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2005 and Beyond:The BEAR is BACK?

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reichstag911

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FREE - FREE - FREE

DT March Long Term Report - 2005 and Beyond.

https://www.dynamictraders.com/PDFStore/main.asp

This critically important 67 page report is free.

STOCK MARKET: The 2005 high should be complete by the first week in April if not already complete the first week in March.

INTEREST RATES have begun a six year or longer trend up to double digits.

PRECIOUS METALS AND MINING STOCKS should resume their bear trend this month and into next year.

REAL ESTATE should be in serious trouble over the next few years.

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In other words the fallout from 2000 that was temporarily halted by Greenspanner could now be around the corner.

**I have no affiliation with www.dynamictraders.com**

BTW i'm still bullish on the USD.

http://finance.groups.yahoo.com/group/investorsexchange

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Re: 2005 and Beyond:The BEAR is BACK ?

Is that you Simon?

It's a great report...a love a good bearish report.

Cheers
 
Re: 2005 and Beyond:The BEAR is BACK ?

Ah doom and gloom.

A seriously bullish indicator.

"Property Investor" Mag has article stating that leading lenders see the return of upward realestate pricing in 2005/6

When it turns bearish we will know.
Right now its bullish so thats the way it should be traded.

Have appropriate risk minimisation in place and enjoy the ride.
A loss in a market turn will be an inevitable cost of doing business!
 
Re: 2005 and Beyond:The BEAR is BACK ?

tech/a said:
Ah doom and gloom.

A seriously bullish indicator.

"Property Investor" Mag has article stating that leading lenders see the return of upward realestate pricing in 2005/6

When it turns bearish we will know.
Right now its bullish so thats the way it should be traded.

Have appropriate risk minimisation in place and enjoy the ride.
A loss in a market turn will be an inevitable cost of doing business!
Click to expand...

It's only bullish when EVERYBODY is bearish :)

But you are right, trade the direction of the trend. ASX is in full bull mode. But I continue to make the most money on shorts in the US.

Go figure.
 
Re: 2005 and Beyond:The BEAR is BACK ?

Wayne.

2 vastly different economies and Ill bet your doing very well.

Lots of liquidity and plenty to short and when they fall they drop.

What are you shorting stock or??

Who through and how much each side?

OR are you selling calls/both?

If calls how far out?
 
Re: 2005 and Beyond:The BEAR is BACK ?

tech/a said:
Wayne.

2 vastly different economies and Ill bet your doing very well.

Lots of liquidity and plenty to short and when they fall they drop.

What are you shorting stock or??

Who through and how much each side?

OR are you selling calls/both?

If calls how far out?
Click to expand...

Tech,

Typical sort of chart I'm trading is EBAY below...

First short trade was a defensive synthetic backspread from the double top...unfortunately closed the trade before the gap...but I was still deliriously happy with it.

Second trade was a near dated bear vertical from the beginning of this month which expired with maximum profit.

Liquidity is huge so you can trade as many contacts as you want.

I never sell calls unless a part of an option spread. i.e. no naked or covered calls (unless on bottom drawer stock).

I like taking near dated spreads on stocks with relatively high IVs. The payoff diagram is similar to longer dated spreads on stocks with low IVs.

Cheers
 

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Re: 2005 and Beyond:The BEAR is BACK ?

"Property Investor" Mag has article stating that leading lenders see the return of upward realestate pricing in 2005/6"

And the significance of this is ?

//////////////////////////////////////////////////////////////////

( hi wayne :p )
 
Re: 2005 and Beyond:The BEAR is BACK ?

reichstag911 said:
"Property Investor" Mag has article stating that leading lenders see the return of upward realestate pricing in 2005/6"

And the significance of this is ?

//////////////////////////////////////////////////////////////////

( hi wayne :p )
Click to expand...


I dont believe realestate is in serious trouble and dont seem to be alone in that veiw.
 
Re: 2005 and Beyond:The BEAR is BACK ?

tech/a said:
I dont believe realestate is in serious trouble and dont seem to be alone in that veiw.
Click to expand...

It will be when we get the deflationary depression : )
 
Re: 2005 and Beyond:The BEAR is BACK ?

