It was easy to tell that you knew your stuff during some of those debates on LOE a while back. The only comment I can make here is that I thought you were a lot older than you actually are. It must of been your posts that sounded 'mature' (as in experienced from previous market performance).
I notice that you say IP in the not too distant future, myself, I am seeing property move in inner Melb, starting to in Syd, and constant growth in Brissy at present.
What are your thoughts on this current IP behaviour?? My take is that it may be a boom that no-one expects. But then again, doesn't that mark all booms?
Hi Bill,
I deliberately made the paragragh on the IP wealth creation bit v. short, not only everyone here is familiar with it & should be doing it, but also because I don't really consider myself an IP expert. I'm sure the majority here are more knowledgable than me regarding IP - I rarely respond to posts re IP. Regarding IP, I practice the 80/20 rule - 20% effort gets 80% of the results - the rising tide. I put 20% effort into shares & achieve similar results. The other 60% is spread between structure (LOE, asset allocation,etc), risk management and timing. My school reports invariably said, 'must try harder', 'could do well if he applied himself', etc
I spent a while away from SS, but the reason for my return was that the ASX had doubled in a short period (time to rebalance?) with increased volatility (investors getting worried?), rents were increasing rapidly, interest rates rising - is IP nirvana approaching ?????. And the most reliable place to find out if IP was good value again is of course SS.
As a 'value oriented market timer', I like the threads about yields & reasons for growth. Good yields means good value and that means less risk - Buffet would call it margin of safety.
And for a long time, I've looked at London/NY prices & compared with Syd etc and asked WHY? See
Germany, Japan, China better value than Oz thread. Historically, ASX has always traded at a discount to the world, now it's on a par. Maybe IP will follow ? I think it's mostly a sentiment thing - and that's v. hard to predict. But if you're not in the game you ain't gunna win it.
As you say, Adelaide, Bris & Inner Melb are growing. However, that isn't one of the things I place highly on my list of investing criteria - not directly anyway.
The 4 criteria I use when investing -
- compare asset to other asset class (shares or IP)
- compare asset to it's previous yield/earnings
- compare asset to forecast earnings (this is more relevant to shares)
- compare asset to similar assets in other countries (this is more relevant to shares)
The way I see it.....
- Shares are still better value IMO. But that is beoming a closer call.
- Yields are creeping back up.
- Low vacancies everywhere - rents will rise more.
- Oz IP is still fairly expensive - but that doesn't really matter to much.
Risk is usually pretty low when a couple of these things coincide. And after that happens.... growth often occurs, even if it doesn't it's probably not costing anything to just hold & wait. Of course, growth does occur at other times, but (because I'm lazy?) it's hard for predict.
So the bottom line is 'I don't know', but I'm keeping a much closer eye one things ATM - And I
REALLY LIKE the threads on yields & reasons for potential growth in suburbs - hint hint.
Cheers Keith