Friday, September 18, 2026
1987 Crash Part 2: what happened, why was it much worse in Australia, and what is similar today?
For the US stock market, the October 1987 crash featured its largest ever one-day fall, but it turned out to be a relatively minor hiccup. The US market started rebounding the next day and recovered its pre-crash high in less than two years. But in Australia the crash was much deeper (-50%) and took more than eight years to recover. Although most of the problems and trigger events were in the US, I provide ten reasons why the Australian crash was much worse than the US. The current US tech boom has several similar underlying conditions as in 1987 - over-pricing, speculative fever, inflation, mounting government deficits & debts, trade & current account deficits, falling US dollar, trade/currency wars. However the trigger for the correction is different in every crash, and may be years away. Meanwhile it pays to be vigilant.&
‘Price/Earnings’ ratios are meaningless – Exhibit A: the 1987 crash
The 1987 crash was a prime example of how the most widely used measure of pricing for shares and share markets – the ‘price/earnings’ ratio - can give investors a false sense of security, and fail to warn of massive levels of hidden over-pricing. At the top of the market before the 1987 crash the Australian share market had a lower (cheaper) p/e ratio than the US, but our crash turned out to be much sharper & deeper, and took 5 times as long to recover. The low p/e ratios for companies, and for the whole market, masked enormous underlying problems because much of the reported 'profits' were due to accounting trickery, fudged valuations, related-party deals, circular transactions, and straight-out fraud. It is the same in every boom - and we are seeing increasing evidence of this in the current ai/ data centre / private credit boom.
My latest webinar for IFPA– share markets, inflation, rate cuts, private credit, housing, Ai & more
Topics covered in this episode include: share markets, inflation, interest rates, wages growth, housing, private credit, plus audience questions on ‘ai’, productivity, Bitcoin, and housing. (On Private Credit – note that this was recorded before the recent collapses in the US, and before Jamie Dimon’s famous ‘cockroaches’ warning on private credit funds. I have been warning of looming problems for the past couple of years).
Six things I learned about age/dementia care costs, and how they have shaped my own plans
This is a follow-up to my main story ‘10 things I learned about dementia & dementia care homes from close range’. That first story covered various aspects my experiences dealing with my mother’s dementia and dementia facilities in Sydney over the past three years. Today’s story is about the costs, how they were very different to what I expected, and how some of the lessons have shaped my own plans.
10 things I learned about dementia & dementia care homes from close range
This is a brief summary of some aspects my experiences dealing with my mother’s dementia and dementia facilities in Sydney over the past three years. Every case is different of course, so these are just my random anecdotal comments that may be of interest to others facing the prospect of parent(s) or family member(s) with, or developing, dementia. Topics I cover include - the pace and pattern of cognitive decline, the decision to ‘go in’, different types of facilities we went through, what its like inside, lessons in preparation, costs, and more.
3/4-time score check on returns for asset classes & diversified portfolios in 2025. So far so good!
Despite Trump’s tariffs, rising political unrest across the world, wars, mounting deficits and debts everywhere, the ‘cost of living’ crisis, and endless tiresome predictions of imminent recessions and/or crashes, 2025 is shaping up to be one of the better years for diversified investors – for returns, and also for the consistency of positive returns across asset classes. Similar to 2004, 2005, 2006, 2012, 2016, 2017, 2019, and 2023, when just about everything was positive. Typical ‘70/30’ diversified portfolio are heading for another great year of double-digit returns. This is one of my go-to charts to help illustrate the value of diversification and patience, rather than piling into last year’s winners, and/or trying to chase the latest hot themes / stocks / funds / fads.
Aussie house prices on the rise again, but rents are yet to catch up
House prices have been rising again since March 2025 with the RBA interest rate cuts, and prices are now set to accelerate with the new first home buyer lending rules. Since Covid, house prices have soared, but rents have risen by only half as much, so gross rental yields for landlords have halved while interest rates have risen. Given continued strong immigration and slow new construction activity, there will be enormous pressure (and scope) for landlords to raise rents further. Tenants will have to cope with rising rents, plus the nightmare seeing price rises take the dream of home ownership further out of reach. Why I have recently renewed my interest in housing markets.
