy have been eroded away because so much money is going into the land price and nobody realises how it’s affecting the productive sectors of the economy, because everybody thinks they’re getting rich off their land value going up, there comes a point where people cannot afford to pay the debt that they’ve got on land, they can’t afford to pay the land rent. And when that happens, you start to see the cracks in the system.
You start to see the mortgage fraud, the control fraud that has gone on in the banks, where they’ve lent to people that can’t really afford it.
You start to see the businesses, an increase in homelessness, an increase in people living further away from their work because people have speculated on land and held it vacant, held sites vacant, so you have to go further and further out to find affordable land, which leads to productivity losses in the economy.
Somebody that owns an empty shop at the bottom of an apartment building, where it has a lot of empty apartments in it because people are buying for speculation and not necessarily buying for yield, and they haven’t got the business.
And so businesses are being eroded away. And when the interest rates rise and people can no longer afford the debt, which is what’s happening at the end of the 18-year cycle, then you’re at the point of a collapse because suddenly there’ll be a flood of foreclosures that hit the market.
‘Suddenly somewhere you will hear of a banking crisis, a banking collapse. There’ll be a crack somewhere that starts the ball rolling. You don’t want to be the last in.
‘If you’re going to invest, you want to take advantage of it now, and then you want to decide what you’re going to do at the end of the cycle.’
It doesn’t mean that you have to sell your block of land or your properties at the end of the cycle, when you understand that normally you will see the market exceed the previous peak of the second half of the cycle in the first half of the next cycle.
But what it does mean is that you need to be conscious of what’s going to happen, you don’t want to be over leveraged in land.
James Woodburn:
You’ll find more details on all of that in the final report the team have put together for you called ‘Preparing for the Peak — How to Play the End of the Cycle’.
To quickly recap, here’s everything on the table for you today:
But remember what you’ve seen today.
Catherine and Callum’s prediction is ALREADY playing out.
Look around you and you see signs everywhere.
The property market is on fire, rising by nearly 20% in a single year.
Stocks made an all-time high in August 2021.
Commodity prices — from oil to copper to coal — are soaring.
And yet there are still doomsayers lining up to claim this.
But all the evidence we have so far shows this is happening.
And if Callum and Catherine are right, we’re still in the early stages of the boom…
Callum Newman:
Absolutely. As we say, we’ve got a big five or six years coming up, we’re going to get big property growth around Australia and around the world, we expect to see very strong stock price moves, and we expect to see a massive commodity boom happening. The hard part is there are so many different ways to play it.
‘You can make money in commodity stocks, you can do it through real estate stocks, you can do it through the banks share market, ETFs, private property investments, commercial property, there’s more ideas than I can focus on.’
James Woodburn:
OK, Callum, we know where we are in the second half of this cycle today. We know from previous cycles what happens in the second half of the cycle. It’s generally where the biggest gains are made.
We also know in theory then we aren’t going to be in this situation again until the 2040s.
Callum Newman:
Absolutely. And I cannot emphasise this enough. You actually have to emphatically take advantage of it now for the next five to six years, all right?
The cycle is a long one, but we’re in the second half of the cycle.
So we’ve been through the first phase. Now, I was writing all through those years about opportunities in the Sydney and Melbourne property market and US stocks, as I mentioned earlier.
We had a lot of people say that it was a bubble, there was too many debts that it was central bank money printing driving the markets up, a lot of naysayers, all right. You don’t want to miss the opportunity again, all right?
A lot of people missed out buying into those arguments. We’re saying you get a second opportunity for the second half of the cycle to do it again. And it’s going to be focused in Australia this time, but it doesn’t last forever.
That’s what the cycle teaches, it’s a cycle of boom and bust.
‘At some point — we think we know that point — the world economy is going to go down. And that phase, which is likely to be from 2026, 2027, to 2031, is going to be very, very difficult for the world economy.’
There are reasons for that, but it’s going to be very hard to make money from the asset markets. That’s why I keep emphasising you have to do it now.
James Woodburn:
And that’s it for today’s show. There’s a compelling opportunity on the table for you today. And Cycles, Trends & Forecast is designed to help you take it.
So hit the link below this video, you’ll be taken to a secure order form where you’ll be able to become a Cycles, Trends & Forecast subscriber.
Now, on behalf of Callum and Catherine, I can guarantee you a very warm welcome. Thank you for your time and goodbye.
Cheers,
 |
James Woodburn,
Publisher, Fat Tail Investment Research
