Willthe Reserve Bank raise interest rates?
- Thread starter Aceyducey
- Start date
See imo the reason why it hasnt crash yet is unlike shares, people really can't monitor the performance and how well their properties are doing. In shares if you see it drop you sell sell! The person who doesnt get to sell their share are the losers.
In property, the event can be played over a very long time but when it does hit, then that's when its good to buy. Just need a few more rises in interest and you'll start seeing the market spiral downwards or move very slow. Very slow CG will result in less newbie investors who have been jacking up the price. Every 1/3 person I met whether it is a friend, cousin or relative has bought or is thinking of buying a house for the sole purpose of Capital gains. Now I'm aware most investors on this board are into it for the long run, however the same cannot be said for most of the ones out there at the moment.
Remember the good old days (yes just 3 years ago) when Microsoft shares were $120 per share? It was wayyy over-valued but it kept rising and rising until it could not longer be sustained. The latest Microsoft share taken (5/november/2003) is $26.07 a figure that's more appropriate and real.
It's just a matter of time people start realising this is just like a tech boom, except the only problem is that instead of real-time updates, you have to wait months to see any changes.
Take for example my pal Bob. His name has been changed for the sake of privacy. Now Bob has heard that a year ago, his pal bought a unit and sold it receiving $100K in capital gain. Bob knows nothing about real estate, he doesn't even have his own house but he loves the idea of making $100K in 1 year. Heck, Bob works his butt of day and night and only makes $30K a year. Bob tells all his pals he wants to buy a property. Bob makes all his friends excited and they too want to buy a property. Bob doesnt even know anything about yield or property management tips. Bob decides to folk out $500 to goto to a seminar to get more tips & knowledge. After he attends one, he is wild about buying properties because the guy at the seminar is telling him stories about how he made $0 and is now a multi-millionare driving Ferrari's around. Bob goes and buys 2-3 properties in a few months time. After a few months, Bob's properties CG skyrocket! Bob tells his pals, they all do the same thing. Now, not only is Bob buying buy all his friends are buying and doing the same thing.
History has proven that we repeat our mistakes. If the RBA didn't increase the rates, we would of been in a bigger mess. Think about it, if they didn't slow the market now and kept it going, a likely crash would of even be more realistic.
At the present time, no-one knows what's going to happen with this boom. Not even economists, seasoned investors. When something like that happens, its a huge risk. Best to come up with some contingency plans to save yourself in case anything happens coz it will.
In property, the event can be played over a very long time but when it does hit, then that's when its good to buy. Just need a few more rises in interest and you'll start seeing the market spiral downwards or move very slow. Very slow CG will result in less newbie investors who have been jacking up the price. Every 1/3 person I met whether it is a friend, cousin or relative has bought or is thinking of buying a house for the sole purpose of Capital gains. Now I'm aware most investors on this board are into it for the long run, however the same cannot be said for most of the ones out there at the moment.
Remember the good old days (yes just 3 years ago) when Microsoft shares were $120 per share? It was wayyy over-valued but it kept rising and rising until it could not longer be sustained. The latest Microsoft share taken (5/november/2003) is $26.07 a figure that's more appropriate and real.
It's just a matter of time people start realising this is just like a tech boom, except the only problem is that instead of real-time updates, you have to wait months to see any changes.
Take for example my pal Bob. His name has been changed for the sake of privacy. Now Bob has heard that a year ago, his pal bought a unit and sold it receiving $100K in capital gain. Bob knows nothing about real estate, he doesn't even have his own house but he loves the idea of making $100K in 1 year. Heck, Bob works his butt of day and night and only makes $30K a year. Bob tells all his pals he wants to buy a property. Bob makes all his friends excited and they too want to buy a property. Bob doesnt even know anything about yield or property management tips. Bob decides to folk out $500 to goto to a seminar to get more tips & knowledge. After he attends one, he is wild about buying properties because the guy at the seminar is telling him stories about how he made $0 and is now a multi-millionare driving Ferrari's around. Bob goes and buys 2-3 properties in a few months time. After a few months, Bob's properties CG skyrocket! Bob tells his pals, they all do the same thing. Now, not only is Bob buying buy all his friends are buying and doing the same thing.
History has proven that we repeat our mistakes. If the RBA didn't increase the rates, we would of been in a bigger mess. Think about it, if they didn't slow the market now and kept it going, a likely crash would of even be more realistic.
At the present time, no-one knows what's going to happen with this boom. Not even economists, seasoned investors. When something like that happens, its a huge risk. Best to come up with some contingency plans to save yourself in case anything happens coz it will.
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Originally posted by Aceyducey
To guage people's perceptions
Cheers,
Aceyducey
I'm actually interested in this,,, a friend kinda suggested to have a look here in regard to investor physc at this point in time. I've read most stuff from the last 4 weeks or so, sorry no more time than that...
