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A lot of the value of seminars is motivational, which has value but not in a very logical way.
The “best” ones you walk away from thinking – wow I never knew that, I’m motivated etc. The people who feel they benefitted a lot, would probably feel that way to anything, and the people who don’t are naysayers who generally find everything useless. So what does that mean ?
It’s like any product, try it out if you think it’s worth the cost, and decide for yourself.
Education needs to be balanced with experience and the cost. I have 2 masters degrees and I think the second one was unnecessary. Well maybe it wasn’t. But they are worth less now than they used to be and cost more these days.
Back in the 80’s you could flash around an MAF or MBA and be guaranteed of a nice position. These days there are a lot of youngsters with these qualifications and no experience and the piece of paper is musch less useful because everyone has one.
ditto and even more so with undergrad degrees.
wait a minute, you don’t need 10k for an overseas trip. When I wore a young lad I went on a 3 month overseas trip that cost me under 3k including the RTW airline ticket (ok that was a while ago), but really you don’t need to spend lots to have fun. Here are some tips
1. spend as little time in London as humanly possible
2. in cities with expensive accomodation (eg venice, NY) catch the overnight train or bus in early, buzz around and head out on another overnighter.
3. bring along a tent
4. use mcdonalds toilets for showers and pitstops instead of using paying toilets/showers.You can definately have plenty of fun on a shoestring (ie $20/day in todays $) and meet lots of nice girls along the way, some of whom may be able to inspire you with ideas on how to stretch a $ further than you ever imagined possible.
here is another one out of the square : i saw magic kingdom land advertised for sale (ie 10acres+) for under 1mill recently. Surrounded by industrial land valued at vast multiples of this. Only problem is it is zoned leisure/tourism. The previous funpark was a dud. What is the solution to this problem ??
I own property in Sydney. I agree with you though, melbourne is a better investment at the moment. The median price differential cannot be justified. In the next 2-5 years when Docklands works itself through and outer melbourne reaches it’s geographical limits, prices will rise in line. Sydney is dying because of structural and planning problems. I suspect that more people move out of sydney than the 50k who enter per year, although bob carr uses the influx as an excuse for the parlous state of infrastructure. It is very difficult to build high density multistory appartments in Sydney, there has been nothing like the tower devellopments in Sydney. The glut in piremont and the inner city is a lie. There is insufficient supply but this is choking off affordability and the engine room for commercial growth. Clover moores are killing Sydney. Property owners in the area love it (the NIMBY syndrome), but in the medium to long term it is very bad for the core demand for accomodation.
I don’t think it is a dichotmous thing. People get into this all or nothing mindset that results in unbalanced decisions : all security or all slavery, all risk or all security, all independence or being completely dependent.
Life is about being able to deal with these conflicts, and being able to love and work well in a balanced and integrated way.
There is a fantasy amongst some people that making a small fortune, “retiring” or whatever will somehow solve their problems, when this is just avoidance of their central problems (usually interpersonal and self esteem). A secure job is not a panacea but it is a potential asset as is an education. The real task is in negotiating and adapting to lifes uncertainties and ones conflicts with these resources.
The question is : if you did lose everything, if your portfolio because of fate or chance fell through the floor, WOULD YOU BE A FAILURE ? If this is the case you should wonder if you are (over)compensating for areas in your life that may also need attention.
There is obsession with money, and then there’s obsession with money…
Derek, last time I looked newly completed/previously untenanted melbourne inner-city apartment market (CBD, Docklands, St Kilda Rd and Southbank) vacancy rate was 10%+. This has been fluctuating from 7-10%+ for the last 2 years.
The proportion of investors is from memory over 40%. There is still a lot of supply due for release until late 2005. In my opinion prices may not stabilise until after this or may even crater a bit if people who have been holding on start to dump. This may have a flow on effect to substitutes (inner city terraces/houses, middle ring) properties).
michael, sometimes you lose (or don’t win), learn from that & get back on the horse. Things are always easier with retrospectoscope.
Sydney : here is what I think – the cabramatta/liverpool region is/was an industrial magnet as it used to be one of the cheapest places to get industrial property. My opinion is that this moved to the penrith area until recently. Until about 2002 you could still find cheap industrial property there and positive cashflow residential properties. I still think it is a centre of growth although there seems to be large tract of land between penrith and blacktown that when released may clog up the m4 when it gets developed. This may not necessarily be a bad thing. I think the area has a lot of potential but the flat price differential between blacktown and penrith a negative.
Outer ring in general : It seems many people sold out of their IP’s in these areas around 2000. You are definately not alone. People got tired of holding something unglamorous that hadn’t gone anywhere for years, when everywhere else had started moving & it seemed it was a CG deadzone. Moral of the story : holding onto your strategy in the long term is hard, particularly when prices are stagnant. Another moral whcih people may learn soon is that chasing yesterdays gains is also a hard game.
Melbourne : I agree, it starting to get interesting and may become more interesting aver the next few years.
I tried using all that last time, it just got me confused
I agree, property trusts don’t excite me (but I had to have a look anyway). I was wondering though why anyone would want to invest in brisbane appts when the average return and variance in returns is so crappers.
It looks like a cyclers market, goes nowhere for ages (ie underperforms inflation) and then goes ballistic in the last 3-4 years of the cycle with 15-45% pa returns, whoa baby ! I think you could use the brisbane house market as an end of cycle leading indicator, moves above 10% indicating the end maybe coming.
