# Are you preparing for hard times?



## MR. (25 October 2008)

The following is my post from February from the "XAO Analysis" thread.  Thought it is still of interest:

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In 1930 and 1955 the American share market (Dow) was at the same value, after 25 years.
In 1965 and 1982 the American share market (Dow) was almost the same value after 17 years.

From the Dow's high in (1929 at 330) to (2007 at 14000) the American market has increased by 5% compounding over 78 years.

However the market in 1929 was so over priced that 3 years later the Dow dropped by 87% from approx' 330 to 43.

From 1932 (the low at 43) to 2007's high the Dow had increased 9% compounding over 75 years.

From 1982 to 2007's high the Dow had increased 12% compounding over 25 years.
From 1982 to 2003 the Dow had increased by 11.5% compounding over 21 years.
From 2003 to 2007's high the Dow had increased 13% compounding over 4 years.

Australia (XAO / All-Ords)
From 1982 to 2007's high the XAO had increased 11% compounding over 25 years.
From 1982 to 2003 the XAO had increased by 10% compounding over 21 years.
From 2003 to 2007's high the XAO had increased 22% compounding over 4 years.

If we had another 22% rise in Australia in 2008 and the Dow had no growth, this would bring us in line with the Dow's 1982 to 2007 figure of 12% compounding as above.

My guess is that mining in Australia from the likes of BHP over the past 5 years has only added a few percent to that 22% compounding figure above. For example both CBA and WOW both have increased 20 odd percent compounding over the past 5 years. 

View attachment 25114


So the over all market was flat for 20 years, then raised for 15 years, then went flat for 15 years and raised again for 25 years. 

What next? Just thinking out loud and tring to work out what I am going to do... 

I don't feel safe with my superannuation in shares over the next 10-20 years! I guess alot of people just added to their share super'. Hmmmm 
Look out The Debt Bubble.....

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Debt bubble.... What Debt Bubble! Hmmm

So what did I do?  Put 100% in cash from shares. Taking loss from Japan. Then slowly went back in 20% to ASX shares (D HEAD) and got burnt. (still own some in GRR & GBG only and still burning).  

Next is property.

Bought an Acre with a house and a big shed.  Will use shed and land on the quite for work (what work I don't know yet).  No commercial rent.  Also from here I can protect any equipment from any undesirables.  Remember they've had jobs in recent years.

Have not sold original house yet.  Should have done the transition sooner than now but it took some time to find the right acre.  But I still think its not too late to sell and it is on the market now. However I am expecting some decrease from all the media down grading property. 

Shares should bounce soon. What you do during the bounce is your choice. Shares are oversold for now. 

What have others done or been doing?


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## Aussiejeff (25 October 2008)

MR. said:


> ...
> 
> Shares should bounce soon. What you do during the bounce is your choice. *Shares are oversold for now*.
> 
> ...




Hmmm. What evidence is there to back that assertion up? That's a pretty bold statement - I've read plenty of optimistic "experts" reports over the past 2 months or more advising us all to "buy, buy, buy the bargains!" 

Well, AFAIC they have a looong way to go down yet. The _real_ bargains will appear when all the remaining "optimists" and "bargain hunters" have been swept away into the Pit Of Despair by a further succession of Share Market Tsunami Waves. That will be the time to start scratching around in the flotsam and jetsum.

There's plenty of real mounting evidence for that scenario too. Consider that NEXT quarter's company reports have not yet come into the equation, let alone the Jan-March quarter which is heading for the rocks as well. If you think the market is at bottom now, where do you think it will be by then? Have you any idea how horrible many of those company results are going to be?

Oh well. Good luck with your bargains. Better you than me. I'm heading back to the cave..


zzzzzzz.zzzzz



aj


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## MR. (25 October 2008)

Aussiejeff said:


> Have you any idea how horrible many of those company results are going to be?




We can guess!  But I still think there will soon be a bounce.  Put it this way I don't think I will buy.  Did you not understand my full post?

Anyway, as per thread, what have you done or doing to prepare for hard times?


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## ROE (25 October 2008)

Aussiejeff said:


> Hmmm. What evidence is there to back that assertion up? That's a pretty bold statement - I've read plenty of optimistic "experts" reports over the past 2 months or more advising us all to "buy, buy, buy the bargains!"
> 
> aj




ah, I repeat mostly Warren word here and it may not be exact.

I do no know what stock price will be tomorrow or the year after I bought them but one thing I know for sure is the index will goes higher post the crash 

now if you applied that logic into the conviction that the wonderful company you buy is now below it intrinsic value, then you can be sure you make a fair return in the future.  By fair I mean 4% yield and 7% capital appreciation and if it return fairer than fair well you just get richer quicker.

