Securing your Financial Independance

[tech/a]

Tech

Can you just clarify your above comment that "this is sound advice in a bull market...."
Do you mean the accountant's suggestion of buy and hold?

Julia

Julia.

Follow the trend.

 

[crackaton]

That is an excellent comment! And I have to admit that has happened with me! I must get better at/revisit my sell signals and trading plan. I guess if my super only had blue chips then I could sit back a bit. But I do have (am 'allowed' up to 10% according to the trust document) some spec stuff and these are the ones I tend to trade. And these have done well with minimum cost. But I am so concerned about protecting any profit that I am reactive too!

Trouble is, I remember Poseidon, and obviously the dotcom, and the 80's crash and how that happened before anyone could react - ie overnight. And the fact that people are starting to revisit those times, well....

It will certainly happen again, but I think we are in what some term phase three and only very early, so still a few bucks to be made before the inevitable happens.

 

[tech/a]

so still a few bucks to be made before the inevitable happens.

Crackton

What is so inevitable and why is it inevitable?

I've not yet seen an arguement that dismisses possible un precedented growth,the likes we have never seen and wont see again.

Massive economic growth for years to come with never to be seen again demand from emerging economies,China,Indonesia,India.
Western economies particularly Australia as small as we are can and will enjoy incredible demand not only in rescources but in many other specialist areas. Infrastructure demands are massive,Project managers are commanding $250K US for 6 mth contracts.

 

[wayneL]

Crackton

What is so inevitable and why is it inevitable?

I've not yet seen an arguement that dismisses possible un precedented growth,the likes we have never seen and wont see again.

Massive economic growth for years to come with never to be seen again demand from emerging economies,China,Indonesia,India.
Western economies particularly Australia as small as we are can and will enjoy incredible demand not only in rescources but in many other specialist areas. Infrastructure demands are massive,Project managers are commanding $250K US for 6 mth contracts.

Here's a view on that:

(here are my notes on this excellent broadcast):
http://netcastdaily.com/broadcast/fsn2006-0318-2.mp3

Really gets going At 14mins:
Debt levels much too high. And Americans have too little savings
How'd we get here
1996---: Greenspan delayed recession by increasing $supply
9/11/01: Fed panicked and printed money

BUT ALL BUBBLES BURST, and Housing will bring the economy down:
Housing has exploded in price, more than inflation.

Adjustable rate loans ending in 2006 and 2007. Most cannot afford it, because many spent more on housing than they could afford. Many were betting that houses would go up forever. Refinancing doesnt work any more. So they will slow down their spending. People will get laid off. BIG DIFFERENCE: Prices will inflate in this depression. Will cause chaos. People on fixed incomes will get hurt. Countries using dollars or owning dollars will want to get out. The dollar will fall, and interest rates will rise.

Vicious cycle will hit, taking the economy down& down into depression.

Wealth in housing is not liquid, and cannot be easily realised. If many people move to downsize at the same time, property prices will plummet. The fall in housing will have widespread impact on the economy.

IT'S A DONE DEAL. Nothing new is needed to make this scenario happen. It will happen when the consumer stops spending. It can happen faster or slower, but it will happen.

The fed cannot stop it. Nothing left to reboot the economy.

 

[tech/a]

Wayne.

I have quite a few friends in the US.
Some have substantial property holdings.
All have 30 yr loans at fixed 1.5%---thats right fixed 30 yrs 1.5% God Bless America.

The wealth in the US makes AUS wealth look super sick.
The poor in the US make our poor look like kings.This real estate catastrophie is frankly seen by those I know in the US as a myth.When I was there the demand was so high they were building complete subdivisions (1000+ houses) in Florida and then just selling the whole division at the one time.1-2% long term lock down loans.

So lets look at the US $ falling.
AUS$ rises.
More buying power,more to pay off debt which incidently can be paid off with rescource income in a very short time.
Aust will soon get out of step with the US.

We are in an enviable position.
The US is still growing infact its inflating hence interest rate rises which are still less than ours.

