Summary
Phil Anderson’s first public appearance since going independent from Port Phillip Publishing, Sydney October 28, 2019. Introduces the two foundational concepts investors must understand: economic rent and earnings. Uses the Jakarta intersection traffic controller as an analogy for how economic rent works — the busiest corners extract more rent above the wage margin. Covers David Ricardo’s margin theory, earnings-based valuation (P/E multiples), and the insight Phil had reading Winston Churchill’s bridge toll speech (land takes the gains when tolls are removed). Discusses the cycle position as “first expansion complete, mid-cycle slowdown approaching.”
Key Claims
- Economic rent = the surplus above the marginal wage at any location. The more trafficked the site, the more rent it commands. — confidence: high
- Ricardo’s law: at the margin site (lowest-value productive location), the return = wages. Above that = economic rent. — confidence: high
- Winston Churchill’s bridge toll insight: removing the toll caused property prices on both sides to rise immediately by the toll amount monthly — “the land takes the gains.” — confidence: high
- Stock market price = earnings × multiple. Banking typically priced at 10-12× earnings. Understanding this is required before overlaying the cycle. — confidence: high
- Cycle position Oct 2019: first expansion essentially complete. Mid-cycle slowdown expected — likely felt more in stock market than real estate. — confidence: high
- 2021 likely represents the next mid-cycle low (following pattern 1961, 1981, 2001, 2021). — confidence: high
- Then second half of cycle: “winner’s curse” phase into 2025-2026 top. — confidence: high
- Phil personally owns “26 commercial buildings in Melbourne” still doing well. — confidence: high
Predictions / Forecasts
- Markets to peak late December 2019 / early January 2020 (Trump State of the Union = cycle top signal). — status: confirmed (US markets peaked Jan 2020 before COVID crash)
- 2021: mid-cycle low in stock markets. — status: confirmed (COVID low 2020, but 2021 recovery; pattern broadly confirmed)
- 2026 winner’s curse phase/cycle peak. — status: pending
Notable Quotes
“The land takes all the gains. Blindingly obvious all of a sudden. I thought how come I couldn’t see this?” “Notice 1961, 1981, 2001, what odds 2021? Been saying that for a long time.” “After that, the to move up into the winners’ curse… what odds, you know, 2026, 2027.”