Share Market Crash will bring up or down on housing Market

[alexlee]

I am saying it stablises and 10-15% is still possible if you buy wise. My majority is in property. I want to keep few for my kids when they grow up. I do not want to sell all of them. If you have $200k cash + 70% margin lending in shares, you should have enough money to play I believe.

Analyst, you're asking people to read about the 29 crash. If anything like that happens, do you honestly thing ANYTHING will return 10-15% (other than gold)? You expect a 1929-level crash and you think having a 70% margin lend is a good idea?

What you're talking about (sell one property, keep 70% margin lend) is just called paring back a bit of risk. I agree with you, but it certainly ISN'T the strategy I would be using if I expect a 1929-style crash.
Alex

 

[TheAnalyst]

Analyser, I would still like to hear your reasoning behind your ANZ example specifically as it doesn't make sense. An impending market crash is'nt a reason that it's over valued. It may take a hit like every other listed stock might if there is a crash - herd mentality - but that doesn't mean at a current yield of 5% it's overvalued?

Sorry Steve. My reason is the shares are overbought. That is why we are not buying on value but "HOPE, hope for future."

I quote "The astrologist Evangeline Adams (US most famous fortune teller), when asked for her opinion of the stock-market on 3 Sep 1929, replied " The Dow Jones could climb to heaven". And so it seemed to thousands, as the stock market broke the new records. No one could have known that 3 Sep would mark the high point of the 1920s bull market. Then she instructed her broker to sell all her shares immediately..."


Stock- market fever in 1920s ---- are we siminar like that. I think so.

"The rick man's chauffeur drove with his ears laid back to catch the news of an impending move in Bethlehemn Steel; he held fifty shares himself on a twenty point margin. The window-cleaner at the broker's office paused to watch the ticker, for he was thinking of converting hi ... savings into a few shares of Simmons...."

 

[alexlee]

Sorry Steve. My reason is the shares are overbought. That is why we are not buying on value but "HOPE, hope for future."

But why? Has ANZ's PE ratio suddenly jumped to unreasonable levels? ANZ is making honest-to-goodness MONEY, and paying honest to goodness CASH dividends. On what basis are you saying that the shares are overbought? Suddenly increased PEs? If ANZ is earning more money than it used to, why shouldn't its shareprice be higher?

Also on that, if you think the current market is anything like 1929, why aren't you selling everything you have and buying gold? I would have thought that would be the best strategy if you expect a 1929-style crash. Just selling one IP (out of the presumably many that you have) isn't much of a pare back.
Alex

 

[steveadl]

Sorry Steve. My reason is the shares are overbought. That is why we are not buying on value but "HOPE, hope for future."

I quote "The astrologist Evangeline Adams (US most famous fortune teller), when asked for her opinion of the stock-market on 3 Sep 1929, replied " The Dow Jones could climb to heaven". And so it seemed to thousands, as the stock market broke the new records. No one could have known that 3 Sep would mark the high point of the 1920s bull market. Then she instructed her broker to sell all her shares immediately..."


Stock- market fever in 1920s ---- are we siminar like that. I think so.

"The rick man's chauffeur drove with his ears laid back to catch the news of an impending move in Bethlehemn Steel; he held fifty shares himself on a twenty point margin. The window-cleaner at the broker's office paused to watch the ticker, for he was thinking of converting hi ... savings into a few shares of Simmons...."

Fair enough, and I think you're right - this is the case in some stocks.

I do believe ANZ is a poor example to use though, at it's current yield of 5% and growth prospects. I would'nt consider this over valued at all, regardless of how much it's risen in the last couple of years. Now if financial markets crashed worldwide, interest rates tumbled and banks stopped making money - then maybe ANZ would be overvalued at current price, but that's purely hypothetical, and quite unlikely.

PS For me personally, ANZ would'nt carry much risk at all in my mind at these prices.

 

[Simon]

I am selling one of the IPs to get money to wait for the crash. Honesty!

What are you planning to buy?

You sound very confident. That is good up to the point where you become close minded to new ideas. But with your confidence you must be shorting the market?? That would really be a winning close to your argument? Can you short the indices or just particular stocks? I have never done it myself - guess I am too much of an optimist. Has worked so far - mostly...

