How do you remember the GFC?

[Tyler Durden]

Although I had a small amount of shares at the time, I had pretty much forgotten about them even when the GFC was happening. It's only now when I look at the charts for Tabcorp that I realise they pretty much halved at that time.

So because I wasn't too interested in the markets back then, and because I'm interested now, just curious to see how you remembered the GFC? Was it like a one day thing where everything on the market suddenly went down, or was it more of a gradual thing? Did you take any action during the GFC< or did you stay put?

 

[Bill M]

It was the best buying opportunity of a lifetime and I was buying. Here is what I wrote in March 2009 and I bought everything listed:

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Plenty of good news around for non gloom and doomers. Currently there are plenty of share purchase plans around for those long term holders. Time to get involved if you can.

WES offered at $13.50, today $17.50.......kerchinck!

WBC offered at at $16 wound down to $15.24 and now $16.87.....kerchinck!

CBA offered at $26 todays price $28.61................kerchinck!

next

IAG.......offered at $3 but wait we still have time. Current price $3.22

Plenty of opportunities to make money if you keep your wits about you.

Link Here
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[1q2w3e4r]

As Bill said, a great buying opportunity.

 

[Knobby22]

Well I sold but bought back too quickly and I know others who waited too long.

It was scary, the world came a bit close to depression for my liking.

 

[LifeChoices]

I was buying and selling a fair bit in the two years leading up to the GFC and was doing really well - surprise surprise.

For me the GFC was a gradual thing, I could see something was coming - cause the market seemed so nuts at the time, and everyone was making money. The property market just seemed crazy and every bet I placed won.

When I realized what was happening, it was too late, I became greedy and had a few punts on some very volitile stocks, that went sour and eventually I had no play money left so I did nothing and just lost interest in the whole thing. Luckily, I held a few good stocks so I'm just coming back into play now.

If I was to draw an analogy between my favorite pastime - surfing. Day trading, for me, was like being caught on the inside when a huge set of waves come through. I just duck dived, pulled in my board and waited till it was safe to paddle out to the back again.

I really envy people who managed to scrape a living through 2009 and 2010 riding the share market.

 

[medicowallet]

It was good for me.

First shock, ok was too slow to see that coming. Got hammered a bit.

Then there was a graph in the paper which had the subprime loans which were going to mature over the next couple of years. This was very scary. (think it was the fin review)

Talked to some stockbroker friends who said that China would keep us out of anything further. On that note, I sold. (stock brokers = real estate agents)

Purchased a little late in the upswing.

At the moment, about 10% above pre-GFC levels, so quite happy with my conservative approach.

Problem is that I had to pay CGT on my sales, so probably just even now, with a higher purchase price meaning less CGT in the future.... if I ever sell.

 

[tothemax6]

Had very little effect on ttm6s camp.
Apparently the world was falling over, and yet it made no material change to my position or my environment whatsoever.

It did, however, get me into economics, and the politics of economics. Prior to that my interest had been in the social aspects of politics. This new interest in economics eventually brought me to practical application (forex, stock), which in turn eventually brought me to this forum .

 

[burglar]

As Bill said, a great buying opportunity.

Thought that too!

I wanted to build big numbers of shares in one company.
Picked the wrong company, didn't I!!
Nursing a deficit, which is diminishing,
due to assistance from several ASF'ers!

Happy !! For the moment.

 

[BigLeon]

My strongest memory was of my colleagues (some of whom were in their 50s) moaning they'd lost half their super. They still whine about it

Most of them took it pretty well, but what made me mad were the few who had an expectation of 14% annual returns year in year out. No return without risk!

 

[LifeChoices]

Had very little effect on ttm6s camp.

Just wondering, why do you refer to yourself in the third person?

 

[Tyler Durden]

My strongest memory was of my colleagues (some of whom were in their 50s) moaning they'd lost half their super. They still whine about it

Most of them took it pretty well, but what made me mad were the few who had an expectation of 14% annual returns year in year out. No return without risk!

I really don't know too much about super, but isn't the point of it to keep the money in better hands so that we would all be better off in retirement? If our super is going to depend on the share market (and I recently changed my strategy to cash and bonds) then why don't I just invest the money directly myself, or have the government force us to put it into a savings account where we can't withdraw until we're 65??

Hearing about what happened to your friends in their 50's just makes me mad.

