Share Market Crash will bring up or down on housing Market

[TheAnalyst]

The following is quoted from the Australian
"
RESERVE Bank governor Glenn Stevens says he doesn't regret raising interest rates despite this week's market crash.

"I don't have any reservations about last week's decision, but these financial events obviously bear close watching," he said.

"You can't really go back and remake decisions on the basis of information that wasn't available then."

Mr Stevens was giving testimony today before the house of representatives standing commiteee on economics, finance and public administration.

He said it had been a little difficult to read the trend in inflation in recent time.

"It has been a little bit difficult to read what the current trend in inflation is over recent quarters," he said.


"

He said - "You can't really go back and remake decisions on the basis of information that wasn't available then." As the Head of RBA, he does not know what happening in the financial market, such as subprime mortgages, hedge funds.... How can suddenly all the "basis of information" became available over a week?

"Australia economy is strong, unemployment is low, no debt (government), interests rate is high; Amercia may drop their rate, they have big **** problem with everything, economy, wars."... Suddenly, Ausie Dollar buy less Us Dallar.... Everthing seems out of logic, does not it?

 

[TheAnalyst]

So why not short the market until it goes below 5000, then start buying?
Alex

I have said in my previous posts ---- I am studying the short thing and I do not understand these. Importantly, I want to see it go below 5000, then I pick up bargins.

 

[Sunfish]

I have said in my previous posts ---- I am studying the short thing and I do not understand these.

This is a democratic forum and we are all entitled to our say, but seriously, if do you do not understand the market well enough that "shorts" are beyond you, should you really be arguing at such length with people who have been around for years?

I learnt long ago that you will not change people's minds so the best you can do is to state your case and step back. You leave it alone unless there is a clear misunderstanding you think you are able to address. I know more than most here about the mechanics of brokers and their accounts and the emotions experienced during the market's upheavals (years of experience) and like to post on these topics. I think I can help beginners, but compared to others I have only minimal experience of property investing so generally leave those threads alone.

You really should think more and post less. Make them count!

 

[TheAnalyst]

This is a democratic forum and we are all entitled to our say, but seriously, if do you do not understand the market well enough that "shorts" are beyond you, should you really be arguing at such length with people who have been around for years?

I learnt long ago that you will not change people's minds so the best you can do is to state your case and step back. You leave it alone unless there is a clear misunderstanding you think you are able to address. I know more than most here about the mechanics of brokers and their accounts and the emotions experienced during the market's upheavals (years of experience) and like to post on these topics. I think I can help beginners, but compared to others I have only minimal experience of property investing so generally leave those threads alone.

You really should think more and post less. Make them count!

I do not know what you talk about. I am saying I do not how to play short does not mean I do not know how to buy and sell shares.

You may have millions of years experience. However that experience may equal to 000000 because you are barking a wrong tree.

See - today it droped another 0.7% ---- So I assume it drops 2% a week, then it will not take long to drop below 5000 or 4000. Only those in trouble with their shares they would have the same view like yours.

 

[TheAnalyst]

This is a democratic forum and we are all entitled to our say,

I have never asked anyone not to say. All I said in the same thread I have answered the same question. If he/she had read it, it would not have asked.

 

[alexlee]

I do not know what you talk about. I am saying I do not how to play short does not mean I do not know how to buy and sell shares.

You may have millions of years experience. However that experience may equal to 000000 because you are barking a wrong tree.

See - today it droped another 0.7% ---- So I assume it drops 2% a week, then it will not take long to drop below 5000 or 4000. Only those in trouble with their shares they would have the same view like yours.

Yes, if it drops 0.7% today obviously it'll drop 2% a week. Now if this happens week in, week out it'll drop below 5000 or 4000 (which is only a difference of 20%).

You do realise, Analyst, that none of us are saying there's going to be another boom tomorrow.

Not knowing how to short, or not understanding the concept, doesn't mean you can't buy and sell shares. But not understanding the concept of shorting is a pretty big gap in the knowledge of someone who is predicting that the market is going to crash.
Alex

 

[alexlee]

Also I just noticed, SUNFISH playing the voice of reason?
Alex

 

[wylie]

Hi Sunfish. I have a question which you may be able to help me with.

The only shares we have are in our super, so I know next to nothing.

My 15 year old son today asked me whether he should put the $2000 he has saved from pocket money and part time work into shares?

I am not asking you for direct advice, just your thoughts. Is he better to sit it somewhere earning the best interest he can or buy shares now? We did explain that shares are for the long term and I imagine it would be a few years before he will need any money, so with shares being a bit volatile right now, is he best to steer clear?

Thanks, Wylie

 

[TheAnalyst]

I forgot to calcualte how long it takes Telstra share holders to get their capital back based on their 5% yield.

 

[s_t]

Hi Wylie, as with property, the thing with shares is that it is more important to actually do it, rather than put it off forever because of uncertainty. If he is wanting to buy shares, and sees it as a long term investment, I see no reason to not do so now.

Something to remember is that the news is always negative when the market is down (like now), and positive when it is up (say a couple of weeks ago). If we pretend we are back a couple of weeks ago (when the news was all good), would you have found it easier to recommend that he buy then? What would have been a better entry point?

They could go lower of course, but they might not. Remember that the news is rarely positive at the market bottom, and no bell rings to inform you when it gets there! Most of my net worth (which isn't huge ) has come from buying shares when the news was bad, and price down, and then holding onto them long term.

Hi Sunfish. I have a question which you may be able to help me with.

The only shares we have are in our super, so I know next to nothing.

My 15 year old son today asked me whether he should put the $2000 he has saved from pocket money and part time work into shares?

I am not asking you for direct advice, just your thoughts. Is he better to sit it somewhere earning the best interest he can or buy shares now? We did explain that shares are for the long term and I imagine it would be a few years before he will need any money, so with shares being a bit volatile right now, is he best to steer clear?

