Investing Blunders ?

[eddie]

A cheer for the NEVER SELL Brigade

For those who WA.

I brought a block in Dunsbrough in 1971 for $1,170.00. Sold it for $10K later and thought id made a fortune. used the money to buy a car ( save on interest you see) and put the rest back into a block in Vasse which did nothing.

Could have brought a block in eagle bay for $2K and a block in Yallingup for $2.5k


1999 I brought a duplex in Leeming (Perth) for $103. sold it 5 years later to build on a block in northern suburbs for $123k. 2 years after selling it was for sale $250k.

2004 Because I refused to up my offer by 5k for a block in front of us which would have given us 180 degree views to the hills, We now have a house in front and no views.

When will I learn?

 

[aef]

I bumped this thread because of what I perceive as a classic investment blunder, this time by the federal government.

Hi Bill,

Can you elaborate on the investment blunder you describe above?

Thanks in advance,
A

 

[GIDDO]

RJ, reading this thread ia actually giving me a push, not to just sit on my hands but to get on with it!

Thanks, yes I was aware, anyway at least one more divi b4 i offload

Greg

Oh THANK YOU Grego, I forgot I had another Blunder with Telstra.
Having missed out on T1, I fell for the govt's 2 card trick, and bought telstra 2!

Suppose I should be glad i sold them at $4.80 about 3 years ago. Still it is a loss of some 35% over a 3 year period (not counting d ends)

I have never had a property perform that badly!

 

[Bill.L]

Hi all,

aef,

Can you elaborate on the investment blunder you describe above?

Where would you like to start?? I feel the whole telstra saga has been a blunder.
When they first sold it, they gave it away, oversubscribed but only gave away a small part. So we had all the financial information available for a listed company, but the largest owner making all sorts of rules hindering it.
The T2 float was probably at a good price for the govt, but they sold lots of it to the people who voted for them. That is just plain dumb.
As they achieved a good price, even though everyone knew that the rapid changes in technology would soon make many of the companies infrastructure assets almost obsolete (the most profitable ones), then the losers would be those who bought.

Fast forward to today. The share price has declined over 50% from the T2 sale and market concensus is that the dividend is the only thing holding the share price up. The management of the company seem to be at war with the largest owner, and the govt is letting them get away with it!!

Instead of either getting Telstra out of the regulatory field, or getting rid of the ownership, the govt is having a bit each way.
Only now that the price is at record lows, are they starting to think seriously about what to do with it. The current thinking seems to be that $3.50 is too low a price to sell, just like $5.25 was too low a price to sell a year or so ago.

If they really believe the current price is just a give away, and the company is worth far more, then they should make a takeover bid to buy all the outstanding shares, and then break up the company like any smart entrepreneur.

My belief is that it is not underpriced at present, and the most likely future is for all the profitable bits of Telstra to continue to be attacked by competitors and changes in technology.

sorry about the long post

bye

 

[aef]

Bill,

Thanks for the clarification.

I had my 'investing is buying' hat on and completely ignored the exit or selling strategy component of investing.

Your post illustrates that a smart planned exit strategy is one of the best tools an investor can use to maximise the return on their investment.

Regards
A

 

[littlevixen]

hmm...haven't made any PI blunders yet, but then I've yet to buy something Having missed out on the latest property boom due to still being a uni student at that time with just enough income to pay for text books, student fees and living expenses, I guess I'll have to buy and hold for the next boom !!

 

[wish-ga]

Any other share/property/whatever investing bloopers to share?

Not errors so much as personal deficits... I grew older and am inched forward:

* Taking so long to cotton-on that dutifully and respectfully listening to others was preventing me from moving on what I believed

* Wanting to sort out personal life first.... 'on hold' attitude could've had an overhaul earlier... meh! I am human.

