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crashy
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@crashy
Join Date: 2003
Post Count: 736
September 5, 2003 - 4:45 am
no I wouldnt buy a property earning 7% before costs either.
well done on IGO
crashy
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@crashy
Join Date: 2003
Post Count: 736
September 5, 2003 - 4:35 am
Hi reggie
sharefinder forum? not me, must be someone swiping my nick.
the job…well no reply there, dont ya love that? not like it was a 2 hour drive or anything…..oh wait, it was……rude buggers!
re instalment warrants…….yes good idea to do covered calls for income, just finished writing that chapter of my book. margin calls with warrants? not sure if you mean because there is a debt part or whether you mean when writing calls. either way, no margin. in fact I hear you can write 2x as many calls as warrants you own, but I dont think its worth the risk.
re osprey system……I asked the 100 or so traders I talk to, none of em have heard of that system. is it a black box?
are you on my email list? got a nice little trade demo going on at the moment.
cheers
[email protected]
crashy
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@crashy
Join Date: 2003
Post Count: 736
September 5, 2003 - 3:17 am
ahhh if only it were realistic
capital growth is not 10%, more like 7%.
high rental yield can be 15%, not 10%.
capital gains are a by-product of high yield. When yield is high, capital gains are inevitable. Just ask owners in Beenleigh & surrounding areas about their 70-100% capital gains this year. Capital growth is not a question of WHERE, but WHEN. Inner city always appreciates first, outer suburbs last.
high yield is NOT a by-product of capital growth, in fact yield FALLS with capital growth.
taxes, interest rates and inflation must be taken into account.
I did my own spreadsheet (including taxes, interest rates and inflation) and found the opposite was true, which I posted here a few weeks ago.
crashy
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@crashy
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Post Count: 736
September 5, 2003 - 1:19 am
Harold
The interest part of the warrant is tax deductable, not tax free. The capital gain is taxable, the warrant issuers provide daily information about the interest and capital component, and the tax office doesnt seem to have a problem working out what tax needs to be paid.
Instalment warrants are not traded on their own market, they are traded on the ASX like all warrants. They are a great investment tool, because most dividends (except special divs) are received until expiry, and interest is fully deductable. Franking credits and voting rights are also retained. They are a great tool for positive geared investing when used on high yield stocks, and a good trading instrument for the short term.
crashy
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@crashy
Join Date: 2003
Post Count: 736
September 4, 2003 - 1:15 am
re Jenman
About 6 months back I looked into a career in Real Estate. Saw an ad in local paper, a local agent offering positions paying $52k a year. I applied, and was mailed back a Jenman course leaflet. They wanted me to do a 3 month course, after which time I might be offered a position. Whats funny though, is that this same agent has had the same ad running for 6 months now. Which means they never filled a position in their agency, so they were simply marketing this course!
FRIGGIN SCUMBAGS!
crashy
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@crashy
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Post Count: 736
September 4, 2003 - 1:04 am
My question is:
If these people are in their late 40’s, earning $105k, why is it they dont own a home, and have such high debt? Seems they cant get by as it is, adding more debt to the mix will only make it worse.
Banks wont touch them because they are high risk, and rightly so. The best way to help these people is to deny them any more debt. If they can stop spending money like they are and start paying off debt, then they deserve help. Everyone pays rent in one form or another. Its NOT dead money. They are not going to miss out on any capital gains, thats for sure, in fact NOT buying a house might well save them 100k.
The best way to help these people is to give them a good slap around the ears. Tell em to read a book or 2 on BUDGETING.
crashy
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@crashy
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September 3, 2003 - 12:25 am
MY last 100 trades are irrelevant, Im not asking people to let me manage their money, Im educating them so they can manage their own. Secondly, its easy to lie about past trades, impossible to lie about a trade in real time, plus people are more interested if they can watch it happen before their eyes.