Yes the housing market is in serious troubles...those who bought into the housing market within the last year, buying units/townhouses close to CBD capital cities have lost tens of thousands of dollars. Many people also bought into the market on 100% finance, offered by some banks/finance companies,since then property prices have fallen and they now owe more money than the price of their property.

Most homebuyers have been tempted to take up new products offered by banks and re-draw off their morgates to record amounts. Australia problem/obbession with credit is stripping profits away from the housing market and placing this into big-screen tv's,furniture,holidays etc. What they are left with is a house that is worth the same amount as the debt that they have borrowed. Now that the housing market is in a flat/downward period and the cost to service this loan will increase with intersest rate rises, it will only leed to one thing. CRISIS!
 
Re: 2005 and Beyond:The BEAR is BACK ?

Kris

Your describing a minority in my veiw.But sure they are there.

I bought a property 16 mths ago and have developed it with a 50% gain.
I hold 8 others, bought from 97 to 2002.

Property investors who have initially increased their good debt(income producing growing assets) only to then increase their bad debt (depreciating liabilities),arent investors at all.

While there is a great deal of education --sales of various products--there isnt satisfactory educatoin in the use of those products or infact in the art of investment,where one works toward a passive debt free income.

There are still great opportunities out there and some can still invest with confidence while placing risk management stratagies in place to buffer doom case scenarios.
There are always doom and gloom stories,if everyone (well actually 90 % of the population are) stuck their heads in the sand everytime one is bought up,there would be no financially secure!!

Do you really think that even with interest rates at 12% that ALL opportunities would disappear?
8% is CHEAP!

tech
 
Re: 2005 and Beyond:The BEAR is BACK ?

tech/a said:
Do you really think that even with interest rates at 12% that ALL opportunities would disappear?
8% is CHEAP!
tech
Click to expand...
Very good point! Present interest rates are REALLY cheap.

However, according to a former (left the industry about 12 months ago) real estate agent I know, practically NOBODY was considering interest rate rises of more than perhaps 0.5% and most weren't even considering that. Many people were really struggling financially to afford rates that were 0.75% lower than they are today.

A recent media report suggested that 41% of Australians were "under financial pressure" following the recent interest rate rise.

Seems like a lot of forced sales are on the way so rents ought to go up, property prices down.

From my conversations with real estate agents and through various forums, the state of the local (Hobart) market seems to be as follows. Seems to be much the same elsewhere (even overseas) too although there are exceptions. (I'm looking to buy in the next 18 months or so, hence the interest.)

1. Top end of the market is dead. It's gone. It was booming but that finished quite a while ago.

2. Overall sales are down around 50% over the past 18 months. Volume has dried up and it is not improving.

3. The level of buyer interest is down even more than sales - the days of numerous competing offers on a property are gone.

4. In 2003 houses were selling at or above the top of the quoted price range, now the bottom of the range is effectively the maximum anyone will pay.

5. The mainstream media is turning bearish on real estate for the first time in a very long time.

6. First home buyers are simply not buying. They can not, will not, even consider making an offer at present prices. There is thus a break in the "chain" of property transactions which makes it impossible to move up the "ladder" since nobody will buy what you have to sell.

7. I found several long term (months) empty properties in my immediate area. Some have been empty 6 months or more. They are still for sale with some now being "for sale or lease". Not a good sign in my opinion.

8. There are an increasing number of empty properties as those who are forced to sell (due to moving for work etc) simply can not sell at the price they were expecting.

9. Sellers are in denial about the market. They will not readily accept the prices buyers are offering. The gap seems to be quite large with buyers unable to move - they simply can not pay more so the sellers must either lower the price or not sell. Most are choosing the latter option at the present time.

10. Most auctions are failing. Private treaty sales following a failed auction are counted as a successful auction sale but even that leaves a failure rate approaching 60% in many areas of Australia.

11. Those sellers that are aware of the market are offering 4 bedroom properties below what most expect for 3 bedrooms. Offering brick below what those in denial expect for weatherboard. Those sellers who are willing to accept lower prices are still having great difficulty selling, if they can sell at all.

12. Overall, both ends of the market are in trouble - volume is dead. Due to the reliance on median averages for statistics and becuase there are still some sales, mostly in the middle price ranges, the statistics have not shown much change.