How will you know when the crash has come and when it is over?

Did we have the crash the other day? The papers said we did. As did my barber. He knows a little about everything.

Now that you are selling IPs to wait for the crash, where are you investing in the meantime? Term deposit? Online account? Offset account against a PPOR? The latter is possibly the best return.

Cheers,

 

[WillG]

Perhaps a 'stockmarket crash' will become a Self-fulfilling prophecy

 

[TheAnalyst]

Fair enough, and I think you're right - this is the case in some stocks.

I do believe ANZ is a poor example to use though, at it's current yield of 5% and growth prospects. I would'nt consider this over valued at all, regardless of how much it's risen in the last couple of years. Now if financial markets crashed worldwide, interest rates tumbled and banks stopped making money - then maybe ANZ would be overvalued at current price, but that's purely hypothetical, and quite unlikely.

PS For me personally, ANZ would'nt carry much risk at all in my mind at these prices.

Steve, I agree. ANZ compared with others might be less crashable.

 

[TheAnalyst]

What are you planning to buy?

You sound very confident. That is good up to the point where you become close minded to new ideas. But with your confidence you must be shorting the market?? That would really be a winning close to your argument? Can you short the indices or just particular stocks? I have never done it myself - guess I am too much of an optimist. Has worked so far - mostly...

How will you know when the crash has come and when it is over?

Did we have the crash the other day? The papers said we did. As did my barber. He knows a little about everything.

Now that you are selling IPs to wait for the crash, where are you investing in the meantime? Term deposit? Online account? Offset account against a PPOR? The latter is possibly the best return.

Cheers,

Hi, Somon

Never play index thing before. I am studying it now. We will see over never 1-2 months to see what is happening there.

 

[Simon]

Hi, Somon

Never play index thing before. I am studying it now. We will see over never 1-2 months to see what is happening there.

It is Simon - not Somon, guess you were thinking of the wisdom of king solomon, we are easily confused.

What about my other questions? Got anything to add to them?

 

[TheAnalyst]

It is Simon - not Somon, guess you were thinking of the wisdom of king solomon, we are easily confused.

What about my other questions? Got anything to add to them?

Hi, Simon, I do not know you are scarstic(sorry I forgot the spelling) or ask me a real question. Anyway, I anwser.

1 - How will you know when the crash has come and when it is over?

I think the bear has just started. Maybe the ords down to 5000 or less. By that time, I might be buying...

2 - Did we have the crash the other day? The papers said we did. As did my barber.

He knows a little about everything. 2-3% is not a crash. In 1987, 15% DOWN IN one day, that is crash. I am not a barber. I am a highly trained Engineer.

3 - Now that you are selling IPs to wait for the crash, where are you investing in the meantime? Term deposit? Online account? Offset account against a PPOR? The latter is possibly the best

I have about $2m loan (all variable) with offset ability. I have about $800k cash sitting there against my PROR. Guess what I am thinking of selling it because I want to make some moeny in the BEAR market.

 

[Simon]

Hi, Simon, I do not know you are scarstic(sorry I forgot the spelling) or ask me a real question. Anyway, I anwser.

1 - How will you know when the crash has come and when it is over?

I think the bear has just started. Maybe the ords down to 5000 or less. By that time, I might be buying...

2 - Did we have the crash the other day? The papers said we did. As did my barber.

He knows a little about everything. 2-3% is not a crash. In 1987, 15% DOWN IN one day, that is crash. I am not a barber. I am a highly trained Engineer.

3 - Now that you are selling IPs to wait for the crash, where are you investing in the meantime? Term deposit? Online account? Offset account against a PPOR? The latter is possibly the best

I have about $2m loan (all variable) with offset ability. I have about $800k cash sitting there against my PROR. Guess what I am thinking of selling it because I want to make some moeny in the BEAR market.

No need to go into details on your figures mate. $800K to you is probably as important as $80K to another bloke. It is the strategies and ideas that count.

So what do you reckon you would be buying after the crash and assuming a long bear market?

Industrials? Banks and supermarkets? Or would you be considering mining giants to benefit from the continual growth in China? That has got to be a long term story. I was in Shanghai amongst other places and there is a big difference between those industral cities and the rest of the country. Not done by a long shot there.

