Why all the D&G on this forum now ?!

[evand]

Lucky for the govt stimulus, low rates etc post GFC.

You fluked it prop.

I would ease up on the hubris right now guys as no one knows whats in store the next few years. My opinion is it ain't gonna be great.

I will put my hand up here and confess to having done that (or at least that part of your statement skater.)

I did so in June of 2009, when I was having a similar argument with investor888 (who by the way, did not have the decency to show up as we'd agreed, at the appointed time, to "see who was right". I guess because he was proved wrong by the market)

I posted this comment: http://www.somersoft.com/forums/showpost.php?p=561094&postcount=38

At the time we were buying 2brm units in the Inner West for $420K. Those very same units have been selling for $520K for many months now. So, $100K CG for 12 months worth of holding, if my advice was acted on

 

[MTR]

Actually, it is not unusual as this group seems to get all their facts from the Media which incidently is in the business of selling papers not the facts.

Being a longer term poster...I noticed that D&Gers enter when this happens. Last time this happened to such a large extent was during the phase just as we entered the GFC (2007).....

I suspect that they will be banging their drums for another 9 months or so till the next property cycle commences.

Just another day on SS!....nothing new really.

Even had the regular step of some of the dummy spitters leaving...I suspect some of them will return....after all SS is like a drug addiction!

...... and I do recall 2007 GFC a fantastic time to purchase, a little patience but I think it may be that time again.

Cheers, MTR

 

[VYBerlinaV8]

Having read through the last few pages of this thread, I think the issue might be one of definition. The "bears" seem to be being defined as those who think "property is too expensive and must fall in price". The "bulls" are perceived as those who think "property is always good and in the long term always goes up".

I think most of the experienced investors here actually fall into a different category. They are humans who can look at a market, and at information, and still find a way to make a viable investment, even when the standard approaches may not be working. This is very different from being a perma-bull. Even when the market doesn't go up, or behave the way we'd like, the assets bought by the experienced investors still contribute to their longer term plan.

 

[Propertunity]

You fluked it prop.

Yeah, I'm an overnight success that took 15 years

..... no one knows whats in store the next few years.

On this we can agree, I think. I've said the same.

My opinion is it ain't gonna be great.

I think that to do well, people will need to be very selective and do lots of DD to get it right. They'll also need to choose the right strategy.

 

[skater]

What many of us take offence to is your assumption that we don't understand that things can, and do, change quickly and that we will be really, really surprised when that happens.

We have looked at the possible problems, worked out a strategy and keep one eye out for problems. We are not all just forging forward with no thought to the downsides.

This assumption is what really annoys me and many others.

I'm happy to read what you have to say. I don't agree with all of it, but none of it is "surprising" or "news".

Yes! Yes! Yes! Absolutely correct.

 

[evand]

Nice selective editing.

Yeah, I'm an overnight success that took 15 years

On this we can agree, I think. I've said the same.

I think that to do well, people will need to be very selective and do lots of DD to get it right. They'll also need to choose the right strategy.

 

[skater]

I think most of the experienced investors here actually fall into a different category. They are humans who can look at a market, and at information, and still find a way to make a viable investment, even when the standard approaches may not be working. This is very different from being a perma-bull. Even when the market doesn't go up, or behave the way we'd like, the assets bought by the experienced investors still contribute to their longer term plan.

I think this is a very relevant point too.

 

[Propertunity]

Nice selective editing.

Well the 2 items I did not respond to were about:
1. Luck....and I'm not a big fan of luck. When I made the statement in June 2009 about gearing up and getting into the market, the FHOB had already been in place for 8 months (since 14 October 2008). It was patently obvious to me and others in the market that prices were rising fast ans showed no signs of slowing. The govt. then extended it until Sept 2009 and then some more to Dec 2009.

Then along came the GFC with more luck. Low interest rates, bank deposits being guaranteed etc.

2. the other was just a personal attack and I tend not to respond to those

 

[JIT]

Lucky for the govt stimulus, low rates etc post GFC.