Who cares what analyst or paper say buy or sell, what matter is YOU
have you done enough research to warrant a purchase that through thick and thin you know you will win in the end.


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## Glen48 (25 October 2008)

When you consider we are not in a recession or will not have a recession according to the well paid bank experts  et al no one has any idea this is just like War time with rumours flying about every hour. I do know I have never seen any thing like this in 30 yrs and it is breaking records each week. I predict shares like LNC will go down to about 1- 1.50 I am trying to get as cash up as possible IF there is a turn.
But living in a humpy on a river bank could be a good idea all you need is a Gun Tin food medical supplies and a tooth brush,


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## Aussiejeff (25 October 2008)

Glen48 said:


> When you consider we are not in a recession or will not have a recession according to the well paid bank experts  et al no one has any idea this is just like War time with rumours flying about every hour. I do know I have never seen any thing like this in 30 yrs and it is breaking records each week. I predict shares like LNC will go down to about 1- 1.50 I am trying to get as cash up as possible IF there is a turn.
> But living in a humpy on a river bank could be a good idea all you need is a Gun Tin food medical supplies and a tooth brush,




You forgot the dunny paper! 

I don't like newspaper - gives me the itch! 

S'pose I can always use the toothbrush..... :flush:


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## MrBurns (25 October 2008)

Cant understand people saying we will avoid a recession it seems fairly obvious that it will hit everyone hard. 

That false upbeat talk just confuses people more, better just lay it on the line and prepare to support those most in need when the time comes.

I'm sitting on cash and have no shares, I was waiting for this to happen for the last 3 years, but have no idea when to go into property or shares all I know is it wont be any time soon and don't even know if the cash will still be there when I want it, thats how uncertain times are right now.

I should be looking at gold or Govt bonds but what a hastle, I have to go through hoops to set up a Super account to do anything.


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## Aussiejeff (25 October 2008)

MR. said:


> We can guess!  But I still think there will soon be a bounce.  Put it this way I don't think I will buy.  Did you not understand my full post?
> 
> Anyway, as per thread, what have you done or doing to prepare for hard times?




I guess your comment that you thought shares were oversold at this point stood in stark contrast with the general gist of what you were indicating - that in all likelihood, the sharemarket is NOT going to offer good increase in value for the next 10 years or so given past trends.

As per thread, I cashed in 75% about 2 months back. I thought the loss I took then was bad enough, but boy -  am I glad I did!

Have enough cash put away to tide over the wife and I for about 2 months of total expenses at current value of $AU - just in case of the unexpected (I was a Boy Scout in the 60's ).

With cash from sale of shares, updated/upgraded most of our big ticket items (computer, fridge, washer, dryer, car, TV's, DVD recorder etc) while the $AU was at the $US90-95c level. I consider this was one of my better judgement calls! 

Income from bank interest, my disability pension, wife's Newstart allowance keeping head above water - so far. We rent a nice small house from her brother (fixed - no rent increase since moving in 4 years ago, no rent increase foreseen). She also helps him out in his local shop. 

So far, so good. Just very happy I'm not forced to be in a job I have grown tired of and that I was planning to retire from. A few of my younger mates are in that boat right now and they are spewing that their only planned option to escape their "treadmill" existence is now effectively taken from them (ie: retire on super) since the return on their super has plummeted too far to be viable. They are stuck for now like many others of imminent retirement age. Too bad if they are made redundant anyway. They can't get pension because their ages and better health don't allow it.

My dear, departed mum & dad were born in the early 1920's and lived through the depression. I heard plenty of stories about that time and how they coped. So I draw a bit of strength from them and realise that there is an awful long way to go before we get to THAT scenario. Both my wife's dad and my own dad remember going to school for years with no shoes. Simply couldn't afford them.

When WE are having to re-nail the soles of our boots back on every few days - then we'll know how far down we have gone! I pray that THAT day will never arrive.



aj


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## Ageo (25 October 2008)

Someone here showed me this site (cant remember) but i think its fantastic....

http://www.chrismartenson.com/crash-course/chapter-1-three-beliefs

Do yourselves a favour and go through the video chapters as he presents facts as they are.....

And it actually has everything to do with this topic


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## MR. (25 October 2008)

I have approx 3% shares. Had 97% cash and decided to juggle the property to be better off.  Might be caught?  Contract on second property (acre) just before Lehman Bro's bank **** itself. Don't know yet.  (I always worry) Intend to put alot in Govt Bonds and bank when I can see the sky again.  Waited 4 years for this to happen and still got caught a little in shares because one begins to believe to be wrong and have been left behind.  