Time will tell but in the meantime I really think hoarding your hard earned maybe a silly thing to do at this time.We may not know how long the golden road may stretch but why get off it when there are blue skies over head.

Youll never reach your goals if you never travel the road.
Often the only fear is fear itself.

 

[wayneL]

Wayne.

I have quite a few friends in the US.
Some have substantial property holdings.
All have 30 yr loans at fixed 1.5%---thats right fixed 30 yrs 1.5% God Bless America.

The wealth in the US makes AUS wealth look super sick.
The poor in the US make our poor look like kings.This real estate catastrophie is frankly seen by those I know in the US as a myth.When I was there the demand was so high they were building complete subdivisions (1000+ houses) in Florida and then just selling the whole division at the one time.1-2% long term lock down loans.

So lets look at the US $ falling.
AUS$ rises.
More buying power,more to pay off debt which incidently can be paid off with rescource income in a very short time.
Aust will soon get out of step with the US.

We are in an enviable position.
The US is still growing infact its inflating hence interest rate rises which are still less than ours.

Time will tell but in the meantime I really think hoarding your hard earned maybe a silly thing to do at this time.We may not know how long the golden road may stretch but why get off it when there are blue skies over head.

Youll never reach your goals if you never travel the road.
Often the only fear is fear itself.

Well people have to have a view and trade or invest to that view. Being a bear, doesn't mean sitting on hands, as us bears have said time and again. And as mentioned before, Bears are Bulls, but in stuff like gold, oil, uranium, green energy etc etc. Bears are not averse to taking a bull trend (unless silly), but being able to liquidate...quickly IS important to a bear. Last year I made most of my money being short. This year I have scarceley taken a short, but I'm still a bear.

If you listen to the audio, folks do believe things are good in the US ATM. But listen to the deeper issues. For instance, without the enourmous increase in credit, the depression would have already started. This trend MUST end at some stage, it HAS to.

Cash ain't King, liquidity is

Just my AUD$0.02 (worth even less than USD$0.02 )

Cheers

 

[wayneL]

http://news.morningstar.com/news/DJ/M04/D11/200604110907DOWJONESDJONLINE000369.html?Cat=TopDJStories

WASHINGTON (Dow Jones) -- After several years of low interest rates and ample liquidity, storm clouds are developing over global financial markets, according to a new report from the International Monetary Fund............

 

[tech/a]

From the Article mentioned

"However, any [stock] market correction is unlikely to be very significant given that market valuations, measured by price-earnings ratios, are currently around their long-term averages in most countries -- meaning, they are not as stretched as they were in 2000 and therefore less vulnerable to a "bursting of the bubble."

According to IMF estimates, a slowdown of U.S. home price appreciation from 10% last year to zero would reduce personal consumption by around 0.5-1 percentage point.

But this could allow the personal savings rate to rise somewhat and contribute to a moderation of U.S. current account deficit.
Another concern is that high interest rates could raise the debt-servicing burden of U.S. homeowners.

The debt-service-to-income ratio for the household sector is already at a high level of 13.5%.

But the report was sanguine on the issue of the flat yield curve, saying that several factors indicate it is not a sign of an impending recession in the United States.

Wayne I see this as a Far cry from the articles about after Desert storm.
Then there were huge scares about the massive cost to the US.

The Bear came out growled a bit,and is now thinking about hybernation.

The above is a long way from DEPRESSION.

Anyway eaven bulls can turn to bears given the right conditions.

Just as an aside there is a big difference between slowing of housing Sales and rising interest rates and demand for housing.

 

[wayneL]

We shall see. But apart from what we have, which is in the UK and not for sale, all else will be liquidatible assets.

 

[markrmau]

Wayne, this time it is different.

 

[wayneL]

Wayne, this time it is different.

hehe

 

[wayneL]

heheheheheh

 

[wayneL]

:-X

 

[ghotib]

Well there's one comfort Wayne. Our dollar coin is more like a paver than a rug, and you can't sweep things under, or pile much up on, a paver, let alone pull it out from under anyone's feet.

Ghoti