In times of crisis, wouldn't you expect this anyway though?

Why would governments sit back and do nothing?

 

[bluestorm]

Propertunity, I've read a lot of your post, and I have to agree, out of a lot of the longer term Somersofters, you are by far the biggest spruiker. In many of your posts, nothing can go wrong with property, and any mention that it can must be from a D&Ger.

I would also raise the point that to trying to compare previous downturns with the likely downturn to come in the next few years, is not comparing like for like.
The last major downturn in Australia was the 1990 recession (with 16yrs of economic prosperity).
You now have a LOT more mum and dad investors in property (with many more negatively geared). There a a lot more first timers, and others who are highly geared (90%+). A lot more people with exposure to property, and who are teetering on the edge (a few rate rises to much, a rise in unemployment), and that has a wider impact that before.

 

[wylie]

I guess all those mum and dad investors in the whole of Australia have ALL logged on to Somersoft to form their decisions to buy .

You said in another thread, that what you are reading on here is pretty far removed from what the rest of us are posting and reading. At least, it is far from what I read into many of the current posts on the current situation.

Most of what I read is buy when you are ready, be aware, due your due diligence etc etc. I don't think I have read ONE post saying, full steam ahead, no problems ahead. Also, many posters are saying they are not buying, are reducing debt and sitting tight.

In all, I believe the message from this forum is quite restrained, don't rush in unless you know what you are doing, and have done your homework.

Maybe you just need to read without the inner dialogue which may be distorting what you are taking in.

 

[Propertunity]

Propertunity ....in many of your posts, nothing can go wrong with property,

Not true, I'm afraid. You assessment is shallow and not researched very well.

If you read properly, I think you'll find that I have said that LONG TERM nothing much goes wrong with carefully selected property. MEDIUM to SHORT term you can get dips and long flat periods. SHORT term if you have to sell you may make a loss.

and any mention that it can must be from a D&Ger.

No, not true. I am happy to admit that falls can & do occur in all markets. I have experienced that first hand. I am a big believer in risk mitigation so that you are not forced to crystalise a loss.

This comes down to property selection and having buffers or available credit to get you though a tough time.

What I do not accept is that "it is all different this time" and that we are "on the precipice" or "in a bubble about to burst".

I would also raise the point that to trying to compare previous downturns with the likely downturn to come in the next few years, is not comparing like for like.

You CANNOT compare a previous downturn with something that has not even happened yet and may not happen! There is no like for like. It is a future possibility only.

OK, so I'm an optimist. I make no apologies for that. Sorry if that offends you.

 

[Propertunity]

Alan, I have noticed on several different occasions you having to justify and explain that you believe in property prices going up long term whereas short to medium term it can go up, down or trend sideways.

Must be very frustrating having to explain again and again to different people your position and views about property? Cheers, Oracle.

Thanks Oracle.

I'm a patient man (most of the time)

 

[evand]

awwww...you poor thing.

Thanks Oracle.

I'm a patient man (most of the time)

 

[VYBerlinaV8]

In all, I believe the message from this forum is quite restrained, don't rush in unless you know what you are doing, and have done your homework.

A very good point. The problem is knowing whether you really do know what you are doing.

 

[Jonril]

Merry Xmas to all and Happy New Year

Just thought I would bump this thread with a D&G tale of Xmas past... I have been reading Benjamin Franklin's Autobiography to pass the time at work and came across the below...

"...There are croakers in every country, always boding its ruin. Such a one then lived in Philadelphia; a person of note, an elderly man, with a wise look and a very grave manner of speaking; his name was Samuel Mickle. This gentleman, a stranger to me, stopt one day at my door, and asked me if I was the young man who had lately opened a new printing-house. Being answered in the affirmative, he said he was sorry for me, because it was an expensive undertaking, and the expense would be lost; for Philadelphia was a sinking place, the people already half-bankrupts, or near being so; all appearances to the contrary, such as new buildings and the rise of rents, being to his certain knowledge fallacious; for they were, in fact, among the things that would soon ruin us. And he gave me such a detail of misfortunes now existing, or that were soon to exist, that he left me half melancholy.

