I can smell the fear

[Ms Jade]

We are not out of the woods yet so investing newbies shouldn't get too excited just yet. Put the Omni back in the ice bucket for now guys.

So THAT is why these guys have all this $ to keep purchasing & I don't. I'm drinking waaay the wrong type of bubbly - LOL.

Seriously, I do agree about the current premature excitement. Perhaps some of us got a bit over-stimulated.

 

[evand]

Just as it gets annoying to read the unending rose colored glasses, blue sky, blind optimism and were all going to be rich in 5 years stuff. Pretty much based on inexperience and hope. What else?

Extremism at both ends is equally annoying, no?

 

[Bill.L]

Hi all,

Evand,

The fact is tho, the money has to come from somewhere and the price will be paid a bit further down the track. It always is.

That 'fact' I believe is wrong.

'Money has to come from somewhere',
I think it comes from thin air. It is a concept of man that is 'created' by borrowing into existence or 'quantitatively eased' into existence.

The opposite of 'borrowed into existence' is 'repaid into nothingness'.

If I'm wrong, and money comes from somewhere else, I would sure like to know where.

bye

 

[willair]

Keep watching people. This is not over because of some monthly positive or negative stats, this is a long term thing. That is a major reason why I urge caution to those I talk to.

Good luck with your investments.

No matter what anyone tells you,short term there may still be problems
in several investment area's and with so many so-expert's out there
they all miss the simple fact "Property is Longterm"..
willair

 

[evand]

I'm no expert (especially on your existential philosophical post about where money comes from) but predomiantely taxpayers.

Hi all,

If I'm wrong, and money comes from somewhere else, I would sure like to know where.

bye

 

[DreamBig]

Both here and especially in the US, over the next 10yrs taxes to the general public will have to increase by a fair percentage to pay for all the stimulus.
Bush continued to cut taxes in the US to keep voters happy but in the process has got the country into an almighty mess. Before Bush came into power, Clinton had left the US with a budget surplus- now in trillions of dollars debt!

The unfortunate thing about democracies is that voters want everything, but aren't willing to give anything (taxes). Eventually the bubble has to burst and that time is now.

 

[GreatPig]

Therefore, we older folk with as few cycles and a few runs under the belt just laugh ... when you've seen that it (the market) just keeps plodding on, going in cycles and starts all over again.

From my time rockclimbing, I can tell you that it's the people with years of experience who become complacent that are most likely to kill themselves. Sometimes fear is your friend.

Of course irrational fear is paralysing, just as irrational exuberance is inviting disaster, but I think long term survival requires at least a "healthy respect" for the down side.

GP

 

[Francesco]

It's not the D&G that is the problem Asdellel.

Even I have predicted little or no growth this year and probably most of next.

The problem with the D&G is the degree of the predictions.

It is often extreme, and sprouted by people with seemingly no real experience.

Therefore, we older folk with as few cycles and a few runs under the belt just laugh, then get annoyed when they keep regurgitating the same old thing and eventually tell them to bugger off.

I gets annoying after a while hearing that extreme aspect of it when you've seen that it (the market) just keeps plodding on, going in cycles and starts all over again.

And, as has been said before a million times; it only applies when one HAS to sell.

The houses will all still be there next week.

Exactly why the real D&G is annoying with serial re-posting of their thesis based on Demographia, Prof Keen and assumptions of inevitability of following the circumstances of UK, US, Japan, etc into widespread decline of RE prices by up to 40% and of retracing historic price/income ratio of about 3. These postings pop up under suspicious circumstances of collaboration, where one user would retire and another new poster would confidently take up the 'crusade' but with similar rant. The gloom case has been pushed radically and often with arrogant certainty by the D&G crowd, such as 40% price decline and high unemployment and consequently, high price decline.

Many SS forumers have already recognised that some market moves are likely in the direction consistent with what D&G are espousing, but not to the extent nor the investment option or strategy that is possible in such environments.

So far, there is an actual decline of maybe 20%-30% in the higher end of RE, but offset perhaps by actual increases of about 10% in the lower end RE portfolio (of many SS IP investors), plus 1st qtr Oz GDP is still positive (not following UK, US, Japan, etc). So, is the cry of relief jubilation therapeutic and well deserved on SS?

 

[quoll]

It's not the D&G that is the problem Asdellel.

Even I have predicted little or no growth this year and probably most of next.

The problem with the D&G is the degree of the predictions.

It is often extreme, and sprouted by people with seemingly no real experience.

I don't really have a problem with the degree, I'd love to buy at 40% under the current market.

My issue is they never have a positive swing on what might happen. I'm still adament that there is opportunities in all climates you just need to change your strategy. Those that keep spouting the same old doom and gloom just seem to suggest we all stop investing while the world falls apart? And it's always everyone should do exactly the same thing.

My rant.

cheers
Graeme

 

[evand]

Hypothetically, what strategy would be a suitable one if property prices were trending downwards over a few years.

