The author has been described by News Ltd as an "iconoclast", "Svengali", a pollie's "economist muse", and "pungently accurate". Fairfax says he is a "Renaissance man" and "one of Australia’s most respected analysts." Stephen Koukoulas concludes that he is "85% right", and "would make a great Opposition leader." Terry McCrann claims the author thinks "‘nuance’ is a trendy village in the south of France", but can be "scintillating" when he thinks "clearly". The ACTU reckons he’s "an enigma wrapped in a Bloomberg terminal, wrapped in some apparently well-honed abs."
Tuesday, July 3, 2012
Great Mark Bouris column on saving smarter...
Why are bonds safer than shares? Think about it this way. When you buy a home, you might get a loan for 80 per cent and fund the rest with your deposit. The loan is the same as a bond while your deposit is equity (or like shares).
If you default, the bank gets to foreclose and recover its loan by selling your home before you get anything back. If your home falls in value, your deposit (or ''equity'') may be worth nothing. When you invest in a bank bond, you are lending money to the bank. In contrast, investing in bank shares leaves you with all the downside risk. There are smarter solutions out there for you. Start by becoming informed, and always get advice before you act.