By the way, its now 16% !
crashy
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@crashy
Join Date: 2003
Post Count: 736
September 2, 2003 - 11:56 am
geez Mel I dunno, Ive only shown the people an 8% return in 2 hours, lets not go nuts! lol
2pm:
sold 1000 RIO 3496
bought 1000 NAB 3090
(cross-sector pairs trade)
4pm:
NAB @ 3100 (+$100)
RIO @ 3079 (+$170)
total = $270. investment = $3300 (5% margin)
return = 270/3300 = 8.2% [8D]
those who got on my email list know what Im going on about, those who didnt……. []
crashy
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@crashy
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Post Count: 736
August 28, 2003 - 3:13 am
Things that will trigger interest rate rises:
1. US economy rapid growth (highly likely given rates are 0.75%, and there is fiscal stimulus as well). Also applies to Japan and Germany. Does not need to be actual growth, merely the expectation/perception of it.
2. Drought ends. Farmers will suddenly have extra cash, and meat prices will soar. This will push up CPI, causing rates to rise.
3. Money flows out of property and into consumer goods, raising the CPI. The effect snowballs.
Do not think you can wait for other countries to raise rates before you lock in yours. Banks are smarter than you. Our banks have already jacked up rates before the RBA has moved. Lock in NOW.
crashy
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@crashy
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August 27, 2003 - 8:20 am
I had a job interview today, as an equity advisor (stockbroker).
no answer yet, will keep you posted
other than that im just a bum with a diploma
crashy
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@crashy
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August 23, 2003 - 3:21 am
We havnt heard a peep from Adelaide, quite possible any boom there may continue.
re David Murray – lol good track record. been wrong for last 2 years, then switches tack at the top, classic contrary indicator. yeah, lets all keep buying based on his expertise.
The top of any market, whether it be shares or property, comes when the most conservative investors change their view. The smart people change first, then the greedy ones, till all that is left are the “doom and gloom” conservatives who are bitter cos they missed the rally. But if these people, these last possible buyers in the market give in and end up buying, who will they sell to? There is nobody else left. This is why sentiment always peaks at the top. So here we have David Murray, a conservative, defecting. This is the top of the market.
secondly, he is saying all this because his profits fell sharply, if CBA investors hear him say it can only get worse from here (housing boom has been major factor in earnings growth in recent years….if the boom is going so well, why are profits down?), his shares, options plus performance bonus will nosedive with the share price. so he is forced to be optimistic.
maybe he is urging people to get out there and buy, so CBA can increase their profits some more.
ALL BOOMS MUST BUST. how much more certainty do you want? The fundamentals no longer support property investment. Investors will chase the highest return, it may be stocks, property, funds, bonds or cash. At a yield of 2.7%, Sydney buyers WILL look for better returns elsewhere. OK lets assume someone is dumb enough to buy sydney property yielding 2.7%. Where are they going to sell? 1.5%? LOL. you can only take greater fool theory so far.
interest rates are on the rise (as I warned 3 weeks ago….and got shot down for lack of proof) and people WILL SELL not because they want to, but because they HAVE to. It will soon not be about wants and expectations, but about SURVIVAL.
When is the best time to buy property? When nobody wants to buy. When is that? When interest rates are peaking. Therefore, when is the WORST time to buy? When interest rates are bottoming! Which is NOW.
Im not saying areas like Brisbane or Adelaide cant grow, I am saying that as a whole, the property market is done. On average, Aussie property prices are at the top right here.
History, psychology, fundamentals and logic support this argument. Choose wisely.
crashy
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@crashy
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Post Count: 736
August 22, 2003 - 1:59 pm
hey muppet
Im a kiwi boy, a westy!
crashy
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@crashy
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Post Count: 736
August 22, 2003 - 8:39 am
steel roof will collapse long before it melts. with no wood to burn, what would burn that hot that it would cause the roof to collapse?
steel is great, looked at building one few years ago.
crashy
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@crashy
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Post Count: 736
August 22, 2003 - 5:22 am
geez, just bought steves book too…..well guess you better get
“From $13k to $2m in 1.66 years”
published quick smart!
But them maybe someone will come out with a fortune book “……. in 0.8 years”
crashy
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@crashy
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August 22, 2003 - 4:11 am
Regina,
The Tort of Negligent Mistatement says that three conditions must exist to be liable:
1. a legal duty of care owing
2. a breach of that care
3. financial loss as a result of the breach
It is very difficult to prove #2, even if #1 is by the book. I doubt #3 could result could result based on my comments, and #1 would not be established. Secondly I do not take direct control of their finances and never have access to them, in fact I do not even know their identity. But I do see your point.