Considering current rental yields.

I'm still adament that there is opportunities in all climates you just need to change your strategy. Those that keep spouting the same old doom and gloom just seem to suggest we all stop investing while the world falls apart?

 

[wylie]

Hypothetically, what strategy would be a suitable one if property prices were trending downwards over a few years.

Considering current rental yields.

For me, the only strategy would be to hold on and keep banking the rent money until the prices started trending upwards again. This has happened a couple of times since we started investing 30 years ago and I am sure it will keep happening.

Unless we really were in financial difficult, I would be just hanging on tight because selling just crystallises a loss. We have sold twice, both times to fund our growing family, large renovation and rising living and school expenses, both times having made a good gain. In both cases, those houses are worth at least double what we sold them for, and I really wish we had been able to hold them, but "them's the breaks".

 

[Bill.L]

Hi all,

Evand,

I'm no expert (especially on your existential philosophical post about where money comes from) but predomiantely taxpayers.

Sorry, wrong answer, that is where one entity gets its money from another, not where the money came from. Seeing as you don't have a real answer, perhaps you could stop using your beliefs as 'facts'.

bye

 

[evand]

Sorry Bill, having a bad day mate?

I'm all ears if you'd like to go to the trouble to correct me.

Hi all,

Evand,

Sorry, wrong answer, that is where one entity gets its money from another, not where the money came from. Seeing as you don't have a real answer, perhaps you could stop using your beliefs as 'facts'.

bye

 

[evand]

I'm not sure thats consistent with quolls initial post. As follows:

"I'm still adamant that there is opportunities in all climates you just need to change your strategy."

For me, the only strategy would be to hold on and keep banking the rent money until the prices started trending upwards again. This has happened a couple of times since we started investing 30 years ago and I am sure it will keep happening.

 

[Bill.L]

Hi all,

Interesting..

Evand,

I'm all ears if you'd like to go to the trouble to correct me.

I already have corrected you, money is a creation of man, there is no limit on it. What you stated as fact was clearly wrong, it was only your belief.

bye

 

[wylie]

I'm not sure thats consistent with quolls initial post. As follows:

"I'm still adamant that there is opportunities in all climates you just need to change your strategy."

I was answering your question, not the initial post.

 

[BayView]

So THAT is why these guys have all this $ to keep purchasing & I don't. I'm drinking waaay the wrong type of bubbly - LOL.

Seriously, I do agree about the current premature excitement. Perhaps some of us got a bit over-stimulated.

<interest rates + >rental yields + <house prices = excitement squared.

 

[BayView]

Just as it gets annoying to read the unending rose colored glasses, blue sky, blind optimism and were all going to be rich in 5 years stuff. Pretty much based on inexperience and hope. What else?

Extremism at both ends is equally annoying, no?

The difference is that the blind optimism is a much better chance to get you to riches than the other direction when it is combined with inaction. Guaranteed failure, no matter what the state of the market.

I like to be super-optimistic, and add a large dose of commonsense to the process to factor in safety to balance the whole mindset.

The D&G mindset - well, that's just a slippery slide into a black hole regardless.

Whilst "the secret" type thinking won't achieve diddley without action, if you always adopt the "I can do it" mindset you will always win, ultimately.

The "I can" people will find ways around the hurdles of a poor market to achieve their goals, Ev.

 

[evand]

Yes, yes you've told me its only my belief 3 times.

Well, if that's the case why don't they have the presses running 24/7/365. Just print more of the stuff. If its only an abstract creation of man that wont hurt right?

Hi all,

Interesting..

Evand,



I already have corrected you, money is a creation of man, there is no limit on it. What you stated as fact was clearly wrong, it was only your belief.

bye

 

[evand]

That's not quite true Marc. The many posts i've read on here over the last couple years of people nearly going under and having to sell assets/houses to keep afloat etc and some people in a lot more trouble than that are mostly caused by over optimism and ignoring the reality of a situation(s).

In those cases they have pretty much translated their optimism with action and over extended themselves. In your case i don't think you have been active in the property market for quite a while. Just as i havn't.

If you were really optimistic, wouldn't you be buying up?

Also, don't confuse D&g with keeping your feet on the ground and sticking to reality. Its not the same thing.

In times like these its all about surviving and being bale to play another day with finances in tact. That's where the winners are.

This thing (GFC) hasnt fully played out yet.

The difference is that the blind optimism is a much better chance to get you to riches than the other direction with inaction combined with it.

I like to be super-optimistic, and add a large dose of commonsense to the process to factor in safety to balance the whole mindset.

The D&G mindset - well, that's just a slippery slide into a black hole regardless.

Whilst "the secret" type thinking won't achieve diddley without action, if you always adopt the "I can" do it mindset you will always win.

The "I can" people will find ways around the hurdles of a poor market to achieve their goals, Ev.