* Being too inexperienced to realise that the high prices of the time would only get higher, sadly pooled resources+ not always on the cards

(+resources: knowledge, courage, ca$hflow, cheer squad)

 

[The Y-man]

..... investing in about 4 managed funds (which cost about 2% MER) + the wrap account taking and 1.5% and paying comissions to the fin planner i've gotten about 12% compounding over 5 years when the markets return 20%+ in the past 3 years...

Wouldn't complain about getting 12% compounding How many properties in Sydney over the last 3 years gave you that sort of return on capital?

Cheers,

The Y-man

 

[Chris.R_WA]

PI blooper: Only one so far (not a bad strike rate considering it is my only IP!!). In the booming WA market late 2005, tried to make an offer very attractive to vendor before first home open (4hrs on the market). Had my price accepted 12K under asking, which surprised me, on the condition that I could settle within 14 days. "No worries" I said... 14 days over Christmas/NY is not many working days though, couldn't get the finance in time to settle and paid a couple thousand penalty interest. Kicked myself at the time for not being professional enough, but laughing now as bank valued at +39% 3 weeks ago So I guess the market kind of fudged over my mistake - I still learnt the lesson though.

Share blooper: After coming up trumps in a resource co. IPO (sold within a week for 50% gain), I thought this was easy and would make a killing. Put 10K into the next one and have watched it slide to 2.5K on the back of zero DD

So nothing major in the scheme of things...just life lessons I suppose.

Cheers, Chris

 

[sailor]

The Good, the Bad, & the Ugly...then the Very Ugly!

I'm starting off with the Bad...cos I learned a lot...much later in life. Then I got Good. Now aiming for Gooder.

The Bad:
Bought my 1st PPOR in 1983 for $20K on P&I loan. Sold it when I moved interstate in 1987 for $85K.
Bought my 2nd PPOR in 1989 (another P&I loan), spend too much blood, sweat, tears and money renovating it, and sold it in 1991 for what I paid for it.
Wish I'd kept both of them as IO IP's!

The Ugly:
Went halves in a PPOR with TBIWSUW ("the bloke I was shacked up with") at the time. We had a joint loan and 7 years later he said it would be "wise" to each have a loan. So we refinanced separately. He cheated on me, so I left. Then I found out he'd started cheating on me, shortly before his wise suggestion. Instead of getting a valuer to estimate the value of the property, TBIWSUW got his RE-mate to value it. I ended up with a mortgage to fund.
Wish I'd found he was cheating on me earlier AND got a proper valuation.

The Really Ugly:
Took TBIWSUW's advice and bought the 2 commercial units, where I ran my business. Bought them 10 years ago on P&I loan (against my PPOR), and they have still not appreciated.
Wish I'd never met TBIWSUW! His financial advice SUX!

Good:
Started learning from scratch about IP's and bought my 1st & 2nd in 2003; 3rd in 2004, 4th in 2005, & 5th in 2006.
Cousin put me on the right track 2 month's ago...educated me on LVR, LOE, IO loans, etc. I was thick to start off with...but finally got going.

Gooder:
Now looking at sorting out the loan mess (EVERYTHING is cross collateralised with the bank), with the help of a really good broker. Meanwhile reading this forum from start to finish, and trolling the web and the streets for my next IO IP!
And the lessons I've learned? Happy with that!

Sharon

 

[lowb]

hi

I was thinking about bad cases... actually the worst cases in property investing...

Do you know anyone or have heard of anyone...

1. Who have gone bankrupt with massive negative equity -after buying at a peak

2. Do you think there is a chance that you could go through the worst case -do you have extensive exit strategies

And also...

3. Are there cases where money just dissapears -like, someone runs away with your deposit if you are buying or... something similar!

From a very inexperienced fellow, cheers

 

[The Y-man]

3. Are there cases where money just dissapears -like, someone runs away with your deposit if you are buying or... something similar!

Yes!

Take a look at my interview
http://www.somersoft.com/forums/showthread.php?t=27374

Cheers,

The Y-man