i think the floor is here.
- Thread starter Aaron Sice
- Start date
This is the sought of misinformation which prevents retail investors from making informed decisions.
Firstly those shares were trading further below intrinsic value because of FEAR of refinancing issues. By doing the capital raising, this REMOVED the fear and resulted in the share price going up.
Recent capital raisings i have participated in and which are now showing profit include:
AXA at $2.85 now $3.69 (this one is yet to be completed)
Commonwealth Bank at $26 now $36
Crown Casino at $4.95 now $6
Westpac Bank at $16 now $20.4
Wesfarmers at $13.5 now $19.34
The wesfarmers one was particularly attractive, because share holders could also try to acquire additional discounted shares from those shareholders who didnt elect to participate in the capital raising.
I had some agents around last week to get a valuation on my PPOR (Baulkham Hills).
They said things are rushing out the door now. People in the area are upgrading into my category ($650).
In Lalor Park, Seven Hills area I'm surprised at the amount of houses for sale that are owned by investors. The thinking seems to be, if I get a good price I'll sell. And if they are tidy with a decent kitchen the FHB are snapping them up. Ones that need reno's are not moving as well.
I am getting rid of one of my non-performers....just signed the agency agreement yesterday. It is a 2 brm unit in Punchbowl......
I am in the camp that thinks that this is not sustainable....it does not make sense as unemployment is a lagging indicator and this has not hit yet.
I am waiting on the sidelines...no rush to buy yet.
Also once the banks tighten credit further it will slow things down further...
I am in the camp that thinks that this is not sustainable....it does not make sense as unemployment is a lagging indicator and this has not hit yet.
I am waiting on the sidelines...no rush to buy yet.
Also once the banks tighten credit further it will slow things down further...
I too got into CBA and BSL and am up on CBA but down on BSL, but that's besides the point. While you may show a profit now the capital raising has still diluted your existing shares so you could only speculate on how much they would have gone up or down without the CR. Not to mention that it was done at a time when prices were at their lowest in years so you didn't get top value for your dilution plus having to do a raising in this environment don't inspire a lot of confidence in the management. Then there is the prospect of those who bought in the CR taking a quick profit and further impeding the sp return to previous highs.
And did I mention the lack of accountability in the management ?
Lets say your rental PM decides that he is entitled to double the fees he is charging you at the moment. He send you and all his other clients a non-binding ballot paper so you can vote on the issue. Then despite his increase in fees being rejected by you and his other clients it is approved by his office colleagues so you have to pay him the extra fees or alternatively you can chose to sell your properties to avoid the increase.
There is no way your PM could get away with it yet the executives looking after your shares have been doing exactly this for years ( and are now paid millions in remuneration for attending a few meetings a year) and getting away with it. Just another reason why property is a safer alternative to shares.
Going back to the property analogy, the CR is akin to your street neighbors deciding to join all the blocks on the street and subdivide them. You can chose to join in and pay your share of the costs but if you elect not to do so you still lose a 2 meters wide strip from your property. How attractive or fair is this to you as a landowner if for whatever reason you elected or were not able to participate in the subdivision but lost a 100 m2 from your land anyway?
Now I'm not saying that investing in shares doesn't have its place but until the laws change so that share holders get a fair deal,there is prompt market disclosure, the management held responsible for any dodgy dealing with harsher jail penalties for breaches and the practice of short trading is either stopped or disclosed to the market at the time of transaction investing in property is a much safer option. They are both investments but the difference between them is alike going home by jumping on the (shareholder) back seat of a public bus going in the general direction of your home and hope you are on the right bus, the driver is not drunk, etc. OR jumping in the (property) driver's seat of your own bus and driving yourself home. In both cases you traveled by bus but only in the property seat you are in control of your destination.
What floor?
Government has just organized a deal with the bnks for those who get into mortgage stress. Then there is the 14K grant and stamp duty exemptions. Next thing you know it Kevin Rudd will be paying the difference for those who fixed their rates at the high rates 8 months ago.
.
C'mon sometimes we just need to let things take their course. Whilst I don't see a property correction in the near future I fear that one day when there is no stimulus or cash thrown away by government that things will collapse. I am not anti property and I am currently looking to buy however sometimes I just wish that the government will stop bailing everyone out who has mis managed their financial position.
