Shares vs Property

[perthguy]

what concept dont you understand?

The concept I don't understand is shares or property. To me it's not an either/or proposition as put by the OP.

2 extremely wealthy people i know do not own a single share, all their wealth is in businesses and properties

Businesses and properties is a diversified investment portfolio. Put to them a businesses OR properties proposition and they will laugh you out of town.

but i also know some people who have all of their wealth in shares but do it better than the vast majority of the population.

IMO it would be risky for a joe bloggs investor to try to emulate this strategy.

ultimately what i was getting at is that there is no one right way to do it

Correct.

fanbois from either asset class explaining why theirs is better do my head in.

Same. I don't get it. To me, saying one asset class is "better" than another asset class is like saying money is better than cash.

 

[devank]

To me, saying one asset class is "better" than another asset class is like saying money is better than cash.

Money is better than cash! Because cash is subset of money

 

[Harro]

I have viewed those interviews you suggested thanks Jackbak. It seems we all are after the same thing; that being Wealth Creation, and I'm sure we all have our own definition of "Wealth".
Granted, there are many pathways to achieving financial freedom.
I apologise to any forum members whose feathers I have ruffled. Guess I am still angry with tenants who thought they didn't need to pay rent.

 

[perthguy]

I have viewed those interviews you suggested thanks Jackbak. It seems we all are after the same thing; that being Wealth Creation, and I'm sure we all have our own definition of "Wealth".
Granted, there are many pathways to achieving financial freedom.
I apologise to any forum members whose feathers I have ruffled. Guess I am still angry with tenants who thought they didn't need to pay rent.

lol. I inherited a tenant when I bought a development site with a cruddy old house. Turns out she thought it was ok to wreck the house, not pay rent and not pay for any damage when she left... think 'holes in the walls' type damage. I was pretty angry too. Anyway, the house was a wreck, so me and my investment partner got stuck in, ripped out the kitchen, bathroom, laundry and carpet (this is fun to do when you are angry!!!). Repaint, new bathroom vanity and mirror, secondhand kitchen from gumtree, secondhand (as new) carpet from a mate ($100 for the whole house) etc. We have just rented it back out for $110 pw more than prevously for less than $5k of materials (but a lot of labour).

My first point is that a tenant trashing a house is not always all bad. It could be an opportunity to renovate and make some extra cash. My second is that I won't be selling my shares any time soon!

 

[jackbak]

I have viewed those interviews you suggested thanks Jackbak. It seems we all are after the same thing; that being Wealth Creation, and I'm sure we all have our own definition of "Wealth".
Granted, there are many pathways to achieving financial freedom.
I apologise to any forum members whose feathers I have ruffled. Guess I am still angry with tenants who thought they didn't need to pay rent.

I'm glad you read them Harro, the thing I have taken from those interviews is they are all different and there's no secret formula to wealth that everyone should follow, but there are strategies to follow that will improve your chances. There's an endless number of ways to create wealth, some chose shares, some chose properties, some start businesses, personally I'm doing all three.

The good thing about those interviews is that in many cases it shows people who have actually made a lot of money out of property, not just invisible people on a forum banging on about how much they're going to make once the next boom hits ;-)

 

[D.T.]

I apologise to any forum members whose feathers I have ruffled. Guess I am still angry with tenants who thought they didn't need to pay rent.

How is this any different to a company that decides they dont want to pay a dividend?

 

[D.T.]

Lets take an example. BHP is about $38 now. Say you are writing a call at $40.00 for 100 units.
Here are three directions it can go.
1. Goes up to $42.00
2. Stays at $38
3. Drops to $35

What will you end up having at the end of each scenario?

BTW how did you manage to change your user name?

http://www.asx.com.au/products/equity-options/covered-write-options-trading-strategy.htm the graph at the bottom answers your question I believe.

 

[devank]

http://www.asx.com.au/products/equity-options/covered-write-options-trading-strategy.htm the graph at the bottom answers your question I believe.

Thanks DT.

How does a company benefit from all these??

 

[D.T.]

Thanks DT.

How does a company benefit from all these??

Because they can give them to their employees / directors as bonuses without giving changing ownership levels

(It's mostly the ASX and the brokers that benefit as they receive fees / brokerage)

 

[see_change]

Fixed that for you!