Have to go ... Got open house now.


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## tech/a (25 October 2008)

> what have you done or doing to prepare for hard times?




Have been for sometime now.

(1) Stocks.
Day Trading only.Mixed results and the inability to short ASX stocks makes it pretty impossible to turn a profit. Many are trading US stocks short--haven't done so but even those who have are being belted if they are trading in AUD and not the greenback,so while they profit one way they lose the other.
Should be trading indexes currencies or futures short term but haven't had the time to setup---but these offer the ability to trade both ways short or longer term.Its a matter of setting yourself up for the continuing uncertainty in market condition. Without the ability to short your doomed to failure and poverty if this is where your $$s are.
For me its 90% on the sidelines with a few forays into day trading.Nothing to write home about with results.

(2) Property.
I have heavy interests in property.
Personal property portfolio,Property Development company and My core business is civil works which has a great deal of exposure to the property both commercial and domestic sectors.
*Personal property.*
Gearing was as high as 80% in 1999,now 35% having sold down to either freehold or slash exposure. 25% on fixed 7.7% and the rest on variable.
Building my own Esplanade ponderosa as we speak and happy that I locked prices here in December.Building cost have made the same project 20% dearer if signing now. Will be making 80% of my loan on the house tax deductible by selling an IP to my trust and funding part of the build,the PPOR will also be sold to fund the rest.  Rents are buoyant and with rates coming down will only get better for passive income.
* Property Developement*
On the side lines for last 2 yrs.But am currently stiring interest in high density build for low income flats or units,1 bedroom min 10 in a developement.Looking for land and doing the design work now for future projects.

*Core Business.*
In a strong position that we own our premisis and the larger majority of our machinery.We can downsize if necessary but this will only be resorted to if there are no options. I have excellent people who have commitments just like myself.
*Domestic* has pretty well fallen off a cliff.Price has become the most important factor where it was not long ago "Can you do it by---".
In small contract we have 60 odd competitors and equates to 15% of total business. I feel for the smaller guys who may be forced to compete with the few larger companies in this area if we need to increase market share. our buyng power and infrastructure can if necessary muscle them out. so far this is not in our management stratagy.
*Mid sized contracts* have deminished and again price is the governing factor.
These works equate to 30% of business and are deminishing,a test of 2 projects under negoitiation saw us successful based upon price alone so to hold market share price is being honed---not slashed--yet.
*Larger Civil works* By far the dominant source of business. Tenders are plentiful and the size of works are bigger than ever. Our secure rate is increasing.Price while important isnt the main factor. Ability to perfom,correct liciencing,and on site qualifications hold the edge. In this area we have 2 competitors and in past years we come up against interstate companies due to our in ability to service all tenders made available.

The management plan is to continue to increase market share. In our industry we believe we have around 5% and for clarity say the market is $100 million a year---we get $5 million. Lets say the market decreases 30% to 70 million. By increasing our Market share to 8% we still expand. this is the current thrust for the management team.

*My personal forward view is.*
*Trading*--- get in a position to trade both long and short the long term (5 yr) outlook is choppy with trends both ways and at times volitile. Allocate conservative funds.
*Property.*---look for dense housing project where all the figures add up--pre sell before construction. This is likely to become viable as interest rates plummet. I have 2 kids 26 and 22 I will be helping them into the property market quite possibly in the next 12 mths. both eligable for the $21K.
If they dont buy into one of my projects the likes of Devine Pioneer will do cart wheels to get business.
*Business*
There will be a sever down turn in areas.The world wont stop.
Market share increase is the thrust,pricing is ever the aspect under scrutiny---by us and by our clients--- we may even be taking on new staff.

So there you go in brief.


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## CanOz (25 October 2008)

My plan is to keep saving all of my income while i am still working in China. I'm lucky in that my expenses are paid here and i try to save as much as i can in both countries. I'll stay here for the rest of the downturn at least, maybe another 3-4 years.

I want to keep swing trading ASX and US Stocks, as well as my small FX account and just keep learning about the business of trading. 

My only concern at this stage is the AUD and the effect it has on my buying power in US Stocks and FX.

Cheers,


CanOz


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## MR. (26 October 2008)

Attachment 25114
from the first post didn't work so attached again now.


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## MR. (26 October 2008)

As it appears tech/a  should also remember it is all about being efficient re: the early 90’s.  Being efficient  and competitive got us through with some help of the “Buy Australian Made” campaign of the time in the early 90’s. This time around I chose not to buy a commercial property and tie up funds which will only make competitiveness less likely when taking the return on outlay into account with falling property prices as well.  But working from home is not professional and limits opportunities, but is the correct choice I believe.  