This kind of flip flop from +ve to slightly -ve, optimistic to somewhat pessimistic (if you can call it that) is intriguing, and I would add, often without the poster recognising the change.
Some look to yield, some to rates, some to CG, some just for fun (minority thank goodness, too hard to predict) but the heading of the herd is where I like to guess my money will perform the best, so far so good.
Interesting site and a good read.
d.
Hey - I guessed right. Gotta admit that was a lucky guess.
At least I put my money where my mouth is by short selling 80,000 WBC shares 5 days ago as I mentioned I was going to do.
Who said I was crazy for selling my apartment. The returns I've made since have far outstripped what I would have made if I stayed in.
Not bragging, just letting those who thought I had made a bad mistake know that I'm still "hanging in there" even without my property.
LB
At least I put my money where my mouth is by short selling 80,000 WBC shares 5 days ago as I mentioned I was going to do.
Who said I was crazy for selling my apartment. The returns I've made since have far outstripped what I would have made if I stayed in.
Not bragging, just letting those who thought I had made a bad mistake know that I'm still "hanging in there" even without my property.
LB
But NP, with property the people who sell their property when they drop a little are the losers!
The ones who buy intelligently & accumulate their portfolio over several cycles (preferably positive gearing) ALWAYS win.
So your view is a little off the mark.
And with shares - one effective strategy is also to accumulate intelligently selected shares over time & not sell. A couple of cycles & your portfolio is substantially more valuable.
Of course the leverage is much better with property, but in either case the long-term buy & hold strategy works wonders.
Cheers,
Aceyducey
I find what works wonders for me is, buying when something is undervalued and selling when its overpriced. You may never pick the top and bottom but you beat the averages over the long term.
Its often pretty hard to sell when the peak has been defined because you're competing with everyone else and there arent quite as many buyers willing to pay the asking price
Lb
Its often pretty hard to sell when the peak has been defined because you're competing with everyone else and there arent quite as many buyers willing to pay the asking price
Lb
L Bernham,
Most of the members of this forum have their money where their mouths are, so I resent your implication that this is not so.
It just so happens that the majority of people on this forum are quite astute investors.
And no-one really cares about you making a mistake or not. You chose to get out of property - I'd regard that as a major mistake for myself, but for you - with your doom forecasts (and the fact you bought a unit in an overbuilt metro) it makes perfect sense.
BTW - your tone is pretty clearly bragging as far as I see it. But I still don't really get what you think you have to brag about - your poor property investment decisions or making logical share market steps based on your beliefs.
Cheers,
Aceyducey
Yes, but what happens when Bob cannot service the loan due to higher interest rates and cannot get someone to rent out his I.P... You have to assume there are A LOT of these newbie investors out there in this boom and only time will tell whether or not they can hold on. If the herd says "THERES A CRASH SELL SELL OR LOSE EVEN MORE" down the track, these types of investors will absolutely do that. They will sell even though its a lost, why? Because they followed the herd/hype when everyone was saying "BUY BUY".
Reserve Bank Interest Rises
Hi Acey/Guys,
Heard J P Morgan from financial makets forecasting another 0.25% interest rate rise by the Reserve Bank for February next year, then a prediction that it needs to rise by another 0.25% after that.
Also on another forum someone mentioned that our favoured leader, little Johhny & Uncle Pete Costello, will get together, drop interest rates just before the federal election as a deal sweetner to all us Aussies. Food for thought anyway.
Cheers
Dave.B.
Hi Acey/Guys,
Heard J P Morgan from financial makets forecasting another 0.25% interest rate rise by the Reserve Bank for February next year, then a prediction that it needs to rise by another 0.25% after that.
Also on another forum someone mentioned that our favoured leader, little Johhny & Uncle Pete Costello, will get together, drop interest rates just before the federal election as a deal sweetner to all us Aussies. Food for thought anyway.
Cheers
Dave.B.
Hi all,
LB, So you put up $1.2 million as collateral with your broker to short these shares did you??
In another thread you stated you only invested $10k, for a potential loss of only $500 to $1000.
I personally don't believe you, as the numbers you use are too inconsistent.
Do the numbers and theories for your doom and gloom forcasts come from the same sources??
bye
LB, So you put up $1.2 million as collateral with your broker to short these shares did you??
In another thread you stated you only invested $10k, for a potential loss of only $500 to $1000.
I personally don't believe you, as the numbers you use are too inconsistent.
Do the numbers and theories for your doom and gloom forcasts come from the same sources??
bye
Since 11 September 2001, I never read any Stock quote. After read LB's message, I check WMC, not there anymore. It should be WMR. 5 Day's ago, it was quoted at A$5.15. Today, it is back to 5.14 at 10:14am.
