crisis=opportunity

[kum yin lau]

Hi, appears to me opportunities are opening up already.

Stock market show some serious value.

Some resi markets show reasonable yield.

Commercial market starting to reflect D&G - where I'm at, it hasn't gone back to the high yields I saw in 03/04 but business has slowed perceptibly while rents had shot up in many instances. If prices go down 30%, we'll be back with the 9-10% yields.

Experience says wait.

How long will the cat and mouse game last?

KY

 

[GIDDO]

Hi Kum,

As an indicator, I am just keeping an eye on Somersoft.
As soon as the "glass half empty" somersofters begin to buy, I will be lining up to do the same.
I am not too worried about missing out at the moment.

Joe Bloggs has lost his confidence at the moment I think. (Temporary FHB confidence excepted) More gloom on the way.

I am busy now just lining up my borrowing capacity and adjusting LVRs.

Get into more debt before inflationary times begin. That is my aim.

 

[stumunro]

Anyone that tries to tell you how long this slump will last is kidding themselves...

Personally I don't think the share market has seen the worst of it, and obviously this will reflect in comm property too...

As for resi property...what's certain is that there is definitely demand in the lower end.. is it a dead cat bounce? My feeling is short term increase and then back to little or no growth until sentiment returns. I think it's a step in the right direction, and we have the benefit that the rba hasn't played all it's cards..

I know in terms of business, you can have a quick deep downturn. But the recovery takes x times as long. If i have a negative turn over in a month to the tune of 50k, it takes 3 really good months to recover. That's a general rule i've learnt, and that is only in small business.

 

[kum yin lau]

Thanks for the views. Good input.

Who are the glass half emptys? By that definition, I might be half full. I've started to nibble.
KY

 

[Dunger]

The American sharemarkets are showing plenty of value at the moment.

GM, Citigroup... All the big 'blue chips' are cheap as chips!

Stocks fell across the board but the banking sector posted some of the steepest losses with Citigroup's shares trading briefly under $1 dollar.

Once the world's biggest bank by market value, its shares dipped to 97 US cents for the first time as investors lost confidence in the company which has written off more than $US37.5 billion, Bloomberg reported.

''If you look at our banks they are stronger than the off-shore ones, but we still get the rub off,'' said Mr Growns.

 

[csc]

todays good buys maybe tomorrows dogs!

the old rule: if in doubt, stay out!

as for the sharemarket: way easier to sell into a rising market than one sliding or going sideways....of course there are always opportunities here with daytrading but right now the market is very uncertain and for anyone who doesnt watch the market continually ie: day trade it you will lose money.

only if you are buying for a 5 year hold you may do ok long term but then again there is nothing to stop a blue chip holding from tanking and losing liquidity and folding.....

rule of thumb trading: if your not prepared to lose 100% of your investment, do not trade one dollar of your hard earn't money.........after all the stockmarket is gambling.

i have a dozen different holdings on my ticker ready to buy but the market is showing no signs to me of any positive upturn safe enough for me to buy.

check historical volumes, there is no momentum currently for most.

good luck if you think otherwise.......

 

[steveadl]

Lisa: Look on the bright side, Dad. Did you know that the Chinese use the same word for 'crisis' as they do for 'opportunity'?
Homer: Yes! Crisi-tunity!

Sorry, couldn't resist

I've bought into a few blue chips for the long term. Yes they could go lower - in fact they have - but long term now is a good opportunity to buy. Not to say you can't wait a bit longer though, I agree with csc's thoughts.

 

[nonrecourse]

We still have a way to go yet before the bottom is reached. The share market bottom is at least 8 months away and the bottom of the property market will be July 2010.

Don't expect that bottom to lift for many years. In the intervening years before recovery we will see first deflation, then collapse of most fiat currencies. It will be then that properties real value will be demonstrated. You will see a devaluation of the $aussie dollar and your mortgage debt will be in devalued currency.

For the short term you just want to ensure if it gets really bad you can continue to carry your properties if bad luck strikes and they are empty or the tenants are not paying because of job losses and the tribunal will not allow you to evict them you need to have a reserve.

Getting your gearing down to 30% ensures that when deflation hits your equity is better than most.

 

[steveadl]

Some good thoughts NR. I'm not experienced enough to comment, but think you could be on the money with the stock market.