Tech/a,  hope you don’t mind my comment but you may be hit a bit harder than you think in your business.  Before any of your competitors bight the dust and/or hand over any market share they will really take profits to the bone.  I know I would, take the profit to the bone before rolling over, hoping for better days.  And more staff, more overheads and staff will still want $X when the jobs now pulls $Y.

Aussiejeff, Mr Burns, CanOz thanks for your response.  Canaussieuck  I think we all agree the  AUD  should be stronger than where it sits just now.    

Ageo posted:
http://www.chrismartenson.com/crash-...-three-beliefs

I am half way through and number 10 “inflation” is the number one killer which pushes money into higher risk investments (we all know this).  As I go through the video’s I want to know what the speaker has done with his investments. I believe it is at the end, well it better be!  Is it gold? (ready for the government perhaps one day to take it) or what about just “land” ??  For similar reasons as my purchase even just to grow food.  “It’s taking things to the extreme”  Look further ahead with high costs in transport, makes it harder to supply cities!
The link reminds me of “An nconvenient Truth”


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## tech/a (26 October 2008)

> Tech/a, hope you don’t mind my comment but you may be hit a bit harder than you think in your business. Before any of your competitors bight the dust and/or hand over any market share they will really take profits to the bone. I know I would, take the profit to the bone before rolling over, hoping for better days. And more staff, more overheads and staff will still want $X when the jobs now pulls $Y.




We will be and are the leaders in skinning those projects that fit our company and infrastructure best. We constantly maintain a 4-6mth forward project book.
You may well be correct,but unlike many we are well placed strategically,with a number of models in place or in position for implementation.

All comes to a screaming collapse for everyone if tenders dry up.
Not seen at this point.


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## Sean K (26 October 2008)

Now 30% super, 60% cash, 10% stocks (specs I couldn't sell)

Looking forward to an opportunity to get this cash burning a hole in my pocket into something else. 

Maybe a counselling service or funeral home...

Prepared for a bottom, or there abouts...

In the next 1-7 years or so.....


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## Santoro (26 October 2008)

MR. said:


> Ageo posted:
> http://www.chrismartenson.com/crash-...-three-beliefs




Well explained...perhaps it is an inconvenient truth.....I guess no one wants to really think about this cause its unbelievable..... too much financial pain ahead (for those that made real estate investments since 2000 and other investing) to want to give it any credibility... but more probable than not...

40% cash, 30% stocks, 30% gold


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## mayk (26 October 2008)

MR. said:


> Ageo posted:
> http://www.chrismartenson.com/crash-...-three-beliefs




Here is another documentary, perhaps one of the teachers of Chris Martenson?
Dr. Albert A. Bartlett's presentation on "Arithmetic, Population, and Energy." 
http://www.youtube.com/watch?v=F-QA2rkpBSY
http://www.youtube.com/watch?v=Pb3JI8F9LQQ
http://www.youtube.com/watch?v=CFyOw9IgtjY
http://www.youtube.com/watch?v=yQd-VGYX3-E
http://www.youtube.com/watch?v=t-X6EpvWWu8
http://www.youtube.com/watch?v=-3y7UlHdhAU
http://www.youtube.com/watch?v=RyseLQVpJEI
http://www.youtube.com/watch?v=VoiiVnQadwE


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## gfresh (26 October 2008)

Been preparing for 12 months probably now. Have paid off all debts or long-term obligations, taken most of my money out of stocks a few months ago without too much loss (thankfully), and keeping 98% of cash in bank deposits. 

At the moment putting 40% of my pay each week aside as savings. At worst I lose my job and may have to tap into this. If this doesn't look too likely as things get worse I will use it to buy shares at record lows, and a property or two when the time seems right. 

Keep reading as much as possible posted here and elsewhere to learn about everything financial, how it all works, and an attempt to see how things may play out. It's times like these you really see how the whole world economy ties together, and in a way, just how fragile the foundations it was all built upon. 

At the moment, a lot of friends, etc are a bit fearful, but have 'hope' that things will be alright, without much fact or evidence to back up that view. I'm not really a subscriber to that theory, best to prepare for the worst, if it doesn't happen, cool. If it does, at least I won't be in real pain like they will. 

Feel a certain sense of freedom being in the position I am now. Have been in debt when times have been tough for me, and boy can it lead to (mental) depression and bad thoughts. Have made sure I won't go there again.


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## Glen48 (26 October 2008)

Chris Martenson is now has Chapter 20 online.
What is the difference between a R E salesman and a Pizza??
A pizza can still feed a family of Four.


