USA, Ireland, UK, Spain and Japan Property Bubbles versus Australia

[hobo-jo]

In fact the chart I just posted shows that houses didn't do well during a time of high inflation, see the period of the 1970s - 1980s prices did nothing (fell) in inflation adjusted terms for 15 years or so. In my opinion the best case scenario will see something similar to that playing out.

 

[Aaron Sice]

true, but funnily enough so did construction costs, so it must be a weighted average or something,because duringthe sametime contruction prices should have risen.

 

[trendsta]

In fact the chart I just posted shows that houses didn't do well during a time of high inflation, see the period of the 1970s - 1980s prices did nothing (fell) in inflation adjusted terms for 15 years or so. In my opinion the best case scenario will see something similar to that playing out.

Hi HJ,

Do you have a nominal graph, not adjusted for inflation .. one with log scale would be perfect..

Not sure how "real" the "real house prices" in the chart are..

im not a fan of adjusting nominal prices for "inflation" ... As inflation is the biggest bogey in the whole system, and everything in the system is based around it...

 

[Intrinsic_Value]

My own investment bias is income producing assets. My focus is on two of the big 'dogs' of US banking: Citigroup and Bank of America.

After a hold off over the last 6 months (i bought a small quantity of Citi at US$40 earlier this year and have held), i am now resuming buying + regaining exposure to BAC.

To compensate for extra volatility risk i am reducing leverage.
My risk: the capital invested in these stocks, i dont think it will be a wipe out, but am expecting volatility to be massive.

Upside potential over 10 years: 400%+ (before gearing)
Downside potential: unless these companies blow up (they are complex financials, i think they will still be around in 10 years, ie on a 10 year viewpoint, i think capital is safe). However volatility as expressed by share price will be huge.

Current position in the portfolio:
Citigroup 2% (have been topping up recently)
Bank of America 1% (recent purchase).
QUOTE]

this is working out very nicely so far for 2012. Pity about the small position relative to assets.

 

[Intrinsic_Value]

and to make matters more exiting, i have got my first exposure to a greek listed company and have added to it.

Yip for all the s***t hitting the fan about Greece, i now have a position in the Greek stock market.