The Australian Version of the $20 Billion Dollar Chart

John Paulson made $20 BN by betting against the US Sub Prime market mortgage market in 2007 & 2008. His portfolio manager Paolo Pellegrini convinced Paulson to make the bet based on a key chart. Here is what it would have looked like if we did the chart (via Calculated Blog):

Here is the background on the chart from Gregory Zuckerman from the Wall Street Journal who wrote the book, the Greatest Trade Ever.


Mr. Pellegrini spent hours in Mr. Paulson's office, debating how to deduce a turn in the housing market. Mr. Paulson charged Mr. Pellegrini with figuring out ...

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The Rental Yield & Rental Share of Income

The two most important metrics while measuring the value of a property are the rental yield & the rental share of income in an area. Here are examples of both these metrics across three key neighborhoods in Manhattan, New York

The rental yield is the most important metric in calculating the valuation of a property. Think of the rent as the profit of a business. The value of the house is how much you are paying to get the cash flow. This is similar to the P/E ratio of the business. The higher the rental yield, the better an investment ...

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Indian Real Estate Investing: The Manhattan Delusion

In 1999, you could get an apartment in Malabar Hill Mumbai for approximately, Rs 30,000/square feet. Now, a similar apartment is about Rs 75,000/square feet. A 2.5x return in 15 years looks interesting if you can’t do compound interest math. But, if you can, the return turns out to be about 6.5%/year which is similar to what people would get from a fixed deposit rate.

How is it that people still continue to believe in the magical qualities of real estate investing when the past historical returns have been anything but extra-ordinary ...

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