Tend to agree with Watagos after a few months of reading into shares.


pinkboy

ahh ... a few months reading into shares ....

an expert

The reality is when you put money in , EVERY THING CHANGES .

SERIOUSLY .

Every one who I have met who has made money in shares , has spent a lot of time loosing money before they work out how it works .

The basic principles of property are much easier.

Bidding at auction you have competition from at most a hand full of people.

When you put money in the market , you are competing with thousands of people hwo have been doing it successfully for years .

Personally , I think they lick their lips and think ... another one ... hehehe

Cliff

 

[D.T.]

Every one who I have met who has made money in shares , has spent a lot of time loosing money before they work out how it works .
Cliff

Maybe theyre just slow learners?

 

[pinkboy]

ahh ... a few months reading into shares ....

an expert

The reality is when you put money in , EVERY THING CHANGES .

SERIOUSLY .

Zzzzzzzzzzz, hook, line and sinker!

Lighthearted.

Don't worry, I analyse everything, then analyse it some more! Sure, I have some guts to chuck some $$$ into shares, but not without it being an informed choice. I also have a lot of time left, I'm only 30.

I've put a lot of time and effort into my business and into property over the last 10 years. The next 10, 20, 30 years who knows - plenty of time for this young grasshopper!

pinkboy

 

[wategos]

Because of higher investment income and tax advantages moving most of my investments to shares means I can stop working at least 8 years earlier, which is important for me now.
I am well on the way through this transition, but being patient since I expect some more better entry points this year.

 

[D.T.]

Because of higher investment income and tax advantages moving most of my investments to shares means I can stop working at least 8 years earlier, which is important for me now.
I am well on the way through this transition, but being patient since I expect some more better entry points this year.

How do you judge your entry points?

 

[wategos]

How do you judge your entry points?

It's not an exact science but I like to buy when a share of a good consistent dividend paying company is trading in the lowest quartile of the last 12 months price history, and when overall world market sentiment is down not just on that company.

As we have seen the last 2 years there could be opportunities again in the May/June period.

 

[see_change]

How do you judge your entry points?

Different basic ways to time entry , either based on of the fundamental analysis ( FA ) of a companies performance / debt / profitability / product potential etc or based on technical analysis ( TA ) of the share chart .

With each method ( FA or TA ) you can time on the basis of whether the share is underperforming ( in the expectation it's going to improve ) of a share is performing well ( and you expect it to keep on performing well )

What wategos is suggesting is a combination of both , shares that are fundamentally sound but are performing poorly ( on the basis of recent history ) on the basis of TA . Quite a good approach .

You get some people , the most high profile being Warren Buffett who buy purely on the FA ( so that obviously works ) and many high profile traders who successfully trade purely on the basis of TA so either way can work. On the share forums the FA va TA debate is a bit like the Share Vs Property debate . It always keeps coming uyp , one side will never convince the others and a good approach can be the combination of both. They attract different types of persons. I'm a TA person , though I always like to glance through the FA of a company before I buy it and may use that to decide which shares to buy out of a few possibles.

Currently we don't have any money in the market , because we're fully committed to property as I think that is where the easy money is at the moment . The ASX has been in a range ( roughly between 4000 - 4500) since it's initial recovery from the GFC.

At some stage it will break out and start trending up , and it's threatened to do that on several occasions , as it is now , but so far it's kept turning down.

There are always individual shares that will out perform the markets , but the easy money in shares occur when the whole market is trending up , as is occuring in property at the moment .

I apply TA principles to the property market and it has work well for me.

Cliff

 

[ok180]

What will you invest in after a bad shares problem?

Emu eggs.

I remember people like Harro wooping it up prior to Lehmans collapsing. When they start coming out of the woodwork again like this it's time to worry.

 

[D.T.]

Thanks cliff.

The "you" in my previous question was the specific "you" and not the generic "you". Im well aware of methods amd judge my own entry and exit in a specific way, but since wategos mentioned entering, im curious about that entry. Partially as I dont see any value in market atm, but appreciate everyone's differently tinted glasses

 

[devank]

Take Qantas for example. TA seems alright but how can you figure out the FA? It could shoot either way!

 

[D.T.]

Take Qantas for example. TA seems alright but how can you figure out the FA? It could shoot either way!

For the strategy I use, wouldnt touch qantas with a 100 ft plane. Havent looked at the ta side, I dont play that game anymore.