Taken from the www.jenman.com.au website
"One of the Australia's most respected investment advisers, Noel
Whittaker, this week used the investment story about the box of
strawberries when he urged investors to take care in today's property
market.
"Never forget the story about the box of strawberries that was sold
over and over again at increasingly higher prices. Eventually the last
buyer opened the box to find the strawberries were rotten. When he
complained he was told "these strawberries are meant to be sold, not
to be eaten." "
I guess the comparison here is that one of these days someone is going
to buy a property who doesnt WANT to sell but to use it to generate
income. After struggling to find a tenant and then getting only net 1%
return he goes back to complain to the RE agent who will tell him
properties are meant to be sold, not to be used to generate income.
Date: Thu, 10 Jul 2003 08:46:52 +1000
edward von stroom wrote:
> Taken from the www.jenman.com.au website
>
> "One of the Australia's most respected investment advisers, Noel
> Whittaker, this week used the investment story about the box of
> strawberries when he urged investors to take care in today's property
> market.
>
> "Never forget the story about the box of strawberries that was sold
> over and over again at increasingly higher prices. Eventually the last
> buyer opened the box to find the strawberries were rotten. When he
> complained he was told "these strawberries are meant to be sold, not
> to be eaten." "
>
> I guess the comparison here is that one of these days someone is going
> to buy a property who doesnt WANT to sell but to use it to generate
> income. After struggling to find a tenant and then getting only net 1%
> return he goes back to complain to the RE agent who will tell him
> properties are meant to be sold, not to be used to generate income.
Not only for the property buyers, this is also true of banks that come
late to the party:
"Embattled Abbey National PLC said its much vaunted recovery plan was on
track, though it revealed the profit it makes on loans had fallen since
the end of the last financial year and warned it was likely to drop even
further as competition for new mortgages intensified.
...
Abbey said it had been hit by an aggressive move into the new mortgage
market and loss of established home loans. As a result gross and net
lending grew by around 40 pct and 60 pct respectively in the four months
under review -- which on the face of it would appear to be good news.
But in early years, banks make no cash on what are often heavily
discounted mortgages and only start return a profit later in the term of
the loan.
And with so many customers swapping banks and building societies to get
the best deal, pressure has been further intensified.
'I think we believe interest rate margins will come down further, but
how far and how fast is in significant part a function of the market',
said Abbey chief operating officer Stephen Hester".
(http://investor.stockpoint.com/leftnav/NewsDisp.asp?Symbol=ls:anl&slider=8&Vendor8=2&FileName8=20030618/AEF5327.xml&StoryID8=7421809)
"Suncorp cuts home loan fees
Suncorp home loan customers are set to benefit as the financial
conglomerate today announced it would welcome in the new financial year
by slashing its loan establishment and security administration fees for
new home loans to zero"
(http://corporate.suncorp.com.au/news/news0210.asp)
The 3rd tier of the "bunch of strawberries" phenomenon will occur
when/if players like NAB bid for Abbey.
...with so many customers swapping banks and building societies to get the
best deal...
Banks perhaps reduce their churn losses with consideration - reward, for
those who stay with them, rather than those who chop and change; Such once
called loyalty rewards, however loyalty is just another traded commodity
these days.
Todays message to everyone is that to be loyal is to be a mug....
"B J Foster" <bjfoster@no-spam> wrote in message
news:3F0C9B5C.10801@no-spam
>
>
> edward von stroom wrote:
> > Taken from the www.jenman.com.au website
> >
> > "One of the Australia's most respected investment advisers, Noel
> > Whittaker, this week used the investment story about the box of
> > strawberries when he urged investors to take care in today's property
> > market.
> >
> > "Never forget the story about the box of strawberries that was sold
> > over and over again at increasingly higher prices. Eventually the last
> > buyer opened the box to find the strawberries were rotten. When he
> > complained he was told "these strawberries are meant to be sold, not
> > to be eaten." "
> >
> > I guess the comparison here is that one of these days someone is going
> > to buy a property who doesnt WANT to sell but to use it to generate
> > income. After struggling to find a tenant and then getting only net 1%
> > return he goes back to complain to the RE agent who will tell him
> > properties are meant to be sold, not to be used to generate income.
>
>
> Not only for the property buyers, this is also true of banks that come
> late to the party:
>
>
> "Embattled Abbey National PLC said its much vaunted recovery plan was on
> track, though it revealed the profit it makes on loans had fallen since
> the end of the last financial year and warned it was likely to drop even
> further as competition for new mortgages intensified.
> ...
> Abbey said it had been hit by an aggressive move into the new mortgage
> market and loss of established home loans. As a result gross and net
> lending grew by around 40 pct and 60 pct respectively in the four months
> under review -- which on the face of it would appear to be good news.
>
> But in early years, banks make no cash on what are often heavily
> discounted mortgages and only start return a profit later in the term of
> the loan.
>
> And with so many customers swapping banks and building societies to get
> the best deal, pressure has been further intensified.
>
> 'I think we believe interest rate margins will come down further, but
> how far and how fast is in significant part a function of the market',
> said Abbey chief operating officer Stephen Hester".
>
(http://investor.stockpoint.com/leftnav/NewsDisp.asp?Symbol=ls:anl&slider=8&
Vendor8=2&FileName8=20030618/AEF5327.xml&StoryID8=7421809)
>
>
> "Suncorp cuts home loan fees
>
> Suncorp home loan customers are set to benefit as the financial
> conglomerate today announced it would welcome in the new financial year
> by slashing its loan establishment and security administration fees for
> new home loans to zero"
> (http://corporate.suncorp.com.au/news/news0210.asp)
>
>
> The 3rd tier of the "bunch of strawberries" phenomenon will occur
> when/if players like NAB bid for Abbey.
>