Marc, I have had the privilege as a public accountant to get to know in enormous depth the lives and business practices of maybe over 1,000 clients, in 35 plus years.

In my practice alone I would say there is not one sucessful client who has not broken the law. That breach may be as small as lying about there financial affairs when applying for a licence, to as high as buying a surgeon a 220k Merc, because he pedals a product that my client sells. I cannot say the surgeon performed needless operations, I don't have that info, but will say he sold 90% of all the product we sold nationally, and after his death, the national sales of the product slumped. Apparently not all specialists had his moral values. Though one other specialist did comment after a operation " very good procedure doctor….but where was the cancer "

My first eye opener was a public company director who was no 4 in T@T  What struck me was his sucess as a share trader. Starting with a very small inestment he built up a small nest egg of $200k (early 80s) , he was exceptional, he always bought his shares weeks or even days before before a bonus or rights issue. I am sure the directors on the boards of companies he shared also bought T@T just before such evernts as well. All great investors.

Now the kicker with the pub director was that in the early 80s he bought two Gold Coast properties off the plan for $160k each. By time of settlement he could not unload them for $80k. Basically blew all that he made by investing in something he did not know, or maybe he actually beleived he was a great investor.

Now withn the doctor, the thing that makes me wonder about a god, (unmester please take note) is that this doctor died from the very "illness" that he was a specialist in. Dead 6 mths after diagnosis. Too busy making bucks to read his own symptoms till it was too late, and the night before he died he tallied up the last sales and sent off an "invoice" closing out his secret commisions at around 10pm, and was dead before morning.

and I wish I was making up that last one but it is true, and as the Jute importer said to the piano teacher (Peter Cooke and Dudley Moore)  "no-one has talked to me like that in 20 years, you have integrity…..and that is something I am willing to pay for.."
put a big enough bag of money on the table and even I will even put down the names,  4 corners could work off my stuff for years..

Marc you may probably see me taking some form of joy from the downfall of these hardworking individuals, ..holding them out to ridicule, but me, I see it as Karma, and it renews may belief that there may be a god……I think his name though may be Loki…

well if it had sold it would have been 54.5%, but as it did not, who knows……it couldn't get any worse ??????   could it ???

Had a meeting with the one client whose opinion I value, on the economy, and ran my above scenario by him. After a short pause he said there is a counterpoint, " what if every asset class is going down, wouldn't  2% interest be a great deal ???"

Had not thought of that, ……what a relief, was worried for a while.

Also echoed today by one of the world bank / IMF bodies about the UK borrowing "too much", placing deflationary pressure on the economy.

Guess they did sell for 500k sometime ago.

the guy who told  the storey of the banker who is evaporating before our eyes made the front page of the Fin Review once when Kerry Packer (rest his soul) made the quote of  "he'll never work in this town again", Kerry thought they should tear up a deal he signed and redraft it more equitably, and that was around 10 years ago, and he never has. However he is probably one of the few people in Sydney with an Olympic size equestrian area complete with full sand dressage, within 40mins of the city.

why I mentioned him is that he makes our SMH title deeds pages often, the first time when he sold, his Mosman home in mid 90s for 950K, he had paid only low 400s for it 5 year before. Great deal, especially if you did not know that he spent 600k on it after the sale, only deal he has lost in.

he had one in Palm Beach as well, paid low 2M for it probably 2003, sold it for 6.7M in late 2007 (the peak), sounds good, and it was, the indoor swimming pool with sliding glass wall opening to the 180 deg view of the Ocean, was something the  Olsen twins enjoyed,  but those renos were over 2M, which makes the profit very good, but not exceptional like yours..

people never include the "improvement costs"  when quoting profits, so often very misleading

glad to see your end holding up, but maybe you should keep the tissues handy just in case..

Hmmmm…. $12k, buy some good Nikes and run in the opposite direction as fast as you can..

and after that one year, they will do what exactly……

Hmmmmm……….first thought was firebombing, but damm that would effect the property……..but then again how much insurance do you think you could get on it, it could be a real win win……

well actually it is no more difficult than 2005, a no brainer actually.

lets see, a kabillion (trilion is too small and …well..a  zillion was what we used in infants, so can't go backwards can we) of liquidity has been lost out of the world markets.

Right now every bank, government major company is issuing new shares and raising funds, (been going on for a while – this is a game in which no one wants to be last cab in the rank) only problem is there will not be enough to go round. Recently in Germany they had two large raisings that could not be fully met. Now Germany is thought to be best off among the major Euro players, so it is concerning when they find the cupboard bare.

If there is not enough money to go round, then what will the boys do.

They have two choices.

1. raise rates to try to compete aggresively for the few Kabilion circulating,  raising rates will slow the recovery so we are in for a long hard grind (plenty of time to take on new values and find other ways to enjoy life)

2. print more money – now this usually leads to inflation and other trading partners need to make an adjustment otherwise one country could print enough money to buy up all the assets with it 's trade partners, so the trade partners will sell the currency down
– if they sell the currency down, you can print more money (see Zimbabwee) or you can raise your rates to counter the sell down.

one of the buffers to this in the past decade was the huge crossinvestment round the world. As the drop in our currency has shown a huge amount of these funds has been repatriated, in the first few months of the crunch.

So what am I predicting  – a long slow recovery, with increased rates significantly impacting on the hoped for quick recovery.

Now I could be wrong, as I don't know all the pieces to the puzzle, including when will China actually pursue economic reform so that the people paid $1 an hour can actually buy the things it produces and sells to the west. If that happened we might get out of this faster, but hey that may mean the new Madarins have to drive Mercs instead of Bentleys so I am betting that will not happen.

return is based on risk.

If I can get "X" with no risk and no effort, and no stress, what level of return would I except for increased risk and effort.

if you are happy with your expected return for the risk go for it, why I am not hurrying, is because I perceive the market to be falling.

Why pay $1,000,000 for a house I hope to buy for say $800,000 later, at a time much closer to the upturn in the curve,

There is a percetion that you must be out there actively investing, moving from shares to property to precious metals, collectibles
but some beleive there is a time to watch the carnage and have a break before the next cycle.

oh yeah and I do care who called it, …..cause for four years we put up with so much crap about "this time it is different", don't want a pound of fleash but don't take away my fun..

my favourite was the member who asked how to invest in property, build a portfolio, while on centrelink…and she got advice from someone who had done it..  great days indeed..

Wealth I say to clients what we are experiencing is not the end of the world, it is just Darwin's theory applied to the corporate world, survival of the fittest..

and I agree. let the big boys die, cull the executive crap that got them there and reboot.