Government has just organized a deal with the bnks for those who get into mortgage stress. Then there is the 14K grant and stamp duty exemptions. Next thing you know it Kevin Rudd will be paying the difference for those who fixed their rates at the high rates 8 months ago.
.
C'mon sometimes we just need to let things take their course. Whilst I don't see a property correction in the near future I fear that one day when there is no stimulus or cash thrown away by government that things will collapse. I am not anti property and I am currently looking to buy however sometimes I just wish that the government will stop bailing everyone out who has mis managed their financial position.
Harvey Norman loans
I agree, isn't that whole thing of putting your mortgage payments on hold a bit Harvey Norman-esque? Buy now, pay later? What about the interest and the bank charges that will be added to the loan, doesn't that mean that theoretically your next job (provided you find one within 12 months) has to be a higher income job than the one you lost, because your loan will have increased in size?
I agree, isn't that whole thing of putting your mortgage payments on hold a bit Harvey Norman-esque? Buy now, pay later? What about the interest and the bank charges that will be added to the loan, doesn't that mean that theoretically your next job (provided you find one within 12 months) has to be a higher income job than the one you lost, because your loan will have increased in size?
That's some deal, the interest is still accumulating so instead of paying your mortgage in 15 years you take a year off and now it takes 20-25 years to pay it off and a hundred thousands or more extra in interest. Still, the government looks like is doing something for the people and the banks look more caring about their customers. As for the $14K and the stamp duty let's be fair here, its about time the government is doing something for the home buyers. The renters have been getting assistance from the government through Centrelink as well as through the negative gearing paid to landlords for decades. How many tenants could really afford to pay the rent at true market value ?
And is not like that at the end of the day the government will be out of pocket, by the time you add up all the hidden taxes they are still in front. Then there are the $$$$ the government stands to save every year whenever a renter becomes a home owner and the $$$$ saved in unemployment benefits by creating extra jobs in the building and RE industry from which they can take even more taxes.
should get you to have a chat to some of my tenants... you'd think I was taking the bread from their kid's lunchboxes the way some of them go on
If you take a look at the oil price http://www.oil-price.net/ over the 1 year period, it shows that it has stabalised.
It's normally a reasonable indicator of the world economy
It's normally a reasonable indicator of the world economy
i'm bullish on oil.
Teeny weeny exaggeration here I suspect!
According to this report by the Australian Property Center, now is the ideal time to buy.
http://www.australianpropertycentre.com/ViewReport.asp?bah72uw15vlqib6ij76i
It reads more like a sales pitch so I don't take it too seriously. Does have some interesting points such as housing shortage, immigration, rising rents and the inability of market to go much lower.
Personally I'd be happy to buy now and will definitely be buying in July. May not be the best time but is still a very good time.
http://www.australianpropertycentre.com/ViewReport.asp?bah72uw15vlqib6ij76i
It reads more like a sales pitch so I don't take it too seriously. Does have some interesting points such as housing shortage, immigration, rising rents and the inability of market to go much lower.
Personally I'd be happy to buy now and will definitely be buying in July. May not be the best time but is still a very good time.
OK you caught me, it was an exaggeration but not by much and only because interest rates have fallen so much in the past year.
But even these low rates there could be something like $40K in interest rates added to a $500K loan over a year and which by the time was paid off in 20 years would attract another $40K in interest.
Terry Ryder came out on Today Tonight and said something along these lines as well. Apparently prices should at least double by 2020. Don't seem to find a link to the video clip but here is an article on it,
http://au.todaytonight.yahoo.com/article/5481349/money/value-home-2020
CNN Money today has an article on an oil town.
BRADFORD, Pa. (CNNMoney.com) -- Six months ago this oil town in Western Pennsylvania was booming. You couldn't find a worker to paint a house, let alone man a drill rig. The nearby oil fields buzzed with activity as high prices drove a production frenzy.
Now this boomtown's bustle is as quiet as the surrounding late-winter forest.
If the Yanks are cutting production in the lower 48 either there has been massive demand destruction or there will be a big spike in price soon.
BRADFORD, Pa. (CNNMoney.com) -- Six months ago this oil town in Western Pennsylvania was booming. You couldn't find a worker to paint a house, let alone man a drill rig. The nearby oil fields buzzed with activity as high prices drove a production frenzy.
Now this boomtown's bustle is as quiet as the surrounding late-winter forest.
If the Yanks are cutting production in the lower 48 either there has been massive demand destruction or there will be a big spike in price soon.
Similar threads
