I suggest the 'logic police' should move house!

[yieldmatters]

I have had an absolute blast debating the issues with people on this forum. People on the whole are pretty accomodating and interested to chat. But at the same time I've also go on people's nerves and I can understand why.

This section of the forum is clearly for people who aren't questioning the benefits of property as an asset category. They already believe in it and want to discuss issues at a lower level. For example (and I lifted this from the description) ... advice and strategy discussions, negotiating techniques etc. For example if there was a forum about the love of snowboarding and it was constantly bombarded with facts (albeit logical 'facts') as to why snowboarding sucks it would tend to irratate people right?

But at the same time I think some opposing views on the future of this asset category is useful. Especially for potential new entrants who might be sucked in by the 'hype' - they need all sides of the story. There are some clear problems of logic at a macroeconomic level that people can't explain and it indicates some real problems moving forward. For example,

* How can house prices always outstrip wages?
* How can house prices always outstrip rent?
* Why should house prices ever rise in real terms (> CPI) ?
* What is the limit to household debt?
* How can you always sell an economic loss making asset for a higher price to a future buyer?

So I'll start a thread in the "Property Market Economics" section called "Logic Police" and we will try to keep it to these big macroeconomic problems.

I can't control the other 'bears' out there but I'll be confining my big picture questions mainly to this area of the forum in the future. Hopefully some pro-property people will turn up and deliver some good answers - otherwise it will be boring!

 

[DavidMc]

All of this has been discussed many many times. Try using the search function. Look for threads with 'HiredGoon' in them.

12.75 posts per day? Far out...

 

[BoatBoy]

And then there was MBL as well

Dave

 

[yieldmatters]

All of this has been discussed many many times.

It probably has been discussed for sure but I would argue nobody has solved it though. There are enormous problems of logic in the "house prices rise forever" argument - if you or anybody else can answer them then come over to the "Property Market Economic" thread. I'd love to hear the answer.

 

[HiredGoon]

Foundation had a hilarious reductio ad absurdum list of bullet points on GHPC about what would happen if this was true, I'll try and find it later today (got work to do!)

 

[BayView]

Foundation had a hilarious reductio ad absurdum list of bullet points on GHPC about what would happen if this was true, I'll try and find it later today (got work to do!)

Please don't

 

[Trogdor]

YM and HG - may I ask what you both in terms of line of work/career?

I'd be interested to know, in terms of thinking about how this affects your analysis of various investment asset classes.

 

[Twitch]

YM and HG - may I ask what you both in terms of line of work/career?

I'd be interested to know, in terms of thinking about how this affects your analysis of various investment asset classes.

I'd guess highly educated, at least Bachelors degrees probably masters, well above average IQ, age ~25-30, well paid jobs. If some humility was part of the equation then I'd imagine it would be a recipe for financial success.

 

[HiredGoon]

Yep, mid 20s, computer programmer. Worked overseas in games industry (fun but low pay long hours), now financial software (not as "cool", but 1.5x the pay for shorter hours)

There's a very good chance that your money runs through software that I have source control access to

 

[alexlee]

Yes, a common problem. When you think you're smarter than other people, there's a tendency to stop learning.
Alex

 

[Trogdor]

I'd guess highly educated, at least Bachelors degrees probably masters, well above average IQ, age ~25-30, well paid jobs. If some humility was part of the equation then I'd imagine it would be a recipe for financial success.

I think you may be correct - but Im asking out of genuine curiousity - and I dont think that they lack humility at all.

I'd class myself into the description you put above - and I think to be honest this is a detriment to investing as it leads on to over analyse everything and need to be able to justify all decisions in a quantitative fashion. People who are less educated / have lower IQs (to a point) just "do it" and often come out on top.

I bought a place inner melb when I was 21 (almost 6 years ago) - thinking it was too expensive - top of boom - people could never earn more - blah blah blah - but justified it to myself by saying it was a nice townhouse, I could live there if need be, it would save tax, and it had gone up so much there was a risk it could go up more (i watched the last few years of the 1997 - 2002 melb boom but as I bought when I was 21 couldnt get a deposit together earlier). At the time, however, I kind of "knew" it wasnt a good idea - but just did it cause I had the cash.

Fast forwards to now - inner melb has been booming - what I paid was a song - and Im not only very thankful I did - but bought again - and will keep doing so.