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## CanOz (26 October 2008)

Glen48 said:


> Chris Martenson is now has Chapter 20 online.
> What is the difference between a R E salesman and a Pizza??
> A pizza can still feed a family of Four.




I just finished the Chapter 20. 

Still a bit shell shocked after reading the last article in the thread about the Cat 5 financial hurricane...good grief what a mess we're in.

I would like to hold some physical GOLD. But i 'm not sure how to do this seeing as i'm in China...Faber reckons about 30% in physical.


What to do?


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## tech/a (26 October 2008)

> and keeping 98% of cash in bank deposits.




This is fine provided accounts arent frozen and or inflation becomes an issue---particularly hyper inflation. Then thats the worst you can do!


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## Pager (26 October 2008)

I'm sitting on cash mainly due to I'm a futures trader, only downer has been the falling $A as i have my account squared to Aussie every day, means for any contract i trade not in $A I'm actually having to trade fewer contracts so i'm becoming heavily reliant on the Australian markets which for me isn't ideal.

Not sure why there is a need to hold gold as if the sh#t really hits the fan, IMO that will go down in value as well as who the hell will have the cash to buy it from you 

I'm carrying on business as usual, when the cold war was on, there were more than a few who invested in fall out shelters and various other things to survive a nuclear war, couldn't see why and the same with this world problem if it gets so bad, money and our share/property portfolios will be the least of our problems.


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## sinner (26 October 2008)

Pager said:


> Not sure why there is a need to hold gold as if the sh#t really hits the fan, IMO that will go down in value as well as who the hell will have the cash to buy it from you




You are correct, if the economic apocalypse comes then nobody will be buying gold. 

Those I have seen holding are holding as a hedge against the massive currency debasement currently taking place in the US. I thought silver was supposed to be the defacto apocalypse currency anyway? You can't exactly break off a chunk of your troy ounce of gold but silver coins are relatively abundant and no government in the world can legislate gold or silver into existence (as opposed to several hundred billion dollars written in quicker than I could say bailout).

The US government stopped publishing M3 data a few years ago now but you can figure it out yourself using this rough equation from wiki

M3 = M2 + large time deposits, institutional money-market funds, short-term repurchase agreements, along with other larger liquid assets

A good friend of mine recently valued US M3 at approx 17 trillion.


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## Pager (26 October 2008)

tech/a said:


> This is fine provided accounts arent frozen and or inflation becomes an issue---particularly hyper inflation. Then thats the worst you can do!




seems to me it may well come down to a case of were will ones wealth be least eroded, were ever it goes its maybe going to be a negative return ?, cash, gold, property, bonds, stocks, all come with attached risk.


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## numbercruncher (26 October 2008)

In worst case scenario gold and silver as dictated by history become currency !

need not concern your self with what you can sell it for but what you can obtain with it - If an ounce of gold buys the same in a years time as it does today its a very cheap peace of mind kind of thing isnt it ? Its just money I guess .....

How long can these sneaky manipulative central bankers keep the masses enthralled by their created out of thin air dodgy fiat stuff anyways ?

My Gold investment has been a solid performer, paper money is just so .... fake and 20th centuary, time for a change !

And gold is just so pretty to boot !


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## theasxgorilla (26 October 2008)

tech/a said:


> This is fine provided accounts arent frozen and or inflation becomes an issue---*particularly hyper inflation. Then thats the worst you can do!*




Is it then better to get it into property in you opinion?

I also have cash and the need/opportunity to acquire another property rather soon (3-6 months...not in Aust).  Just wondering how big I should buy.  I think inflation is a big issue and will likely come well to the surface after all this crisis dust settles.


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## The Red Baron (27 October 2008)

Sure am preparing for the hard times.

Got myself a second job of 20hrs a week. Enough to pay the loan if the Full time job falls through.

Living at home with the olds, i'm 25. Was looking at moving at and renting my $250 a week better off at home. $50 a week board is better than $300 rent.

I also see this as an opportunity to put some hard work in. With the extra money not sure whether to reduce loan currently 8% interest only loan, open a First home saver account 17% interest tax free (4 yr catch but!) or maybe dollar averaging in a managed fund over the next few years. 

Just need to try balance everything out and do some research.

My Super have been hit pretty hard but got alot of working years ahead of me. Block of land is no doubt down a bit too. But if I sacrifice the holidays and work hard could be a few opportunites out there down the track.


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## tech/a (27 October 2008)

theasxgorilla said:


> Is it then better to get it into property in you opinion?
> 
> I also have cash and the need/opportunity to acquire another property rather soon (3-6 months...not in Aust).  Just wondering how big I should buy.  I think inflation is a big issue and will likely come well to the surface after all this crisis dust settles.





