world wide financial crash will it make property cheaper

[Intrinsic_Value]

then would someone please explain why the:
eruo is up after the release of moody's downgrade on greece's debt to junk status;
VIX is stabalising to the downside?

nothing is as it seem on the surface;
global markets are moving fast;
by the time it hits your screen, often its a KNOWN KNOWN, and thus priced accordingly.

There is money to be made, but not when you have a sit down consensus chat about it, by then the opportunity is lost, and you actually have the risk of RISK.
Risk in this market is not just risk prima facie, but risk by comming to the table late.

How am i holding my head above water so far???
by keeping TWO steps ahead of the market.
How do i achieve this?
no i am not smarter than the experts,
but i have a longer term investment horizon,
i hold to my investment models, i hold to my intrinsic values.

AND LET ME GIVE YOU ONE HEADS UP, that the market hasnt caught onto yet,
YLD will become an increasingly important focus in times to come.

I mentioned the risk of a secular bear market, this is starting to come out in the financial press now.

Next stage will be yld.


think about it.

 

[Ausprop]

as a result of declining cap values you mean?

 

[josko]

Nice post intrinsic,

Yield and cashflow have been my focus since the realisation hit me about 6 months ago that none of the "experts" know what is going to happen, so how can I? I stay as educated as possible but can't read, evaluate and process every ounce of info that I need to.

Best thing for me to do personally is to make as much money as I can now through different income streams - fingers in many pies and make my investments as cashflow positive as possible.

I was caught off guard two years ago - it won't happen again.

Francine: From a finance point of view, it would possibly be better for the guarantor to simply draw down on their equity and give your relative the cash rather than have the bank hold interest over the guarantor's property. In that instance, the lender (your guarantor) is only at risk of losing their cash component rather than their whole house.

Regards JO

 

[Aaron Sice]

yield is where it's at!

 

[tess85]

I also have a close friend who has alot of blue chip type stocks and wonder if he should be selling them and getting gold instead.

Why are you wondering on behalf of your friend? has he asked for your advice?

 

[hobo-jo]

then would someone please explain why the:
eruo is up after the release of moody's downgrade on greece's debt to junk status;

Why? Because those moving the market (e.g. commercials) are long and the speculative non-commercials are short. Though you will usually see the commercials publicly indicating the opposite of what they are trading

YLD will become an increasingly important focus in times to come. Next stage will be yld.

I partially agree. I do agree the next stage will be yield, but think that could still be some years off. I think the best strategy is still defensive assets or those that will protect capital/wealth. This is one of the reasons Gold has been performing so well and in my opinion will continue to do so in the short to medium term. Moving into assets with high yields while danger of capital destruction is still likely seems overly speculative to me.

 

[Intrinsic_Value]

Why? Because those moving the market (e.g. commercials) are long and the speculative non-commercials are short. Though you will usually see the commercials publicly indicating the opposite of what they are trading


I partially agree. I do agree the next stage will be yield, but think that could still be some years off. I think the best strategy is still defensive assets or those that will protect capital/wealth. This is one of the reasons Gold has been performing so well and in my opinion will continue to do so in the short to medium term. Moving into assets with high yields while danger of capital destruction is still likely seems overly speculative to me.

Gold could well be the trade of the decade, its got the right story behind it, the trend is your friend, supply cant be manipulated quickly in the short term.

I have no argument there, but i dont trade, so i cant participate. I know this sounds pedantic but mixing the two thought processes is very challenging and in my opinion dangerous.

 

[Ausprop]

here is a formula to calculate the intrinsic value (and therefore the floor price) of a property...

take the weekly rent, multiply by 52 and divide it by .12

that's what the property is worth at least

 

[Sunder]

Is that a bit low? That would make a house returning 400/week rent, cost $173k

Where would you find a house that returned that high a rent that cheap?

