Since the release of the 7th round of property cooling measures, do you notice the media’s pessimistic view on the near future of the property market?
The fact is: Most people do not have the ability to judge what have just been thrown at them. They look around for others, for people who seem to have the authority or the experience, to tell them what is really going on.
Those media interviews with people from the industry help to fill the gaps.
How far can these gloomy reports draw cash-rich Singaporeans back to the stock market?
I am reading the book of Blanche Evans Bubbles, booms, and busts: make money in any real estate market. The author believes that the US media’s constant report on a housing bubble burst as early as 2004 is a deliberate effort to make up for their missing of the tech bubble.
After missing the tech and telecom bubbles, the generals of the financial media are now battling more bubbles than we can count …There are bubbles in debt, credit, and interest rates. There is the oil bubble, the import bubble, the China bubble, and the current account deficit bubble. In short, we have a veritable bubble in bubbles.
The author even thinks that it is a conspiracy of the industry analysts to convert investors from real estate to stocks.
With so many company lies and financial frauds, especially news on greedy CEOs receiving astronomical paychecks despite disappointing results, shareholders gradually lost confidence in the equity market and turn to real estate.
Wall Street analysts were trying to influence the media to drag investors back to the stock market by casting a negative view of the property market.
Of course, whether this has anything to do with the final collapse of the US housing market and the subprime crisis in 2008 is another matter altogether.
The question is: How powerful can the media influence our perception on what is really happening or going to happen in the market?
Before the announcement of the latest cooling measures, almost every other day we see an article in the local paper about how hot the property market is.
“Buyers crowded the xxx showflat over the weekend”
“Developers said almost 100% sold in a week”
“Property price in xxx have reached new high”
“Prices expect to climb another x% in the coming quarters”
“Investors turn to the xxx market for higher profits”
Reports with quotes from a few ‘industry experts’ can easily drive home a positive or negative view on the current market. Journalists can actively find individuals with similar views or re-write the quotes in a way that support the tone of their articles.
Anyway, readers seldom question the truth behind the articles. Few will examine the source and take it with a pinch of salt.
And there are more stories about how people make easy money or get-rich-quick from properties. No one cares that it is talking about an exception rather than a norm. Afterall, it is only human nature to look for something exciting, something out of the ordinary.
In his 2011 letter to shareholders, Warren Buffet reminded investors not to pay attention to the media.
The media has proved to be most inaccurate when predicting what is going to happen to the market.
Will our investment decisions be totally different if we have never read any media report, or haven’t listened to any journalist, but explain the market in our own logical sense?
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