 

[Julia]

Although I had a small amount of shares at the time, I had pretty much forgotten about them even when the GFC was happening. It's only now when I look at the charts for Tabcorp that I realise they pretty much halved at that time.

As did many shares.

Was it like a one day thing where everything on the market suddenly went down, or was it more of a gradual thing? Did you take any action during the GFC< or did you stay put?

Obviously it was a gradual event with many signs available before markets went south strongly.
Completely different from, eg, 1987.

It was the best buying opportunity of a lifetime and I was buying. Here is what I wrote in March 2009 and I bought everything listed:

Bill, my apologies if I appear to be singling out your post to which to reply. What you say is echoed by others.

Given the market had fallen so drastically by your March 09 buy in point and the first signs of a return to an uptrend had emerged, that seems really sensible.

But what I'm wondering, and what I think goes to the OP's original question, is what did you do before and during the descent?

If you bought heavily in March 09, had you been sitting largely in cash during the downturn, having sold when the GFC hit or soon after, or do you always keep very substantial cash reserves ready for a buying opportunity?

If you had been substantially in cash prior to the GFC then surely you'd have missed all those profits on the way up?

I don't mean to be intrusive in terms of what you personally do, but am interested in the positions of all those who said they bought so heavily at the bottom.
Perhaps you have all just omitted to say that you sold around the peak of the market at November 07 or soon after?

Again, I'm hoping for responses from any of the several who have said they bought up large at the bottom, not just Bill.
i.e. did you sell when the bottom began to fall out of the market, or hold your existing stocks and just buy more because you had a substantial cash reserve sitting waiting?

It was scary, the world came a bit close to depression for my liking.

I agree. I felt likewise. Am still unconvinced as to any genuine basis for so called recovery. There is no real foundation for optimism imo.

 

[burglar]

... But what I'm wondering, and what I think goes to the OP's original question, is what did you do before and during the descent?

I remember being alone ... daunted ... disoriented.

 

[basilio]

I thought a very large part of the financial world was completely crackers from 2004 onwards. In particular it seemed absolutely clear that the American housing market was based on a total lie with the ever increasing housing debts and plenty of evidence that much of the "prosperity" in America (and elsewhere) was based on debt that was unlikely to be ever repaid.

I thought there was a real chance we would have an extremely severe depression and (like Julia) I'm unconvinced about the current recovery. It seems to me that much of the private unpayable business debt has been taken over as public debt which also looks unpayable. That won't be a good look for any economic system.

On the other hand... I also see real problems in future energy supplies and thus opportunities in energy stocks. But of course if everything comes unstuck even the strongest companies will fail.

_________________________________________

With regard to what I actually did during the long crash. I was actually lucky enough to pick up a couple of stocks via ASF members. PES did well as did BRM . For a fair time BRM was trading at well below it's cash in the bank value with no regard for its iron ore holdings. I also took a position in LNC for the long term and that has been worthwhile. Almost all the shorter term trades have been fizzers....

I suspect that if things turn ugly again we will get a nonoseconds notice..

 

[IFocus]

The things I remember about the GFC (this is 2007-2008) were

People caught on the wrong side of the market and screaming in a world of pain.

People still pricing stocks based on valuations (in a bear market you always price on risk which generally means selling and getting short)

Arguments about if the index would reach 4800........

My own fears about Australian bank liquidity and exposure to US bank collapse (don't care what anyone says it was sheer dumb luck one of the big 4 here didn't fall over.)

My fears about holding my trading account in the US with IB and if settlements would some how fail.

I thought long and hard about buying gold.

Ken Henry acting in front of the curve, go house holds go early and go hard.

Oh and the fallacy mining saved Australia, mining shed 19% of its work force with mines closing left right and center if retail had done the same we were dead.

To some extent the GFC is still with us as sovereigns finance severe dept problems with more dept, surely there's a serious war in there some where?

 

[youngone]

Nothing..Although it would have been fun to watch the market.
I missed out the big historical event!! although, I do get this eerie feeling that a GFC is hitting town in 2012. Lets hope I'm wrong

 

[So_Cynical]

I remember my portfolio getting smashed, i remember buying into both SUN and MRE way to early (on the way down though well of their highs) i remember not selling TRY when the SP broke $4 briefly in Jan 08 (5K in profit lost) lucky for me that the gold stocks bottomed early (late 08) and i had the money to take a big average down into LGL.