Follow up question you could perhaps clarify for me. Assuming of course you're in a position to cover unforseen problems etc with cashflow as you mention - why is it you feel the LVR on property should be 30%? When deflation hits, wouldn't it be better to have more debt which gets relatively devalued? Or have I missed something blatently obvious?

 

[willair]

Hi, appears to me opportunities are opening up already.

Stock market show some serious value.

If prices go down 30%, we'll be back with the 9-10% yields.


KY

Kum yin lau,I would be in no hurry to put any money on the table just yet the appearance of what is still to happen OS and here is still a big unknown,there is a very big difference between predicting and guessing btw most banks top end miners are down over 50% from the previous high's and are above 10% with franking credits,as of this morning i'm not buying anything till the ASXgoes into the 2500-2800 range and if the "dow"is hammered again tonight then we will see those levels very quickly..imho..willair..

 

[topcropper]

When deflation hits, wouldn't it be better to have more debt which gets relatively devalued? Or have I missed something blatently obvious?

Inflation will erode away debts. Deflation is terrible regarding debt. The real amount of debt increases with deflation.

See ya's.

 

[steveadl]

Inflation will erode away debts. Deflation is terrible regarding debt. The real amount of debt increases with deflation.

See ya's.

Ah yes, of course! Sorry, had a feeling I was being an idiot!

 

[Aaron Sice]

an LVR of 30% - how awesome - i'm sure that very achieveable for everyone, especially before July 2010.

time to get your head outta the clouds NR - anyone that bought in the last 10 years STILL wouldn't be approaching 60% LVR unless the investement had an unbelieveable yield.

sunshine, lollipops and rainbows.

 

[Witzl]

oh my god.... its a GHOST car!!

 

[PrimeCommercial]

So what's everyone's buy in price for
CBA...<$25?? <$24??
WBC...<$15???
BHP....<$24??
RIO...No idea?
WOW...<$24?

Holding for 5y+ or maybe even in SMSF

And would you touch QAN or PBG?

 

[triton07]

so What's Everyone's Buy In Price For
Cba...<$25?? <$24??
Wbc...<$15???
Bhp....<$24??
Rio...no Idea?
Wow...<$24?

Holding For 5y+ Or Maybe Even In Smsf

And Would You Touch Qan Or Pbg?

Bhp $21
Rio $41

 

[csc]

if your looking at the market put quality oil stocks on your ticker...when we bottom out they will be one sector to look at for long term growth.

i am still quite positive about the mining industry..sure it has slid, jobs are being cut but in reality its business as usual for the majors, volumes for export are down but long term they will be fine im quite sure. the long term trend is quite buoyant i feel.

now though is not the time to buy...fence sitting is the preferred choice.

good luck.

 

[Sunfish]

So what's everyone's buy in price for
CBA...<$25?? <$24??...... It's a bank. Wouldn't touch, at least till p/e <5

WBC...<$15??? ...... see above

BHP....<$24?? ...... I will buy eventually based on market/chart action/sentiment, not price. It could be sub $20... I don't know.

RIO...No idea? ..... Not till they get their balance sheet in order. Albanese is not working for small share holders IMHO.


WOW...<$24? ...... A p/e of 17.5 is too high with current sentiment.

Holding for 5y+ or maybe even in SMSF

And would you touch QAN or PBG? ..... No

 

[nonrecourse]

an LVR of 30% - how awesome - i'm sure that very achieveable for everyone, especially before July 2010.

time to get your head outta the clouds NR - anyone that bought in the last 10 years STILL wouldn't be approaching 60% LVR unless the investement had an unbelieveable yield.

sunshine, lollipops and rainbows.

I'm afraid blue card your reference period of 10 years is the period when historians looking back at this soft depression will identify the mindset of borrowing huge amounts and looking at unrealistic capital growth targets with absence of regulation as the raison d'etre GFC

Your pot of gold at the end of the rainbow when you reach the horrizon will be a financial abyss if your gearing isn't manageable. Continuing to gear up is fiscal Seppuku

http://en.wikipedia.org/wiki/Seppuku

 

[willair]

So what's everyone's buy in price for
CBA...<$25?? <$24??
WBC...<$15???
BHP....<$24??
RIO...No idea?
WOW...<$24?

Holding for 5y+ or maybe even in SMSF

And would you touch QAN or PBG?

Just take 20% off all the above and you may see value then but i still think all of the above will drop over 20% over the next six months,i'm no D-G but Governments are very good at telling you what they did,but not what they did not do,imho..willair..