Interest to see how to make money by shorting this stock.
However, LB's action gives some profound thinking :
I always want to unload (sell) my 2 under-performanced luxury apartments for more than 1 year and move the fund into houses. But never take action to do it. If I did it 1 year ago, I will make heaps of equity - at lease A$100,000.
LB, you are an action man.
Interest to see how to make money by shorting this stock.
However, LB's action gives some profound thinking :
I always want to unload (sell) my 2 under-performanced luxury apartments for more than 1 year and move the fund into houses. But never take action to do it. If I did it 1 year ago, I will make heaps of equity - at lease A$100,000.
LB, you are an action man.
Hi ToGetProperty
I checked on the share prices for WMR, and the price in June was $4.04 dropping to $3.27 in July.
If someone had been following this company closely, it is highly feasible that a calculated gamble could be taken to buy at that price, and then wait for the price to come back up.
Not being a share investor, I didnt even know what short selling was, so here is the description for those others who may not know.
I checked on the share prices for WMR, and the price in June was $4.04 dropping to $3.27 in July.
If someone had been following this company closely, it is highly feasible that a calculated gamble could be taken to buy at that price, and then wait for the price to come back up.
Not being a share investor, I didnt even know what short selling was, so here is the description for those others who may not know.
Originally posted by brains
I voted for a 25 point rise this morning for no other reason than to be contrarian.
then
I read the thread - tho i usually just scan them these days. What makes you think its not my personal opinion?- its just that my personal opinion is contrarian.
Its contrarian because the majority of the vote (and expert and public opinion) was voting for a no rise.
As it turns out i was right....NANANANA!!!!
The reason I didn't think it was your personal opinion was because you said "for no other reason"!
As for the contrarian part, well by definition your probably right, but I think most people only expected a rise if it didn't stay the same so I don't really see it as that contrarian. (IMHO of course)
As for the last part, congrats on fixing but is it necessary to try and rub peoples noses in it?? And the "NANANANA", you have got to be kidding?! Your a grown man aren't you??
I know that I am beginning to wonder!!
B
brains
Guest
Suggo,
As i posted elsewhere - lighten up mate......it was an attempt at humor, lame i know but hey, i cant be funny all the time
As far as rubbing peoples noses in it - i dont think so - i remember posting a couple of times a while back that now is the time to fix (when the fixed rate was below the variable).
If you (or other investors who didnt fix) cant see that as a big red neon sign saying to fix, well - thats not my fault.
In fact my first thought when i read your comment was of a great saying by Eleanor Roosevelt that someone used to use as their sig. on here and its stuck in my mind. It goes:
"No one can make you feel inferior without your permission"
If you can make the tenous connection there, youll know what im getting at.
As i posted elsewhere - lighten up mate......it was an attempt at humor, lame i know but hey, i cant be funny all the time
As far as rubbing peoples noses in it - i dont think so - i remember posting a couple of times a while back that now is the time to fix (when the fixed rate was below the variable).
If you (or other investors who didnt fix) cant see that as a big red neon sign saying to fix, well - thats not my fault.
In fact my first thought when i read your comment was of a great saying by Eleanor Roosevelt that someone used to use as their sig. on here and its stuck in my mind. It goes:
"No one can make you feel inferior without your permission"
If you can make the tenous connection there, youll know what im getting at.
Originally posted by brains
Suggo,
As i posted elsewhere - lighten up mate......it was an attempt at humor, lame i know but hey, i cant be funny all the time
As far as rubbing peoples noses in it - i dont think so - i remember posting a couple of times a while back that now is the time to fix (when the fixed rate was below the variable).
If you (or other investors who didnt fix) cant see that as a big red neon sign saying to fix, well - thats not my fault.
In fact my first thought when i read your comment was of a great saying by Eleanor Roosevelt that someone used to use as their sig. on here and its stuck in my mind. It goes:
"No one can make you feel inferior without your permission"
If you can make the tenous connection there, youll know what im getting at.
brains what you are not good at, is assumptions! I never said that I didn't already fix my loans did I??!!
Oh and you said it earlier to fix, so you are now justified to go about spouting off and thats not rubbing other peoples noses in it, nice bloke you are!!
You'll have to expand on the connection as I'm not getting what your at. I certainly don't feel inferior to you if thats the meaning LOL
As I posted elsewhere, open your eyes mate.......don't just decide because someone doesn't like how you say something means they haven't done what you said.
My first thought when I read your post
"Go to bed with a mirror so you can wake up to yourself!"
Now thats humour!!!!!
B
brains
Guest
Suggo, If you fixed your rates then what are you on about?
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