Hey Francesco.
Thanks for the comments. I wasn't going to reply as I thought people were getting tired of the share stuff, but since no one has added to the thread, I'll go on bit.
I notice that on the 'dollar cost trading thread', that people are saying that shares have nothing to do with property. How wrong that is. I see that shares and property are so related in so many ways, especially the boom and bust cycles. How about in October 1987. The sharemarket was more overvaluered then than at just about any other time. It tripled in a matter of years. Even more overvalued then March 2000. What happens? A bust of course. Anyone who knew how to value the sharemarket would have been out for six months. Then what happens? Everyone piles into property. Then what happens? Property busts in 1989. It's all so obvious to me.
What about a few years ago. People are in a property buying frenzy. Houses are so overvalued in Sydney that it would take 50 years of rent to pay a place off. When ever that happens, I'll guarantee that shares will be cheap, and they were. Most blue chip shares were paying a dividend higher than the cost of borrowed money in March 2003. I kept a few newspaper articles from the time. One said, 'Who wants to buy shares'. This was right at the bottom. What an oppitunity. And I notice that people are complaining about the media being negative to property at the moment. They must have forgotten how negative media was to the sharemarket 2 years ago, and how bullish property. Every story was about the lossers. Nothing about the ridiculously low PE's or the great fully franked dividends. No mention of the fact that profits were gradually increasing in a booming economy. Iraq and September 11 had a lot to do with it, plus the tech wreck. People were burnt and vowed never again to buy a share. If only people learnt how to value an investment.
Actually, then again, I hope they don't. Then the great oppitunities wouldn't exist. Anyone who won't invest in the sharemarket, is missing the best value investment class half the time. And how come, on this forum, when people talk about shares, they talk about trading? What about investing. I try to hold quality companys for years. With trading, there is always a winner, and a looser. It's a zero sum game, where the really clever and brave make heaps, and most loose. I might only buy and sell shares once a month. Last 12 months it's been swapping from banks and retail into resources. I try to hold anything for 12 months for GCT. I average up, after entry, but never down. I like to hold about 20 companys. I try to cut loosers, generally do, but it's hard.
I'm fully set now in resource stocks. The prices of Iron Ore, Oil, Coal, metals have been in an uptrend for years, but stocks only took off 12 months ago. And it's not the usual boom/bust, undersupply/oversupply cycle. This time it's just increasing demand from China. Supplies can't keep up. China is already using 40% more coal, consuming 68% more meat, and 148% more steal than the US. BHP shares have gone from $8 to $19, yet they are at better value than they've been for years. Have a look at what the share prices of coal companys have done. It's not crazy speculation, it's just people working out how much money these companys are making now that coal has doubled or tripled in price. And the profits don't double or triple, the profit could go up by 1000% in that situation. I've got GCL, MCC, and CEY. Here's an interesting article...
http://www.gold-eagle.com/gold_digest_05/hamilton031105.html
Anyway, I'm glad you agree with me. I think I can profit immensly from the inverse relationship of property and shares. It's worked out OK so far. I think the sharemarket is now fair value, but I'm sure the lemmings are getting ready to pile in. Bring it on. I'm just busting to buy a hobby farm near the coast.
See ya's.
Thanks for the comments. I wasn't going to reply as I thought people were getting tired of the share stuff, but since no one has added to the thread, I'll go on bit.
I notice that on the 'dollar cost trading thread', that people are saying that shares have nothing to do with property. How wrong that is. I see that shares and property are so related in so many ways, especially the boom and bust cycles. How about in October 1987. The sharemarket was more overvaluered then than at just about any other time. It tripled in a matter of years. Even more overvalued then March 2000. What happens? A bust of course. Anyone who knew how to value the sharemarket would have been out for six months. Then what happens? Everyone piles into property. Then what happens? Property busts in 1989. It's all so obvious to me.
What about a few years ago. People are in a property buying frenzy. Houses are so overvalued in Sydney that it would take 50 years of rent to pay a place off. When ever that happens, I'll guarantee that shares will be cheap, and they were. Most blue chip shares were paying a dividend higher than the cost of borrowed money in March 2003. I kept a few newspaper articles from the time. One said, 'Who wants to buy shares'. This was right at the bottom. What an oppitunity. And I notice that people are complaining about the media being negative to property at the moment. They must have forgotten how negative media was to the sharemarket 2 years ago, and how bullish property. Every story was about the lossers. Nothing about the ridiculously low PE's or the great fully franked dividends. No mention of the fact that profits were gradually increasing in a booming economy. Iraq and September 11 had a lot to do with it, plus the tech wreck. People were burnt and vowed never again to buy a share. If only people learnt how to value an investment.
Actually, then again, I hope they don't. Then the great oppitunities wouldn't exist. Anyone who won't invest in the sharemarket, is missing the best value investment class half the time. And how come, on this forum, when people talk about shares, they talk about trading? What about investing. I try to hold quality companys for years. With trading, there is always a winner, and a looser. It's a zero sum game, where the really clever and brave make heaps, and most loose. I might only buy and sell shares once a month. Last 12 months it's been swapping from banks and retail into resources. I try to hold anything for 12 months for GCT. I average up, after entry, but never down. I like to hold about 20 companys. I try to cut loosers, generally do, but it's hard.
I'm fully set now in resource stocks. The prices of Iron Ore, Oil, Coal, metals have been in an uptrend for years, but stocks only took off 12 months ago. And it's not the usual boom/bust, undersupply/oversupply cycle. This time it's just increasing demand from China. Supplies can't keep up. China is already using 40% more coal, consuming 68% more meat, and 148% more steal than the US. BHP shares have gone from $8 to $19, yet they are at better value than they've been for years. Have a look at what the share prices of coal companys have done. It's not crazy speculation, it's just people working out how much money these companys are making now that coal has doubled or tripled in price. And the profits don't double or triple, the profit could go up by 1000% in that situation. I've got GCL, MCC, and CEY. Here's an interesting article...
http://www.gold-eagle.com/gold_digest_05/hamilton031105.html
Anyway, I'm glad you agree with me. I think I can profit immensly from the inverse relationship of property and shares. It's worked out OK so far. I think the sharemarket is now fair value, but I'm sure the lemmings are getting ready to pile in. Bring it on. I'm just busting to buy a hobby farm near the coast.
See ya's.
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