You are an Engineer? Into figures I guess and attention to detail. Often my engineer clients have trouble making decisions because they get bogged down in the detail (same with teachers funnily enough ).

Good luck to you mate.

 

[gigigoodyear]

why aug 15?

"August 15 is the last day of the 45-day notice period required for investors to withdraw money from many hedge funds across the world during the current quarter.

"For the July-September quarter, July 1 to August 15 is the application period to withdraw serious money from a hedge fund. So, post-August 15 will probably see people queueing up for redemptions in hedge funds," Dawnay Day AV Securities Director Seshadri Bharathan said.

If this happens, it might lead to a 'cascading liquidity withdrawal' syndrome across emerging markets, including India."

http://www.hindu.com/thehindu/holnus/006200708121222.htm

 

[TheAnalyst]

So far I am right.

 

[alexlee]

So far I am right.

And not a few months ago when you were confident about the Perth market?

Even a broken clock is right twice a day. All you've said is 'I think the market is overvalued and it's going to crash'. Why? How? By how much? For how long? Get THOSE right and I'll put you on an altar. Is it in fact crashing? How do you define it?

I also ask again: if you think we're in for a long downward trend, why haven't you sold EVERYTHING you have? Or shorted stocks? You would have made some nice amount by now if you'd shorted the ASX200 when you first put up this thread?
Alex

 

[Dean1337]

Analyst, when you talking about "value" in a stock, are talking about perceived "value" rather than say a fundamental "value"? If this is the case then I can understand your argument otherwise I'm still confused.

 

[Land]

Thanks

Alexlee,

Just want to say that I particularly enjoy your contribution to the forums. You always post very balanced and informative comments and have a considerable depth of knowledge that I myself and I'm sure others have found enlightening.

It is great to have someone who is very articulate regarding investment issues and also has the tenancity to pursue an issue when you feel a point of view needs to be challenged for the good of all.

I think you put your money where your mouth is, so what you say has serious weight.

Thanks mate!!

 

[McBrain]

Alexlee,

Just want to say that I particularly enjoy your contribution to the forums. You always post very balanced and informative comments and have a considerable depth of knowledge that I myself and I'm sure others have found enlightening.

Well said.

 

[Dean1337]

Alexlee,
Just want to say that I particularly enjoy your contribution to the forums. You always post very balanced and informative comments and have a considerable depth of knowledge that I myself and I'm sure others have found enlightening.

Well said Land and I would also like to thank you alex.

 

[Dis]

Even a broken clock is right twice a day

Someone's seen Fracture

Ditto the appreciation of your contributions.

 

[TheAnalyst]

And not a few months ago when you were confident about the Perth market?

Even a broken clock is right twice a day. All you've said is 'I think the market is overvalued and it's going to crash'. Why? How? By how much? For how long? Get THOSE right and I'll put you on an altar. Is it in fact crashing? How do you define it?

I also ask again: if you think we're in for a long downward trend, why haven't you sold EVERYTHING you have? Or shorted stocks? You would have made some nice amount by now if you'd shorted the ASX200 when you first put up this thread?
Alex

Alex, I REMEMBER I HAPPEN TO READ THAT QUOTE ON ONE OF THESE CRAHS BOOKS REGARDING CLOCK RIGHT TWICE A DAY. I FOUND IT BIT HUMORUS AND A BIT INSAULTING. FIRST I AM NOT A BROKEN CLOCK; SECOND, MY CONCLUSION IS BASED ON MY STUDY; RE YOUR QUESTION, I DO NOT LIKE THE DETAILS AND ONLY PUT DOT POINTS.

AGAIN IT IS ONLY MY OPINION, PEOPLE CAN CHOOSE TO IGNORE BASED ON THEIR OWN JUDGEMENT. I ONLY VIEW MINE WHICH I AM SEEING IT IS HAPPENING.

TODAY, I HERAD ON ABC AN EXPERT SAID SHARES ARE OVERBOUGHT AND IT SHOUD HAVE NEVER BEEN THAT HIGH. Regarding the Reserves poured billions of money into the water, the guy said vey funny: one side economy is going robust, on the other side, the money need to liquidate the market.... Just I have quoted the famous US fortune teller.