13. Real estate agents are increasingly under financial pressure due to the lack of sales. If "talking up" the market does not produce results then there is a need to find another means. In peactice, this appears to involve "conditioning" sellers to accept lower prices to get the market moving again.

14. A concept known as "gazundering" seems to be starting to appear. It is the reverse of "gazumping". Success of the method relies upon a general lack of buyers which is not a good sign of the market. (Mostly overseas and mainland states, doesn't seem to be happening locally.)

15. Banks are tightening credit with the maximum they will lend based upon a given income level having been lowered in may cases. This reduces the upper limit that buyers can pay with many buyers now literally locked out of the market unless prices fall.

16. At the present time rent is lower than the interest on a mortgage. If you add in the repayments, council rates, insurance etc. then the cash outlay of
renting is less than half that of buying.

17. Large unit developments in Melbourne especially are unoccupied to the point where developers pay people to draw curtains and switch on lights at night to create false impressions of occupancy.

So there you have it, the results of my real estate research. In short, it seems that there are very few who are able and willing to buy at present prices with increasing numbers simply unable to buy even on above average incomes. There is an increasing stock of empty properties.

Judge for yourself but I will not be buying property under the present circumstances. It might make sense for you, we are all in different situations, but it does not make sense for me.
 
Re: 2005 and Beyond:The BEAR is BACK ?

Smurf1976 said:
So there you have it, the results of my real estate research. In short, it seems that there are very few who are able and willing to buy at present prices with increasing numbers simply unable to buy even on above average incomes. There is an increasing stock of empty properties.
Click to expand...

Smurf.
There in lies an opportunity does it not?
Where do they or will they live?

I agree that property isnt for everyone and nor is trading.
Infact serious wealth creation is beyond 95% of people as statistics tell us only 10% will retire without government assistance.

In all seriousness why do you or anyone else think this is the case? That 95% wont ever be financially free.

I personally think that THE reason is that the large majority dont have the ability to recognise an opportunity when its presented to them.
Further those in the 95% that DO recognise an opportunity dont have the COURAGE to take advantage of it!
 
Re: 2005 and Beyond:The BEAR is BACK ?

tech/a said:
Smurf.
There in lies an opportunity does it not?
Where do they or will they live?
Click to expand...
I do agree with your point there Tech/a, my point was that the property opportunity is not in owning lots of property in the hope of capital gain as the odds seem to be against that one. As you point out, the masses don't generally do too well financially but they are invested in property to the limit right now which I think says it all.

Of course the fact that the masses are in property, prices are high and interest rates are low means that there will at some point in the future be a good opportunity to buy property, just not right now. If we do end up with lots of forced sales in a worst case scenario then that's the perfect buying opportunity.

On the subject of buying opportunities, take a look at the US Dollar if you are into currencies. Classic sign of a bottom when everybody "knows" that it's headed into oblivion and even TV presenters joke about it. Also, I'm long term ultra bullish on oil but must point out the increasing physical stock levels right now and that just about everybody suddenly has an interest in the price of crude oil.

Apart from the obvious property opportunities like removalists benefiting from more renters, security firms and gardeners benefiting from empty homes and so on a real opportunity would seem to be a carry trade involving rental property.

Without commenting on the actual market here, let's just assume that you expect rents to rise due to increased demand. Go and sign long term leases on a large number of properties with the cost fixed (try and scare the owners about a real estate crash) or indexed to CPI at worst. Then go and rent them out with 6 monthly rent reviews. Assuming that rents do increase above CPI you ought to make a rather nice profit.

Lots of opportunities, just not where the masses are.
 
Re: 2005 and Beyond:The BEAR is BACK ?

Smurf1976 said:
On the subject of buying opportunities, take a look at the US Dollar if you are into currencies. Classic sign of a bottom when everybody "knows" that it's headed into oblivion and even TV presenters joke about it.
Click to expand...

Yep couldn't agree more - i've been USD bullish since Nov 04 and from a TA perspective (which is all i do ) it's going to have a choppy rally for some time...

Cheers.
 
Re: 2005 and Beyond:The BEAR is BACK ?

My preditcion is that many of the baby-boomers over the next few years will be selling their investment properties and cashing in their super accounts to retire into a retirement village unit. Hence the reason why I have bought my slice of the action in L.V. Living Limited (LVL)
 

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