In a case of hyper inflation holding a tangible asset is all that can hedge you from the rampages of eroding cash levels.
As the cost of replacement just gets out of hand.
My personal view is to have atleast some hedging in case this unfolds.
So gearing down and holding.
Falling interest rates just place some cream on top in a period of minimum cream!


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## Pager (27 October 2008)

I'm no expert but thinking about it overnight, if inflation starts to become a serious problem particualy hyperinflation then being fully invested in possibly the share market may be the best option ?.

Particularly if you went for company's like WOW,WPL or any large company with a strong balance sheet and a product/service that we all need in our everyday lives.

For those with deeper pockets maybe buying a tenanted farm, unless of course you have expertise in that area then it may well come in handy


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## numbercruncher (27 October 2008)

If hyperinflation occurred those fully in debt at  fixed interest rate and invested in physical assets would benefit big time!


As for shares it would really depend on the entitys situation - a debt free company with loads of cash would see the purchasing power of that cash destroyed pretty fast I would tip ...... ya realy case by case stuff!


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## Spaghetti (27 October 2008)

My plan.

Cut down on what we spend, this has been easy once I actually sat down and reviewed expenditure. I mean we found we spent $1,000 a month on phone, internet, pay tv and wine. Pensioners live on that for everything so took the axe lol. Cannot quite stomach cask wine for some reason so maybe just have wine for a treat from now on. Now Telstra have announced 5gb for $90 per month for us stranded without land based broadband net access so that will be a massive saving.

Multiple income streams. 

We tried without success to secure any worthwhile work these last seven months. The most common knockback reason for me was too much experience in what I have done, so I am going to start my own part time business utilising these skills to  provide efficiency savings to local business.

Seasonal work.

We are working on inexpensive gifts for Christmas, Father Days etc This work is to be done when we are wasting time watching TV or doing nothing. We are going to work 60 hours a week no matter. If we get $5/hour then better than 0$ per hour.

Online income, Have some income from online work though no guarantee it will be ongoing, is a start and am looking at other ways to make money sitting on this computer each morning while I have my coffee.

Trading. Even though have not done much trading this year am studying to be quite expert in a few sectors and will focus only on them and not be influenced by hype in the future but rather on what I have thorough understanding of. Not sure this will be useful in the short term but at some stage I belive it will be valuable knowledge.

Dog trainer. Am considering becoming a dog trainer for basic commands once I  have figured out how to train my own dogs not to eat cane toads or protect me from little old ladies with walking frames. They think it is a weapon.

Entertainment. We left the rat race to work on the road for a while and we will do this again for one month a year to subsidise our annual holiday.

Our land. We live in the tropics and have some awesome fruit trees on our land. Instead of letting the fruit bats eat our crop we will actually start harvesting as yield can be substantial. We also plan to plant some trees that fetch premium prices when they are a few years old.

Motor vehicle. We are going to offer driving service so we can cover some of our motor vehicle expenses. We do not want too much work as adds to kilometer reading but a little bit to cover insurance etc. Not sure if this will be viable, still researching but am determined to make this expensive investment help pay for itself in some way.

So basically using our assets to gain income be it the house, car, skills, land, computer etc. I have have about 30 plan B's and actually feel excited about being involved in many different projects. Better than going for job interview after job interview and being knocked back and then wallowing in self pity. Important to have plans and goals and be employed. Then if you do fail no regrets as you did your best.


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## Spaghetti (27 October 2008)

Sorry, did not realise I wrote so much.

Plan C, stop waffling lol


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## numbercruncher (27 October 2008)

> Now Telstra have announced 5gb for $90




Im with Virgin its only 39 a month for 5gb including paying off the Modem ( they use the optus network )


Sometimes I wonder how Telstra manages to get customers!


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## Spaghetti (27 October 2008)

Yes noticed Optus have a deal now also. Just do not know how it works. I know when I had virgin mobile could not get a signal in some areas whereas could with telstra mobile. As it is now only get very low signal most of the time and spend half my life walking around trying to get better reception. Reminds me of when I was a kid with TV airiel. If I moved a kilometre away I cold get the same bundles as most of civilisation is offfered, am in some sort of telecommunication bermuda triangle though.


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## theasxgorilla (27 October 2008)

numbercruncher said:


> If hyperinflation occurred those fully in debt at  fixed interest rate and invested in physical assets would benefit big time!




Yeah, exactly why I asked the question.  Wondering if I can buy a quality property for 10-20% of it's '07 price highs, should I leverage to the hilt* if I can also secure 10 years at sub-5%.

