Shares or Property?

[Glen48]

Does not matter where the money comes from, it all depends on whether corrupt money wraps house prices or not.

 

[angellicvoices]

Does not matter where the money comes from, it all depends on whether corrupt money wraps house prices or not.

I don't understand you. What is your point? By the way, how do you know if money is corrupt or legitimate?

 

[Glen48]

Easy.... not many peasant/s from overseas countries don't have a spare 5 mill to splash around and Abbott lets any ones one in with money.

 

[angellicvoices]

Easy.... not many peasant/s from overseas countries don't have a spare 5 mill to splash around and Abbott lets any ones one in with money.

Pointing out a whole group as 'peasants' is pretty derogatory, don't you think? You assume that every single person coming into Australia has 5 million dollars of corruption money is another of your poor assumption. There are many productive groups who have made it in this world without corruption. Of course, you may be alittle envious of their predicament, but doesn't mean you can't start your own innovative business and make some money. I don't understand why wouldn't any Government not want foreign investment. Look at Bali for example, the reason why its so nice is because of all the foreign investment. I personally know a number of Aussies who have started businesses there and they love it. It helps the community whom would otherwise be struggling. China is another country who has around 70% foreign owned companies and its lifted many people out of poverty. Infact Foreign money is more important to us because thats how Australia keeps its deficit in check. Again, I don't understand your arguments, you seem ill informed about how the world works. The world doesn't work on a grandiose sense of self entitlement, you need to work hard to get what you want these days. So relying on the Government and whining about hypotheticals that seem irrational is pointless. Reminds me of watching one of those Current Affair programs where they promote fear mongering unto the masses to get their ratings up. But honestly, think of the taxes and duties these foreign owned farms are paying. For example, Centrelink money doesn't come out of someone's backside, Libraries and hospitals doesn't pop up out of the blue. Doctors don't grow their own money. Infrastructures don't maintain themselves and you do realise that the hundreds of thousands of civil servants that serve you, has to eat. Old aged pensioners, carers, disability pensions, Medicare all have to be paid. If you rely on any of these services, then perhaps think about how any economy is run.

 

[Glen48]

ok Maybe you can give me a lecture on CDS's and what the future will be.

 

[DeepState]

From FIRB 2012/13 and RBA June 2014:

 

[luutzu]

So is it shares or property?

 

[Glen48]

Shares for sure. Watch the DOW double in the future.

 

[luutzu]

Shares for sure. Watch the DOW double in the future.

Thanks Glen.

btw, in the wrong hand, money could also buy poverty.

Like that son of a former Chinese Vice-Premier [?] who bought that mansion in Sydney for $60 million [60? fark].. then set about knocking it down to rebuild something that's probably more Feng Shui friendly to bring in harmony from the East, riches from the West and protection from the North Wind and flowing water signifying constant freshness to the South... hehehe... OK, sometime not poverty, but a laugh for sure.

 

[Glen48]

Yes I just can't understand how some one with that much money can think they are doing the right thing....Guess their ego has to be boosted.
See Hewett had to drop 700k to get a sale he will need to send down a few ace's to recover that.
Had you purchased share in EMC you would have increased your wealth by 37,000 %

 

[DeepState]

The Chinese face the same sh*t as the Japanese did in the 70 and 80 when they bought up land, farm, mines, golf courses and Gold Coast.

The dude that run around panic make no money, the one that took on the opportunities becomes very rich.


What happen now? most of those thing the Japanese sold it back cheaper and the Aussie are laughing all the way to the bank and a long the way some Aussies becomes millionaire and billionaire.

When China hit financial crisis, the fly of capital will go back home so did the Japanese before them

you dont need to look too far, the equity market can prove that to you those who took the opportunities when there are threat are handsomely rewarded, those who flies to gold got SMASHED

Totally. Even in Germany, following a savaging in war, had a local market that did remarkably in the 1950s. The market was nearly totally wiped out, you would have needed a stomach of forged steel and not needed to touch your assets to eat but holders with decade plus timeframes did do well.

The following is partly just to have fun in that I'm not trying to be too serious on this. On average the statements made above are correct, in my view. In the following, I'm using gold to illustrate as an extension to the quote, but feel free to substitute this for JPY cash deposits if you like. This is just to highlight that , sometimes, that the answer can be neither.

When the Japanese banking crisis occurred around 1988-1990 (following Oct 1987 and announcements of rate rises in August 1987), it was Japan that was most in crisis and not Australia or elsewhere. At the time, we had books like "The Toyota Way" and everything Japanese was examined to see why bilateral export performance was so strong (which allows them to buy assets offshore). Japanese equities were the second highest capitalisation in the world.

The following shows that property prices did take bit of a hit in Australia and also the US, but it's no economic fabric buster:



Some Japanese did fly to gold as their world collapsed. The below is gold imports/exports into/from Japan, the big spike was after a very large initiative to bring gold to consumers and opened two-way gold markets in Japan, targeted at retail. You will notice that, despite an overhang (as the initiative was not well received) net gold imports remained high during the acute crisis period and generally declined thereafter.



Were they wrong to do so?

Here is what subsequently happened to real estate:



...and here is what happened to the share market:



...and here is what happened to the gold price (in JPY):



24 years and counting....

There is probably no need to go into property valuations, debt loads etc...you know them already.

This is not central case for me. It is a scenario that I find worth considering alongside rosier ones. It happened and there are an enormous number of reasons why this time, and in this or that market, things are different and that this could not possibly come to pass...

 

[Value Collector]

Does not matter where the money comes from, it all depends on whether corrupt money wraps house prices or not.

Are you saying warps???