Had I known him before I engaged in this business, probably I never should have done it. This man continued to live in this decaying place, and to declaim in the same strain, refusing for many years to buy a house there, because all was going to destruction; and at last I had the pleasure of seeing him give five times as much for one as he might have bought it for when he first began his croaking...."

 

[lizzie]

love it

 

[BayView]

A very good point. The problem is knowing whether you really do know what you are doing.

Well said.

You don't really have to know everything before you statrt, but it helps if you have some knowledge to begin.

I can tell ya's all that from my experience, the street doesn't have to have all green lights before you start...

Maybe just the first one.

What is the first green light I hear you ask?

The thought in your mind that you will go ahead and do it.

The other green lights will appear as you progress, gain some knowledge and confidence, but keep on driving.

When I was about to turn 40, I had a very large dose of mortality; time to DO something for my later years and family. Stop living for now so much. First green light.

But how? I knew of property, but other than a few PPoR's under the belt - not a lot.

Amazingly, right about then a flyer turned up in our letterbox for a Scaminar on property. You know; "come along for free tonight and learn how to secure you future".

We went along, bought nothing, listened a lot, and it ignited my mind. The second green light had appeared.

And almost 10 years later and many red lights (but many green lights) later I am here.

Not "Donald Trump" level here, but better than 10 years ago by a fair margin.

 

[GlennG]

The next 5-10yrs will be a different story. Harder to get gains, and negative gearing could be a killer in a flat or falling market.

bluestorm (or anyone else)
I just want to understand things better so hoping you could clarify what the problem is with negative gearing if house prices fall. Is it simply that rents might also fall, so you become even more negatively geared? I suppose that naively I assume that if house prices crash then as long as you can take a long-term view of things and keep paying the mortgage(s), then as long as you are not forced to sell, things will work out ok in the long run?

Maybe it's a killer if someone is going to sell after 5 or 10 years but not if the plan is to keep for at least 30 years?



And staying on a low LVR or even paying down debt (not sure if it was you that said the latter) - is that so you're then in a good position to buy when house prices have come down a lot, or is paying down debt critical in other ways when house prices are coming down?

 

[Sunfish]

bluestorm (or anyone else)
I just want to understand things better so hoping you could clarify what the problem is with negative gearing if house prices fall. Is it simply that rents might also fall, so you become even more negatively geared? I suppose that naively I assume that if house prices crash then as long as you can take a long-term view of things and keep paying the mortgage(s), then as long as you are not forced to sell, things will work out ok in the long run?

Maybe it's a killer if someone is going to sell after 5 or 10 years but not if the plan is to keep for at least 30 years?



And staying on a low LVR or even paying down debt (not sure if it was you that said the latter) - is that so you're then in a good position to buy when house prices have come down a lot, or is paying down debt critical in other ways when house prices are coming down?

Glenn, I'm 68 so I assume that you would not expect ME to to wait 5 or 10 years for any reversal in an investment. For me John Maynard Keynes' axiom "In the long term we are dead!" has a ring of truth to it.

I'll assume you are abt half my age, so I would like to ask, Why, if waiting for a turn-around is no good for the older members, should it be better for the young? Life is for living, not waiting for your ship to come in.

I have learned a bit about the psychology of investing, you know the "Fear and Greed" stuff over the years and know they are distructive. Greed tempts you into "sure fire" investments where fortunes have been made. Note the "past tense" of that statement. Fortunes have been made in property. "Fear" prevents you from doing something different, something they are not discussing at the parent's gatherings at school or sport. Read up on "draw down" and try to understand how it saps your strength, both emotional and financial.

There is always a bull market somewhere. I and a couple of others have discussed them in the past.

Oh, almost forgot. Leverage works both ways. It kills you during a downturn. A low LVR just means a slower death. :EEK: