it's been coming for years. It has been artificially propped up. The only problem with this is it just increases the inevitable trough.
Lending practices in Oz are among the most irresponsible in the "1st world". Australians love property investment and have mortgaged to the hilt to get in on the boom.
It wont take much of an interest rise to crumple the high geared mini property moguls. This will cause massive undervalue selling which will crash the property market.
Looking to buy a house? Wait till the end of the year.
Unless you're in WA, they will be propped up by the minig boom for many years.
Overheated market??
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jimmyc1985
- Champion of Essendon
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- Joined: Wed Aug 30, 2006 11:33 pm
- Location: Position A
Filthy, i believe you called the market a 'house of cards' when it got to 5000 on the old BT 
. If memory serves, you were seriously contemplating selling out at that point - i hope you were only joking 
.
Anyway, what Fat Prophets have said in that excerpt is essentially a copy+paste job from the comments that came out from the recent International Bank of Settlement meeting. Australian lending practices are generally better than those in the US thanks largely to guys like Bond and Skase, so any downturn in our markets are unlikely to be as severe as those in the US.
Whatever happens in the market, happens. But i can say with a high degree of certainty that any correction will torch the shit stuff whilst the good stuff will only suffer minor damage. These little pissfart penny dreadful mining companies that aren't going to earn a buck for years floating at a 150% stag just defy any logic whatsoever, and people who want to play with that sort of crap are the people who'll go under should a correction of any significance take place.
. If memory serves, you were seriously contemplating selling out at that point - i hope you were only joking .Anyway, what Fat Prophets have said in that excerpt is essentially a copy+paste job from the comments that came out from the recent International Bank of Settlement meeting. Australian lending practices are generally better than those in the US thanks largely to guys like Bond and Skase, so any downturn in our markets are unlikely to be as severe as those in the US.
Whatever happens in the market, happens. But i can say with a high degree of certainty that any correction will torch the shit stuff whilst the good stuff will only suffer minor damage. These little pissfart penny dreadful mining companies that aren't going to earn a buck for years floating at a 150% stag just defy any logic whatsoever, and people who want to play with that sort of crap are the people who'll go under should a correction of any significance take place.
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jimmyc1985
- Champion of Essendon
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- Joined: Wed Aug 30, 2006 11:33 pm
- Location: Position A
Fair enough. You obviously have a very good sense of timing if that's the case - the market peaked at almost exactly 5300 in May 06 and bottomed at almost exactly 4800 a month later.
As for the buy in gloom, sell in boom mentality, it's intuitively pleasing but too hard to execute consistently, because no one knows exactly when it's boom time and when it's gloom time. In the long term, asset allocation makes up about 85-90% of an investor's returns. Timing is nice, but we're all better off buying good companies at fair prices, as opposed to fair companies at good prices.
As for the buy in gloom, sell in boom mentality, it's intuitively pleasing but too hard to execute consistently, because no one knows exactly when it's boom time and when it's gloom time. In the long term, asset allocation makes up about 85-90% of an investor's returns. Timing is nice, but we're all better off buying good companies at fair prices, as opposed to fair companies at good prices.
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jimmyc1985
- Champion of Essendon
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- Joined: Wed Aug 30, 2006 11:33 pm
- Location: Position A
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hillchaser
- High Draft Pick
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- Joined: Thu Aug 31, 2006 1:32 pm
- Location: Keysbrough
I'm in up to my eye balls at the moment but I've cut down to what I'm hoping are some good quality company's (mining) that are moving from exploration into production.
I'm a believer in the stronger for longer but that doesn't mean we wouldn't have a major correction soon.
I subscribe to Stock Analysis and had lunch with the analyst the other day.. who said it feels very much like july 1987 .. people are throwing money at crap..
Apparently all the smart guys got out of the market 6 months earleir and then looked like muppets for a few months until September .. then boom !
As Simis mentioned if interest rates in Aust, Canada, US and the UK move up then there will be absolute carnage given the huge debt.
Might be time to move on to the sidelines...
I'm a believer in the stronger for longer but that doesn't mean we wouldn't have a major correction soon.
I subscribe to Stock Analysis and had lunch with the analyst the other day.. who said it feels very much like july 1987 .. people are throwing money at crap..
Apparently all the smart guys got out of the market 6 months earleir and then looked like muppets for a few months until September .. then boom !
As Simis mentioned if interest rates in Aust, Canada, US and the UK move up then there will be absolute carnage given the huge debt.
Might be time to move on to the sidelines...