September 2025 snapshot: Shares keep rising as ‘ai’ goes full bubble
Global share markets post a 6th straight month of gains despite Trump's ongoing frenzy of tariffs, deals, backflips, side-deals, and yet another US debt ceiling / government shut-down crisis. Wrap-up of US, global, and Aussie share markets - what were the winners, losers, and why? The US Fed's 4th rate cut confirmed its shift to jobs and stability, not inflation. Why the RBA is not rushing to cut rates here. Plus I cover currencies, commodities, interest rates, inflation, and more.
“Ashley is one of the best writers and thinkers on financial markets in Australia. His unique analysis and research is always fact-based and insightful, not the usual uninformed market noise and waffle that infects the mainstream financial media.”
Graham Hand - Editorial Director of Morningstar Australia, including Founder/Managing Editor of FirstLinks, Australia’s leading newsletter and publishing service on wealth management, superannuation, and personal finance.
“Ashley has the rare ability to ground insightful analysis in solid data and to present it in readily understandable ways. His wry, detached style and focus on the long term is rare and willingness to share a lifetime of learning and thinking appreciated by all who come to know him.”
Toby Potter - Chair, Institute of Managed Account Professionals (‘IMAP’), the peak industry body for the discretionary managed accounts industry in Australia, representing investment managers, advisers, Managed Account providers, and technology companies. It is the primary thought-leader for the industry in Australia, and provides training and industry events and conferences.
“Over the past 20 years, Ashley has been an invaluable assistance to me, as a reliable source of unbelievably strong and interesting data, and many good investment ideas.”
"The depth and quality of Ashley’s research and analysis of investment markets is the best in the business.”
Dr Don Stammer - Australia’s most respected economic writer, commentator, and speaker for the past 40 years, with a distinguished career including the Reserve Bank of Australia, Chief Economist at Deutsche Bank Australia for 21 years, chair of nine ASX companies, plus numerous non-listed and not-for-profit boards.
“Ashley’s unique fact-based analyses and insights into Australian and global markets are always worth reading. He has an incredibly deep and comprehensive store of financial markets data.”
Chris Cuffe, AO – One of Australia’s best known and most experienced investment managers – former CEO of industry giants Colonial First State, then Challenger Financial; founder and Chair of Australian Philanthropic Services, and Third Link Growth Fund; current/former chair, director and/or investment committee member of numerous funds including UniSuper, Argo Investments, Hearts and Minds Investments, Paul Ramsay Foundation, and many others.
“What sets Ashley Owen’s analysis apart from investment banks and the financial press is his deep fact-based understanding of long-term financial data, rather than getting caught up on the daily noise over issues that may generate trades or sell newspapers today, but will be irrelevant and misleading two years from now.”
Hugh Dive, CFA. Chief Investment Officer, Atlas Funds Management, and frequent expert commentator quoted in the AFR.
‘For many years, Ashley has been my go-to source of information and analysis on what’s going on in financial markets and why.’
“Ashley has an encyclopaedic knowledge of the markets – I call him Mr Google!”
Noel Whittaker, AM – Australia’s best-known personal finance writer, columnist, and media commentator for the past three decades. He has written more than 20 books on personal finance, his regular columns on personal finance are published in almost every major Australian newspaper, and he appears regularly on radio and TV as an expert on finance and investing.
"I read all of Ashley's research on financial and economic issues. His data resources, deep knowledge, and original analysis put him in a class of his own."
Ian Macfarlane AC - Former Governor, Reserve Bank of Australia (Australia's central bank), 1996-2006. Former Director, Woolworths, Leighton Holdings, and ANZ Bank. Also on the International Advisory Boards of Goldman Sachs (2007-2016), the China Banking Regulatory Commission (2011-2014), and director of the Lowy Institute for International Policy (2004-2017).