Aus macro
Building approvals not so bad. Highly volatile series, dollar value holding up.
If there’s one thing the NGDP folks have convinced me of, it’s the dollar income that matters for keeping things ticking over.
Same with housing finance (which are related series, the money goes into existing and new homes). Values are not far off their peak.
The banks and the builders have share prices that have already corrected, despite the volume of loans, or the backlog of homes.
That reduces the odds that your exposures, if you have them, are both overearning and capitalising those earnings into perpetuity in the multiple. Doesn’t mean it’ll work, or outperform, particularly if housing really rolls from here, but just lessens the odds of buying a pup.
We own ANZ and WBC, at the cheaper end, and ABC, within the builders.
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