“Shares, could do cov calls against them, extra income.I would love a share portfiolio for that purpose.If the shares have been held less than a year, extra CGT.
Deal for free, risky, unless you have a water tight trading strategy.”
Covered calls are where you write one call, and buy another call with a higher strike. This has an element of risk (if you do not own the underlying shares) if there is a slow uptrend. perhaps what you mean is a buy-write, where you write calls on the stock you own, producing extra income, thus increasing the yield of the investment. I recommend this strategy, as it gives the best risk/reward of any option strategy. Just make sure you only do it on high yield div stocks. You could compare this strategy to positive geared IP’s, in fact, a lot of my book will be about positive geared share strategies.
You could do covered calls on your stock as well, but its a bit like trying to have your cake and eat it too. Its messy, stressful, and returns will not be as good as buy write alone, as you are spending part of your income on higher strike calls. it is fairly likely your stock will not jump 30% suddenly one day, which is the only reason you would buy the extra call. in a slow uptrend, you can have the written calls expiring worthless (assuming you were not greedy by writing them at the money), while also benefitting from capital growth in the fpo. But you probably already know all this. If not, feel free to ask.
re D4F, in this case I was suggesting they replace the shares they already had, but at 5% margin rather than the existing 100%. risk therefore is the same. I wasnt suggesting they take up trading, just because they open a D4F account. It can be used as an investment vehicle also.
brianhc
“Crashy wouldn’t the tax on Super be 30%, 15% + 15% surcharge as earnings over 100K?”
Quite right, thanks for correcting me. ‘experience is knowing you have made the same mistake before’. However in this case it didnt matter, as the person was self employed. still, I would rather pay 30% than 48.5%. dont you just love our tax system?
crashy
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@crashy
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Post Count: 736
August 21, 2003 - 1:48 pm
well I got 5 or 6 emails, obviously everyone here thinks they have perfect finances, or maybe they just dont trust me
OK, free for all, ask me anything.
Heres a sample of a question I was asked, identity witheld of course:
“I have $80k in shares, $20k personal loan, $6k credit cards 17%, negative geared sydney IP, sydney PPoR mortgage, $100k in term deposit, and earning $200k. Any ideas?”
My reply:
1. sell the shares, cop the CGT. with the all ords up here, theres not much upside for a while.
2. either open a deal4free account, invest $4k @ 5% margin (your $80k back on) OR wait for the market to fall before doing this.
3. this leaves $76k (assuming no CGT), use $20k of it to pay off personal loan.
4. this leaves $56k, pay off $6k credit card.
5. this leaves $50k. the sydney IP should be sold, you wont get a better price for 10 years. consider using these funds plus your spare 50k to buy several properties in QLD. or you could pay off your PPoR, but with rates @ 6% you are better off investing in a fund paying 9% rather than reducing debt costing 6%. you might also look at a managed fund. funds can make money when the market falls also.
6. if you dont have health insurance, get it. not having it means you pay medicare surcharge of extra 1%, or $2k a year, so does your partner.
7. consider salary sacrifice into super. pay 15% tax rather than 48.5%. possibly set up a DIY super, and invest in QLD property.
8. set up an interest offset account between your mortgage and term deposit. you are paying 48.5% tax on term deposit interest, while claiming nothing on PPoR interest. offsetting this interest will save about $2500 a year in tax. once the term is up, pay off your mortgage.
crashy
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@crashy
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Post Count: 736
August 21, 2003 - 7:01 am
“Ingenious and complex in design or function; intricate.”
crashy
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@crashy
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August 21, 2003 - 6:58 am
at rent $130 and value $150+, the yield is around 4.8%, I would sell and find better opportunity elsewhere. wont be any CGT, take advantage of that.
the unit, rent $150 worth $145k, yield just over 5% probably negative cashflow, positive geared, dont be in a hurry to sell.
banks wont have any problems giving you $300k+
crashy
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@crashy
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Post Count: 736
August 21, 2003 - 1:36 am
awww geez no 3rd star? booo
Vince – you emailed me but your address is getting bounced. got another email?
crashy
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@crashy
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Post Count: 736
August 21, 2003 - 1:18 am
Mel
lol that could be it.
what makes me laugh is that in the job ad they state “we are an ethical and responsible equal opportunity employer”