why there is no bubble - UK

[Sunfish]

As a comparison, I just checked the charts of our four big banks.

ANZ and WBC go back to '90 when they were at a peak of $6. Now approx $18. You could have bought these in '93 for $3-4/sh which gives about 600% cg.

CBA gives 600% gain since '92 and poor old beleagured NAT a mere 400% since'91.

I haven't checked these figures but a buy and hold strategy would have these banks now giving you a 30-40% fully franked dividend on the original stake. Remember this is a passive investment with no holding expenses. Had you held in a mutual fund, their charges are less than a PM's.

I hate cherry-picking examples too and don't normally do it but there are hundreds of thousands of Aussies who took Paul Clitheroe's (and others) advice "Don't put your money in the bank, buy the bank".

An elderly Aunt put a small amount into Channel 9 when they opened in Townsville (wasn't elderly then) and her investment is now worth well in excess of $100k and her divs allow her to live more comfortably on her pension. Real estate would have been an impossible dream because banks just did not lend money to single women.

I'm not sure why I keep sticking my head up like this but what the heck! There are many roads to Rome and we can't all travel the same one. It would be crowded and smelly

Thommo

 

[geoffw]

These damn bank stocks do really well unil I buy them

Your point is well taken.

My own dabbling in shares did not produce stellar results. My dabbling in RE has given me good results. The good times are over for now, but I'm now far more comfortable with RE. That's just me.

I continue to try share dabbling through my SMSF.

 

[nic]

Bill.L

Do you know what it was worth at the bottom of the cycle (and when did the bottom occur?)

Nic

 

[Aceyducey]

These damn bank stocks do really well unil I buy them

Your point is well taken.

My own dabbling in shares did not produce stellar results. My dabbling in RE has given me good results. The good times are over for now, but I'm now far more comfortable with RE. That's just me.

I continue to try share dabbling through my SMSF.

Let me know when you're buying so I can purchase some puts

Did you buy NAB recently?

Cheers,

Aceyducey

 

[Les]

Capital Growth 1981 to 2002

G'day nic,

I'm going to attempt to attach a file that:-

1. Might answer your question to Bill.L
2. Could be useful anyway.

Someone had earlier provided a link in Somersoft (somewhere) - it gives the median vaalues of major cities from '81 to '02

Here I go.....

Regards,

Edited later:- Didn't work, nic - file too large. I'll look for the link and post that if I can find it.

As a short answer, the file showed that between 1981 and 1990, the Melbourne median didn't "drop back" in any of those years, and, minimum growth in any year was ~5%, with some years climbing at > 20%

 

[Les]

Well, I found it nic, but, unfortunately it is now a dead link (at least, it didn't work for me) - but this was the post that referenced it...

http://www.somersoft.com/forums/showpost.php?p=51147&postcount=2

Sorry,

 

[Bill.L]

Hi all,

Nic, we could have bought similar around '92-95 for ~$95k. So yes there had been a decline, but sale and repurchase costs would have eaten most of that away, not to mention the time taken to look again and the "worry" that we were buying into a falling market.

Thommo,

"ANZ and WBC go back to '90 when they were at a peak of $6. Now approx $18. You could have bought these in '93 for $3-4/sh which gives about 600% cg."

It sounds wonderful for the banks, until you realize that you could have bought them in '84 ish at the $3-4/sh as well. For 10 years they went nowhere if you had held for the "long term". For the next 10 years will it be a repeat of '83-'94 or '94-'04, or something different!!

Les,

I also have those median price figures somewhere but I don't like using them.

bye

 

[geoffw]

Let me know when you're buying so I can purchase some puts

All the money going into the SMSF this year is going in tax. My provisional tax this quarter is greater than by total tax last year- so I'll be flat out paying that, let alone buying more (unless I sell my NAB )

Did you buy NAB recently?

Nope. 18 months ago. They are B&H, but I'm not optimistic.

 

[nic]

Bill.L, that's about 13.6% drop in price (not adjusted for inflation though). That's what you would expect after a boom I think.

Les, thanks for the reference. I went directly to Steve Navra's website, and the median prices table can still be viewed under 'News and Articles'. By the way, another article I found through that website quotes Dr John Hewson as saying that house prices in Australia are 40% overvalued and the housing market is on a brink of disaster.

http://news.ninemsn.com.au/article.aspx?id=3232

That opinion would vindicate some people on this forum

And it reminds me of an old joke that has nothing to do with real estate -

In 1917 Russia was poised on the edge of a cliff. But after the socialist revolution the country made a big step forward...

Cheers
Nic

Edited: Guys, don't read too much into my smilies - they are all over the place, I still haven't learnt how to insert them properly.

 

[Les]

G'day nic,

I went directly to Steve Navra's website, and the median prices table can still be viewed under 'News and Articles'.

Thanks for that, nic. I'd also done that yesterday (by following the searched link I posted) and couldn't find it. The key is in what you said (above) - "I went DIRECTLY to Steve Navra's site" - and there it was (a completely different layout to the old link).

So, for others, try navra.com.au and go to "News and Articles" then "NFS articles" (or something like that...)

Thanks again...

Regards,

 

[GreatPig]

All the money going into the SMSF this year is going in tax.

And I thought super was supposed to be a tax-effective vehicle

GP

 

[willair]

L B,
With this period of optimism in property,some owners have already taken
pre/emptive action and sold i know several which have gone down this road
they where too heavily geared from the start,but they still made serious money in the time frame that they invested in,some people say that if massive selling activity comes into play than naturally this pushes property down,i dont think so most i see inside this fourm are in for the long haul,i spent to day out in the brisbane valley and from what i have seen today one market slows another is just starting to climb thats the problem i see in the next year or so if you open your eyes and mind the money will always rain on the investor,just one simple question L B what part of the investment tree are you
investing in at present,i hope you are not still sitting at the investment bus stop waiting to find the fare on the ground..
Good luck LB
willair..

 

[geoffw]

Let me know when you're buying so I can purchase some puts

I told you I was holding NAB.

So if you had bought puts, you would have made a squillion.