*That would be my version of the hilt, since I never leverage to the hilt because I'm a great big chicken.


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## Pairs Trader (27 October 2008)

A lot of the time when hard times hit thats the best time to build a base so when the good times return and they will, you will be best postioned. Just my humble opinion.


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## MR. (29 October 2008)

Our debt “The Australian debts” are held by consumers (not government) and who holds these debts? Banks.... and the risk "their depositors" (However, the Australian government now guarantees the banks) Had to follow other parts of the world in their lead, had little choice....

Government bonds still have priority over banks for me.  

Leveraged investors, investing in leveraged companies, selling to leveraged consumers.... ummmm

I guess if one waits long enough one will always be right. Where did most of "our" debt originate? Property. Either direct or from its equity.

Once our home sells we will hold Government Bonds (if possible) and cash for now.  Will invest holdings in property and some shares but not yet. Perhaps that will be "still" years away.


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## MR. (16 November 2008)

MR. said:


> Have not sold original house yet.  Should have done the transition sooner than now but it took some time to find the right acre.  But I still think its not too late to sell and it is on the market now. However I am expecting some decrease from all the media down grading property.




Still have not sold original house.  Have to take approx 20-25% lose to sell. (water front)  Should just do it and move on.  If I do interest rate cuts will encourage buyers back.  Just my luck of late.

Also Ill add to this thread hairdressing from home by my wife.


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## numbercruncher (16 November 2008)

MR. said:


> Still have not sold original house.  Have to take approx 20-25% lose to sell. (water front)  Should just do it and move on.  If I do interest rate cuts will encourage buyers back.  Just my luck of late.
> 
> Also Ill add to this thread hairdressing from home by my wife.




If you sell you property you will lose 25%?

How long have you had it?


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## BradK (16 November 2008)

theasxgorilla said:


> Yeah, exactly why I asked the question.  Wondering if I can buy a quality property for 10-20% of it's '07 price highs, should I leverage to the hilt* if I can also secure 10 years at sub-5%.
> 
> *That would be my version of the hilt, since I never leverage to the hilt because I'm a great big chicken.




In Feb or March 2009, I will be locking for 7 years, hopefully in the mid-6%.


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## MR. (16 November 2008)

numbercruncher said:


> If you sell you property you will lose 25%?
> 
> How long have you had it?




By a lose I mean the difference between what agents valued the property 2 months ago compared to the best offer now.  It is still above what we have paid. (It has kept up with inflation but not by much.)  Its hard not to look at it as a lose.  Bought land 2001 and built new house 2004.  The 20 year old larger house next door 3-4 months ago sold for above the figure the agents put on our house 2 months ago.  "Everything" of ours is new and "good quality".

Tech/a claimed building costs keep going up.  Our experience buyers don't care when it comes to sell.  

It just takes one house in the street to sell for a high price and then everyone else expects the same.  
Ofcoarse as we know, just like shares, it is not the case.


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## nunthewiser (16 November 2008)

MR. said:


> By a lose I mean the difference between what agents valued the property 2 months ago compared to the best offer now.  It is still above what we have paid. (It has kept up with inflation but not by much.)  Its hard not to look at it as a lose.  Bought land 2001 and built new house 2004.  The 20 year old larger house next door 3-4 months ago sold for above the figure the agents put on our house 2 months ago.  "Everything" of ours is new and "good quality".
> 
> Tech/a claimed building costs keep going up.  Our experience buyers don't care when it comes to sell.
> 
> ...




dont take aN agents valuation with anything but a grain of salt usually .they want your listing and happy to P in ya pocket up until you sign on the dotted line

your house is ONLY worth what a buyer will pay for it , nothing more nothing less

2 months isnt a long time on the market m8 , your call , all depends on your circumstances etc .

good luck with it


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## MR. (16 November 2008)

nunthewiser said:


> dont take aN agents valuation with anything but a grain of salt usually .they want your listing and happy to P in ya pocket up until you sign on the dotted line
> 
> your house is ONLY worth what a buyer will pay for it , nothing more nothing less
> 
> ...




Did expect say a 10% lose over agent's valuation.  So maybe lose is approx' 15%.  Two months is not a long time, agree.  Hard to see just how things will get better.  Still get 5-8 couples through each open house.  But almost everyone is looking.  The main circumstance to consider is "high end price bracket"


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## Glen48 (16 November 2008)

As I have said before have a look *Patrick.Net  * and see what is going on in USA and what will happen here will be the same.
Like shares sell high, buy low you just have to wait a few more years for housing to come down.