 

[Intrinsic_Value]

here is a formula to calculate the intrinsic value (and therefore the floor price) of a property...

take the weekly rent, multiply by 52 and divide it by .12

that's what the property is worth at least

sounds very safe to me (probably even got a discount factor(margin of safety) built into it). So long as the rent is sustainable (ie not bubble like rent due to short term supply deficiency).

Nice and simple

 

[Sunfish]

I have no argument there, but i dont trade, so i cant participate. I know this sounds pedantic but mixing the two thought processes is very challenging and in my opinion dangerous.

Gold, to my mind, is the hardest thing to trade and I wouldn't go there so I buy it with idea of holding. I started buying them both when prices were much (abt 70%) lower than today and have never re-sold an ounce.

You have painted yourself into a corner so that you couldn't possibly buy the only risk free asset because you can't apply your secret formula to it. Suits me.

 

[Intrinsic_Value]

You have painted yourself into a corner so that you couldn't possibly buy the only risk free asset because you can't apply your secret formula to it. Suits me.

Its not RISK FREE, you dont have 100% guaranteed return of your capital.

 

[Sunfish]

You don't understand gold and money. It is the only asset (silver is fractions of gold) that holds it's value long term.

You may be right in as much as it might lose 1% next week measured in US$ but it may go up in A$. It is not the gold changing value, it is the perceptions of relative safety of fiat currencies that changes.

Gold has risen against ALL currencies for years (I'll rephrase that: All fiat currencies are deflating towards zero) and has seen most collapse to zero over the millennia.

I've got a fifty trillion Zim dollar note that is an example of another dead currency. The franc, yen and peso once had value much greater than their current standing.

 

[Aaron Sice]

I've got a fifty trillion Zim dollar note that is an example of another dead currency. The franc, yen and peso once had value much greater than their current standing.

let's not forget the Indonesian Rupiah - i think we've all folded a cool mil or two out for a upper-end meal.

 

[Ausprop]

Is that a bit low? That would make a house returning 400/week rent, cost $173k

Where would you find a house that returned that high a rent that cheap?

you probably wouldn;t. on that basis i agree housing is overpriced or under yielded, possibloy both. nothing to say it will change tho as it is an emotional purhase as much as financial

 

[Ausprop]

let's not forget the Indonesian Rupiah - i think we've all folded a cool mil or two out for a upper-end meal.

and the d-mark, v1 and v2

the polish currency, wich dropped 6 zeros off the end

let's not forget salt... from whence originated our 'salary'

 

[Intrinsic_Value]

You don't understand gold and money. It is the only asset (silver is fractions of gold) that holds it's value long term.

You may be right in as much as it might lose 1% next week measured in US$ but it may go up in A$. It is not the gold changing value, it is the perceptions of relative safety of fiat currencies that changes.

Gold has risen against ALL currencies for years (I'll rephrase that: All fiat currencies are deflating towards zero) and has seen most collapse to zero over the millennia.

I've got a fifty trillion Zim dollar note that is an example of another dead currency. The franc, yen and peso once had value much greater than their current standing.

Mate it looks as though you 'haved boxed yourself into a corner'.

Risk free is risk free, it means i get my capital back, pure and simple.
Gold does not offer this over all time periods, therefore its not risk free.
It is a store of wealth, but not a risk free store of wealth.

 

[Sunfish]

Mate it looks as though you 'haved boxed yourself into a corner'.

Risk free is risk free, it means i get my capital back, pure and simple.
Gold does not offer this over all time periods, therefore its not risk free.
It is a store of wealth, but not a risk free store of wealth.

And lately it has been a highly profitable store of wealth.

I have no idea how you can invest with a one dimensional mind, but clearly there is nothing worth discussing between us.

 

[Intrinsic_Value]

And lately it has been a highly profitable store of wealth.

I have no idea how you can invest with a one dimensional mind, but clearly there is nothing worth discussing between us.

agreed so maybe you can refrain from commenting on my posts

 

[Sunfish]

I will always post on "money" threads. You can have "shares" if you like . (Is that silly enough for you?)