If you mean warps, do you really think there is enough corrupt money to warp a $5 trillion market,

And even if it could, why would your investment decisions be swayed by it, if you were buying a farm would you care if some other guy bought some other farm with corrupt money? Of course not, you would make your decision based on what the farm would produce.

 

[qldfrog]

this issue with the chinese wealth and its effect in Australia on both stock market and Real estate is probably not black and white:
yes the overall % of RE sales is not that big (but often it is done via family member who are residents and so the real figures are probably higher than the official ones), but it is important to consider that even a small extra demand can have a serious effect on a market;
In the same way that a small excess offer can; a few % of morgage default on the gold coast for example killed the unit market there in the last few years
So I believe the effect is probably substantial;
Is it really different for the share market especially here in Oz where mining is a huge portion of the ASX?
Either by direct purchase from chinese corporation or via the mining boom, the influence of the chinese wealth on the asx is enormous.
Is it a corrupt influence? Probably by western standard: even based on chinese law for currency transfer, I doubt any RE purchase here by private chinese investor is legal.On the corporate side, accountancy there seems as relaxed as it is for our master of the universe wall street guys.
So what if the chinese economy is rotten and drafts are a way of doing business; well maybe more openly than it is in the western world but they are not the only one; and if i was chinese, i would like a bit of protection of assets by going O/S;
After all, i invest O/S myself for that purpose.Let's just make opportunities as they come, and if you have no expectation, you are not disappointed.My week end morning rant ;-)

 

[Glen48]

Six years since the collapse of Lehman Brothers triggered a financial meltdown, some young adults are more risk averse and view the potential upsides of status and wealth more skeptically than before the crisis, altering the homeownership calculation. It's more than the weight of student loans, an iffy job market and tight credit ”” even those who can buy are hesitant."

Some other fascinating stats from the piece:

First-time buyers accounted for just 27 percent of May sales, far below the long-term average of about 40 percent.

Only 52 percent of Millennials in one poll said homeownership is an "excellent long-term investment."

Three-fourths of them believe the U.S. housing crisis hasn't gone away yet, even though it's been nine years since the peak of the bubble and almost six years since the depths of the Great Recession!

Housing Wire notes that foreign buyers purchased just over $92 billion worth of U.S. real estate in the year ending in March, up sharply from $68 billion a year earlier. A whopping 60 percent of them paid all cash, compared to one-third of domestic buyers.

From Money Morning:

So if this is happening in USA we can assume they are looking all over the world for property, even London market is booming .

I can see another Japanese style boom bust here lead once again by the Gold Coast.

Looks like the younger generation are sitting back and taking stock of the situation at least we don't have student loans debt like USA ...yet.

 

[shezian]

Are you saying you have averaged a 30% return over 25 years?

That certainly puts you among the worlds best investors, that means you would have been able to turn $10,000 into $7Million if you compounded your returns.




Have you been using leverage up until this point? if so that might explain the high return. If not, then I don't really think you need it.



Warren has averaged just under 23% over his investment life, some years he has been down 40% others up over 70%, he has not had to many down years in his 60 year career though.

the 23% return has turned $10,000 into Billions of dollars.

I don't use compounding as some years are up and some are low, so in this situation compounding doesn't seem to benefit. If it was constantly 30% per annum then, yes it would make sense, but that is a dream and not reality.
Unless you can think of another way l could better my money managment?

Thanks Sue

 

[Value Collector]

I don't use compounding as some years are up and some are low, so in this situation compounding doesn't seem to benefit. If it was constantly 30% per annum then, yes it would make sense, but that is a dream and not reality.
Unless you can think of another way l could better my money managment?

Thanks Sue

I don't really get what you mean.

If your averaging 30% per year, even if it's up and down, you should be able to compound. you don't need a steady rate.

you can put $100 in and it may go like this, and it still equals a 30% compounded return

year 1 - $130 up
year 2 - $200 up
year 3 - $250 up
year 4 - $180 down
year 5 - $210 up
year 6 - $400 down
year 7 - $800 up
year 8 - $700 down
year 9 - $650 down
year 10 - $1078 up



When I said warren buffet averaged 23% per year, that included years when he was down 70%.

Perhaps your not calculating your average return correctly.

 

[shezian]

I don't really get what you mean.

If your averaging 30% per year, even if it's up and down, you should be able to compound. you don't need a steady rate.

you can put $100 in and it may go like this, and it still equals a 30% compounded return

year 1 - $130 up
year 2 - $200 up
year 3 - $250 up
year 4 - $180 down
year 5 - $210 up
year 6 - $400 down
year 7 - $800 up
year 8 - $700 down
year 9 - $650 down
year 10 - $1078 up



When I said warren buffet averaged 23% per year, that included years when he was down 70%.

Perhaps your not calculating your average return correctly.

Sorry we do compound yearly but not monthly.

 

[Value Collector]

Sorry we do compound yearly but not monthly.

So 30% per year should have you sitting on a few million by now.

 

[shezian]

So 30% per year should have you sitting on a few million by now.

Well, it all depends on when you started and how much you started with. Its a long story what happened. But we have pretty much started from scratch as our risk profile was way too high, so since the start of this year we have lowered it, to bring it to a much more realistic levels of an average of 30% per annum. We were making 80% per annum, and found way too risky and lost a fair chunk of out capital, hence now we are starting with only $30,000, feels like its going to take years to get somewhere with this small amount of starting capital. So we have decided that each year it makes money we add that same amount and if it doesn't we don't add. It has to work for itself. We have lost money over the past few years, only because our risk was way too high, now we have halved the risk, so our chances of every losing our capital is near zero. But you can never say never in the trading world.

 

[ROE]

We were making 80% per annum, and found way too risky and lost a fair chunk of out capital,

How can you be making 80% a year and lose capital?