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## Smurf1976 (16 November 2008)

I organise my finances pretty carefully when it comes to discretionary spending like holidays etc. I've got a separate account and put a set amount away each fortnight - if there's not enough in the account to pay for it then no holidays. 

I was about to organise a trip interstate for a week or so next year. Then I thought about the overall economic situation and, whilst I do have the cash to pay for the holiday, I've decided I'm better off keeping that cash "just in case". So no expensive holidays for me, I'll be going bushwalking instead - something that costs close to zero.

Classic recessionary psychology and it's embedded in my mind quite firmly it would seem. Uncertain times so I'll hold onto the cash unless it really is a necessary purchase. I doubt I'm the only one thinking that way.


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## prawn_86 (16 November 2008)

My preperation at this stage involves assessing different study options for postgrad stuff, as i am less confident of finding a job in finance when i graduate at the end of next year.


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## Glen48 (16 November 2008)

16/11/2008 


The federal government has bought its first tranche of *troubled residential* mortgage-backed securities (RMBS), in a bid to boost competition in the non-bank home lending market.

The Australian Office of Financial Management (AOFM) bought $500 million of RMBS from privately owned mortgage lender FirstMac.

The remaining $100 million of the $600 million bond offer was taken up by private investors.

In September, Treasurer Wayne Swan gave the AOFM the authority to buy $8 billion in RMBS to ease credit shortages in the non-banking credit market.

FirstMac chief financial officer James Austin said the federal government purchase of the mortgage securities would help boost competition in the non-banking sector.

"The main benefit will be that it will allow more funding to be provided for mortgages," he said.

"FirstMac relies 100 per cent on the securities market.

"Over the past 12 months these markets have been closed."

In the wake of the credit crisis, the banks have consolidated their hold on Australia's home lending market as higher funding costs pushed non-bank lenders out of the market.
How can there be such a thing a mortgage backed *Security*??
who decides what is safe and this is why we are in this mess.?


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## MrBurns (16 November 2008)

Glen48 said:


> who decides what is safe and this is why we are in this mess.?




The G20 meeting is just poititians all trying to out BS each other , with ours grinning and soaking up yet another overseas trip to pose at and do nothing but run off at the mouth.

This wont be fixed by Rudd or any more "rescue packages" they just have to let it go and fix itself.

$10.5 B would have been better spent by dividing it amongst the Salvos and the Smith Family.


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## numbercruncher (16 November 2008)

I dont think all that 10.5b will be used up , the FHBs still arnt buying into the ponzi scheme so that money will just go back to the coffers .....

The thousands they are giving to each family will probably pay down debt or go to savings do very little for the economy ....

So im expecting some other kind of package soon ...


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## robots (16 November 2008)

MrBurns said:


> The G20 meeting is just poititians all trying to out BS each other , with ours grinning and soaking up yet another overseas trip to pose at and do nothing but run off at the mouth.
> 
> This wont be fixed by Rudd or any more "rescue packages" they just have to let it go and fix itself.
> 
> *$10.5 B would have been better spent by dividing it amongst the Salvos and the Smith Family*.




hello,

wow, the bums can keep bumming on, yeah fantastic 

thankyou
robots


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## nunthewiser (16 November 2008)

why does the village ppl song .Y.M.C.A keep popping up in my mind 

am i warped ?

do i need a better investment strategy?

do i need to sell everything and buy a police uniform?


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## chops_a_must (16 November 2008)

robots said:


> hello,
> 
> wow, the bums can keep bumming on, yeah fantastic
> 
> ...




You might want to be careful who you call a bum there Robots, you bum:



> Workers and home owners are 'new' poor
> 
> 12:00a.m. 27th October 2008
> 
> ...




:


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## robots (16 November 2008)

hello,

i better get out the front of Coles-Prahran in the morning asking for a dollar or a smoke, 

got an old pair of dunlop volley's in the cupboard i will rub some dirt on them

lot of professionals out there

thankyou
robots


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## numbercruncher (16 November 2008)

Might be good practice Robi - construction workers getting axed left and right I see .... and unfortunately some comments from you have bought a cloud of bad karma your way, im hoping it doesnt rain on you brother ....


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## robots (16 November 2008)

hello,

yes i am finished, 

just go and hit the folks up for a few dollars if job ends, they should be able to help out their youngest

thankyou
robots


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## MrBurns (16 November 2008)

chops_a_must said:


> You might want to be careful who you call a bum there Robots, you bum:
> 
> 
> 
> :




Was he calling me a bum ? 
To be honest I couldn't make head or tail of the robots code.

Back to the real world and I see Bush has said that the USA is perhaps facing the biggest *DEPRESSION* in it's history but that should go right over the heads of the property bulls , buy up boys nows your chance !


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