Last week I found myself sitting on a bench outside my local supermarket sipping on a morning coffee. Next to me sat a blind man named Myles with his guide dog Franky. Soon after we greeted each other Myles told me he had studied and lectured economics for most of his life and was a self-confessed financial tragic who loved the numbers and statistics. I was intrigued, and being like-minded I prodded further to see what he could tell me.
As soon as Myles heard I was into property, out of the blue he launched into this - “I have friends who swear by investing in blue chip shares he said. Banks, big miners, big infrastructure companies”. Recently Myles told me he had looked at some blue chip examples to fulfill his fetish for numbers and the details were fresh in his mind. He noted that BHP, a brilliant company no doubt, had a share price in June 2007 of $35.38.
Then fast forward to June 2020, that is now, their share price sits at $35.99, meaning there has been no capital growth in 13 years and if inflation was taken into account BHP’s share price growth has been negative. He then mentioned National Australia Bank, no doubt one of Australia’s best banks and one of the world’s best banks. In February 1997 NAB’s share price was $15.42.
In mid May 2020 more than 23 years later the NAB share price closed at $15.46 for a 0% capital growth over more than 2 decades and negative growth with inflation. Quite taken aback at this fact Myles then ventured on to tell me that as for property during the same time prices had gone ballistic. For example he mentioned Melbourne. In 1997, Melbourne had an average property price of $133,000 that has boomed to well over $800,000 in 2020 representing a more than 600% increase in value. Our conversation continued and I was grateful for his time and insightfulness but it was the last line that left me in a spot where I wasn’t sure to laugh or be a touch embarrassed.
After talking over and over about how clear the facts are about property and it’s absolute dominance when it comes to being the best possible investment bar none Myles tilted his head towards me and whispered “Even a blind man is able to clearly see that the best and simplest way to make money over the long term is to buy property”. I waited for a moment and then at exactly the same both Myles and I burst out laughing, a giggle that seemed to last an eternity. Thanks for the chat Myles, you are a very wise and smart man.