No amount of analysis would have got me there - just doing it, and watching 2 booms and an interviening period when everybody said crash crash crash and what happened was just no to slow growth (no crash) was invaluable in teaching me a lot of lessons.

Time is a very valuable teacher

Similiar lessons/experiences in shares/LPTs, along similiar concepts, but thats another story for another board

 

[piNoob]

Yep, mid 20s, computer programmer. Worked overseas in games industry (fun but low pay long hours), now financial software (not as "cool", but 1.5x the pay for shorter hours)

There's a very good chance that your money runs through software that I have source control access to

hey, I'm software developer too, working on financial program, but always dreaming to move into games programing, probably never will

 

[Trogdor]

Yep, mid 20s, computer programmer. Worked overseas in games industry (fun but low pay long hours), now financial software (not as "cool", but 1.5x the pay for shorter hours)

There's a very good chance that your money runs through software that I have source control access to

Cool - which country did you work o/s?

Lots of high paying IT jobs in Banking in London if you are in the right area.

 

[DavidMc]

It probably has been discussed for sure but I would argue nobody has solved it though. There are enormous problems of logic in the "house prices rise forever" argument - if you or anybody else can answer them then come over to the "Property Market Economic" thread. I'd love to hear the answer.

No thank you. I've reads reams of interesting discussion and have satisfied myself enough that I will continue on my chosen investing path. It's up to you to satisfy yourself. All of the information is already here and we've given you the search terms.

Why don't you hunt down the best answers to your questions and then ask some *new* questions? Now that would be doing something different. Do you realise how many others like you have joined our forum in the last 3 months and have done exactly what you are doing now? It's very unoriginal and became boring a long time ago.

Or, if you like, you could continue to sit on this forum all day hitting 'new posts' every 15 minutes riding the merry go around of arguments.

 

[letiha]

Quick somebody delete these posts in case my 17 year old brother see's them, I keep telling him that no real people have jobs as games programers.

 

[yieldmatters]

No thank you. I've reads reams of interesting discussion and have satisfied myself enough that I will continue on my chosen investing path.

I'm not interested in changing your investing path. You will of course do what you think is best - that's fine.

Regarding the bordem - If talking about the hard questions is boring for you and you've seen it all before then look at another thread - no problems.

 

[jingo]

Hi Trogdor - Great post. I also bought into inner Melbourne in 2001. In hindsight this was a great time to buy. Interest rates were about to go up and the market stalled in anticipation. A lot of commentators at the time were saying 'this is the end, housing cannot go any higher blah blah blah'. Well what has happened? The place has doubled in value, and I have been able to invest in shares and other IP's along the way.

So for all of the newbies out there, don't be afraid by the likes of Yield, HG and I've forgotten the other one (MBL), they are all talk and noise. Buy when you can afford to buy, factor in the down side (interest rate rises, slow rental market, and holding costs), and simply wait. Over time prices will rise again.

Regards Jason.

 

[yieldmatters]

YM and HG - may I ask what you both in terms of line of work/career?

I'd be interested to know, in terms of thinking about how this affects your analysis of various investment asset classes.

Masters (Economics) - Capital Investment Analyst for a multinational. And YES - I was much happier and more successful with speculative investments before I became educated. I think you have an excellent point.

(just in case this is misinterpreted I genuinely agree - no sarcasm intended - thinking about stuff too much is a killer and not always the best move)

 

[piNoob]

Quick somebody delete these posts in case my 17 year old brother see's them, I keep telling him that no real people have jobs as games programers.

why??

 

[HiredGoon]

Cool - which country did you work o/s?

Vancouver, Canada. Games industry is good fun and hard work, and it's kind of cool to know you worked on games that 10s of millions of people have played but salary/work conditions are based on supply and demand and there's an infinite amount of supply of young men willing to work their *** off in the games industry for peanuts.

If your 17 y.o. brother is really interested in it, choose either art and make a portfolio or code and get a CS degree and study up on 3d maths.

Lots of high paying IT jobs in Banking in London if you are in the right area.

Yes, at the moment we are trying to decide whether to work in the UK for a few years and come back and buy a house outright with cash or have kids.

Financially there is no contest vs the future wife taking ~7 years off to raise them but we don't need to go chasing money, we can afford a decent life on 1 income if we rent rather than buy and we could always take the kids overseas and do it then, I went OS with my parents when I was a kid and it was great and it can gives you an unmatched opportunity to learn different languages when your brain is never more malleable for it.