Thanks, Wylie

 

[HiredGoon]

My 15 year old son today asked me whether he should put the $2000 he has saved from pocket money and part time work into shares?

1. Put the money into an online saver account, where you can get 6.5% risk-free.

If it is sitting in a normal bank account it is actually losing money vs inflation so do that while you stop and thikn about things.

2. Decide whether he wants to be a trader, or an investor. Traders buy and sell to make money, ie they buy a share which may be overvalued and hope to sell it to someone else for even more money.

An investor calculates the value of a future income stream (future discounted, eg a 15 year old could probably have a lot more fun with 2k in today's money than a 60 year old) then purchases the best one.

Does he like any companies? Think about what he does as a part time job, what industries etc he knows about and is interested in. Think about which things he think will do well in the future.

But if he just want to buy "shares" and not bother with all of that then get an index fund.

 

[Sunfish]

I have never asked anyone not to say. All I said in the same thread I have answered the same question. If he/she had read it, it would not have asked.

Mate, You're a worry. It seems you scanned my post with fire in your eyes and didn't read it. When I referred to this being a democratic forum I was admitting your right, not claiming mine. There is a big difference in attitude.

Again I ask you to read more carefully, think a little more and post a little less. It matters nothing to me, refer Geldof's Great Song of Indifference but at my age noise and fuss are an unwelcome intrusion.

Peace!

 

[Sunfish]

Also I just noticed, SUNFISH playing the voice of reason?
Alex

What's this all about Alex? I've always been reasonable. Ask Mrs Fish. I'm the reason all the sh!t happens round here.

 

[topcropper]

Is he better to sit it somewhere earning the best interest he can or buy shares now? We did explain that shares are for the long term and I imagine it would be a few years before he will need any money, so with shares being a bit volatile right now, is he best to steer clear?

Thanks, Wylie

I'm not sunfish, but the worst thing to do would be earning interest.

Say your getting 6% interest? Big deal. You pay tax on the 6%. Inflation is 3% and rising. You are going no where.

A share earning 4% fully franked, hopefully is from a company, that on average has grown earnings at 7 to 10% per year. Lets say 7% capital growth. Add the dividend, Thats 11% per year.

Just as good, a deposit for property. But then thats hard for a kid.

Anything is better than interest from a bank in my opinion.

See ya's.

 

[grossreal]

hi all
a very interesting read.
sunfish I must admit I think you are right that in that you post if you can assist a tread.
I am a minno when it comes to trading and I do understand short and long trading and also cfd trading and with any market spooks cause people to not look at a market for what it is and I am not about to add to this post in that light as you share guys are alot better at it then me.
I would like to say that just because some one posts they do need to be given a little leeway and you may not agree with what they post, alot of the tiem I don't.
but its the only way to learn and for that I thank TheAnalyst as it has given me some thing to read and understand.
and am I going to sell down my shares and run for the hills.
no
is there alot more to come
yes
will you share guys make and lose alot of money.
yes to both.
my .002

 

[Sunfish]

I think you are right that in that you post if you can assist a tread.

I'd prefer it if you went to the Bridgestone shop if you need help with your tread.

 

[landllort]

Anything is better than interest from a bank in my opinion.

Even losing 10% in a month by being in shares? That'll take 3 years of dividends to pay back.

The market dropped back because it obviously went too high because people had forgotten about risk. The only question is how high was too high?

And for the guy that started this topic - firstly there are more investment classes than just shares and property. Secondly not all of the money lost in shares will be trasferred to other asset classes - a lot of it will be destroyed and people might even have to pay margin calls taking out debt from elsewhere. This could mean they have less money to spend on property, consumption and the economy.

The horrific credit crunch and mass foreclosures could be a buying opportunity for smart money to re-capture properties back again at cents on the dollar after selling them to overleveraged newbie landlords jumping up and down wanting to work hard for 2.5% yields? (is it too late to gloat?)

 

[Bandita]

The horrific credit crunch and mass foreclosures could be a buying opportunity for smart money to re-capture properties back again at cents on the dollar after selling them to overleveraged newbie landlords jumping up and down wanting to work hard for 2.5% yields? (is it too late to gloat?)

Hi landllort,

What/Where horrific credit crunch and mass forclosures are you expecting/predicting?

In Oz? When/why?

Cheers,
Jen

 

[jingo]

The horrific credit crunch and mass foreclosures could be a buying opportunity for smart money to re-capture properties back again at cents on the dollar after selling them to overleveraged newbie landlords jumping up and down wanting to work hard for 2.5% yields? (is it too late to gloat?)

Have you got evidence of this happening here??? I think you will find prices are rising in many inner city property markets. Not falling??

I would say there is nothing to gloat about!

Regards Jason.

 

[topcropper]

Even losing 10% in a month by being in shares? That'll take 3 years of dividends to pay back.

The market dropped back because it obviously went too high because people had forgotten about risk. The only question is how high was too high?

And for the guy that started this topic - firstly there are more investment classes than just shares and property. Secondly not all of the money lost in shares will be trasferred to other asset classes - a lot of it will be destroyed and people might even have to pay margin calls taking out debt from elsewhere. This could mean they have less money to spend on property, consumption and the economy.

The horrific credit crunch and mass foreclosures could be a buying opportunity for smart money to re-capture properties back again at cents on the dollar after selling them to overleveraged newbie landlords jumping up and down wanting to work hard for 2.5% yields? (is it too late to gloat?)

It sounds like you think you are the smart money landllort?

So shares dropped 10%, actually a bit more. So what! Thats normal. So tell me, where is the place to invest if not property and shares? I would like to find out from the smart money.

See ya's.