• BUY Contract Note *******, LGL (#### @ 3.12) 26/07/2007
• BUY Contract Note *******, LGL (#### @ 2.10) 12/08/2008
• SELL Contract Note ********, LGL (#### @ 2.850) 23/12/2008
• Trade Confirmation: SELL #### LGL @ 3.600000 on Account ******* 19/02/2009

The above and selling my small holding of IAU in Feb 2009 left me with 15K right at the bottom of the market and trading with a strategy for the very first time.

i put about 1K into SUN and 2K into ENE just to bring my average price down thinking i was gona be holding those 2 for a while ...and put 10K into CPU for a quick 10% profit then brought ILU for 2.90 and VRL for 82 cents.

Not long after PFL for 0.69 with recycled funds from the ILU and VRL part profit takes (low cost averaging) having the balls to take the big average down into LGL...every last cent i had, saved my bacon - saved my life maybe, the LGL average down, and when i did it tuned out to be a massive turning point in my life.

 

[nioka]

Best thing that has ever happened investment wise as far as I have seen. My dam was half full when others were half empty and the lemmings hit the cliff. Great buys, probably the best were CER, a million at just over 2.6c., ADI, AUT and EKA at 5 and 6c, etc. as stops were hit and high leverage investors were punished.

Bring on the next one.

 

[explod]

Was all a bit of a blur to me. At the time I was found to have aggressive prostate cancer and had the worst operation and time of my life. Very much better thanks and rid of it now.

Probably why I may have appeared a bit dopey on the Forum. However the discussions in some ways helped to keep me alive.

The thing that has stuck is my search for the fundamantal reasons for it and a belief that we are in deeper than we were before it occurred.

 

[Bill M]

Bill, my apologies if I appear to be singling out your post to which to reply. What you say is echoed by others.

Given the market had fallen so drastically by your March 09 buy in point and the first signs of a return to an uptrend had emerged, that seems really sensible.

But what I'm wondering, and what I think goes to the OP's original question, is what did you do before and during the descent?

Not a lot, I had a big portfolio happening and just stood by but in January 2008 I took a massive hit in one day. The next day it came back about 80%. I was kind of shell shocked with that volatility. No Buffetts, no newsletters, no nothing can prepare you for that but I hung on. Throughout 2008 there were many more ups and downs and as we know more downs. My thinking started to change, I had quite a few property trusts still well in the green at that time and I sold them all ruthlessly. I think from memory WDC was sold at $17.50 and DEXUS at $1.50 and IOF at $1.20, all good prices back then. Then at that point I had a huge pile of cash and I sat tight. In the mean time I put one of my super account into the "Capital Stable" account.

I did not by any means pick the top but I stopped some of the catastrophe that was to come. The banks and all my other stocks I held.

I had that cash from the property trusts. Then all the banks, wesfarmers, IAG and a few others had share purchase plans. It was almost near the bottom of the sharemarket when these fools did this. Buying when blood is running on the streets was my life long ambition, I did not want to miss it. I was waiting for this for 24 years, since 87. I was going to buy on market but with the various share purchase plans at a discount only a fool wouldn't buy. It was my chance to top up very heavily and I did. The rest is history, they all doubled over the course of the next year.

Then I decided I wanted to buy this house where I am living at around OCT 09, I sold half of all my bank stocks and all of my dogs (except Telstra)from the past in order to buy my house cash. This time I got lucky as I sold some dogs like GFF at $1.69 (now only $1.16) and IAG. The biggest loss was the top dog Tabcorp...... when the Vic Government pulled the licenses that was it, it was never to recover.

So today I have gone conservative, have an investment unit that I get rent from and I hold a lot of hybrids/preference shares/floating rate notes. These are not so volatile and pay very good interest, I don't need to worry about them. I sold some banks as I mentioned but they all dipped again and I repurchased them. I also hold various ETF's as I bought them all at reasonable prices too.

If you bought heavily in March 09, had you been sitting largely in cash during the downturn, having sold when the GFC hit or soon after, or do you always keep very substantial cash reserves ready for a buying opportunity?

I had some cash but not enough to make a difference, the sale of all my property trusts topped the cash up for purchases later.

I learned a very big lesson from the GFC, the most important is that I don't know when to sell, this is my downfall. If I didn't sell those property trusts I would have been in the doggy poop now and still behind with my portfolio. I know very well when to buy so I am half way there, I have to get this selling right though.:bonk:

I eventually hope to be in property and fixed interest/cash investments in a few years time and in the mean time I am still buying those dips. Sorry for the long winded answer.