Could be a weird sort of brisbane mating ritual, where their returns only get fired up with the prospect of things falling off a precipice.
if you have an estate that maybe contested, or if it is a reasonable size and you are over 65, other than using a the solicitor, consider asking them whether you should get an appraisal of your mental capacity.
If there is any chance of you or your loved one having dementia or the will being contested, then this is essential and must be done as close to the time your will is signed as possible. There have been particularly messy cases of people making a will, getting alzheimers, changing the will a couple of times, and there being no clear indication of when they lost capacity. Even if you you dot all your i’s the will can always be contested anyway, but at least it is less messy.
look, a young guy needs a fast shiny set of wheels, it is essential for his psychological wellbeing !
Last week, I had to upgrade my car & got a subaru impreza from pickles auction, I was impressed with the setup. Try the trading post but also check out the ex gov & lease auction houses, you can probably can get an ex gov small car (eg corolla) for 12k or less. All the cars should have NRMA imspection reports that you can look at before bidding, I like 2yr olds with less than 15000k’s because you’ve avoided the steepest part of the depreciation curve. Problem is you’re limited in choice of colours, ah well life is tough. Also avoid late november as I am told this is when all the school-leavers turn up and bid up prices for the cheap end too much.
‘4k credit card debt…’
What is that doing there ??
Michael, in terms of risk for the beginner it generally goes : cash, fixed deposits, mutual funds, individual shares, margin loans, options, derivatives.
Now if you are a beginner it is highly likely you will blow yourself up starting on options. You are competing against well capitalised, well informed and intelligent people (like wayne) and you will get fleeced quickly. Stockmarkets are Darwinian, what is your advantage/edge in surviving ? Investors often scoff at mutual funds but to invest optimally in them requires as much research as individual stocks. They are generally less risky for the beginner (in my opinion).
Try reading some books, check out some information websites (motly fool, cnnfn, bloomberg, personal investor etc) and look around at web boards eg http://www.aussiestockforums.com
Some good concepts you can pick up are : 1. money and risk management 2. Compounding (and hence leverage) 3. market cycles (and hence market psychology) 4. CAPM (diversification, the basis for modern portfolio theoory and mutual funds) 5. Black scholes (dynamic hedging, the basis for modernday option pcing systems)Do not be discouraged, make sure you play the game as you will surely learn in the process, but only play what you can afford to lose. Be wary of get rich fast strategies in the stock (or any) market.
wayne :
1/ Buy 1000 shares – capital at risk is value of initial purchase 1000 shares
2/ Write 1000 ATM put options – risk is 1000 shares minus put option premium you pocket
3/ Buy 1000 shares and write 1000 ATM call options- risk is 1000 shares minus call option premium.
1 puts the most capital at risk. Depending on the option clauses, there maybe exceptional circumstances (eg share takeover) which can change this.
“But not even a world war (or supposed supply-demand fundamentals) can keep the market from being a bull market when conditions are bullish, or a bear market when conditions are bearish. And all a man needs to know to make money is to appraise conditions.â€
According to Livermore, the single most important bit of information for any investor or speculator to know is the current primary trend affecting the markets at any given time. There is nothing that can stop a bull market before its time or a bear market before it fully runs its course.
Things do revert to mean valuations, but can deviate for a long period. I worry that this CF+ mantra is a stick your head in the sand proposition : things change, it may cease to be CF+, you may need to sell at some stage and if you need to wait for valuations to revert to the mean in a bust, you are in a weaker position as a speculator. It comes down to weighing up : transaction and taxation costs of selling, your risk and servicability profile, and the likelihood of continued capital losses in a bust.
There are in my experience 3 groups of retail option investor, people who are initially profitable or marginal eventually fall into these over a period of time. If you want to have a better likelihood of making a living in this field THEN DO NOT SPECULATE. Get a job working as a broker, quant or analyst for a trading firm or an office job or something else.
I am reading jesse livermores biography again atm, there are a few points that are pertinent :
1. you must start small, as everyone starts this way. But you MUST expect to lose at some stage in your learning, probably most of your capital. With leveraged plays you will lose it more quickly. My suggestion is to learn the basics of nonleveraged investing and lose this way first. Losing in options initially often does not teach basic money management and investment skills in the process of losing as people blow out too quickly. It is really an individual question whether you will learn better learning quickly or slowly, it depends on you personality. BUT YOU WILL DO IT BY LOSING. “All my life I have made mistakes, but in losing money I have gained experience and accumulated a lot of valuable don’ts. I have been flat broke several times, but my loss has never been a total loss. Otherwise, I wouldn’t be here now. I always knew I would have another chance and that I would not make the same mistake a second time. I believed in myself. A man must believe in himself and his judgment if he expects to make a living at this game.â€
2. “The game taught me the game. And it didn’t spare the rod while teaching.â€. Not surprisingly the best way to learn the art of speculation is not to read a book about it, but to actually speculate yourself. Regardless of how little capital a new speculator starts out with, he must actually bet some of it in the real-world markets to learn and grow as a speculator. There is no other way.And Livermore wisely points out that real-world trading is the school of hard knocks.
There is a miniscule chance of you being profitable in options trading in 3 years (1-5%). There is a small chance of you outperforming indices in nonleveraged investing (10-20%). Which will you choose ?
this will sound like a wet blanket but I would not get involved in leveraged plays on the sharemarket (incl options) until I was profitable in nonleveraged investing and until I was well capitalised.
There are 3 retail investors in the options arena :
1. small speculators looking to make a fortune – they almost always blow out at some stage. The odds are massively against you succeeding: 95-99% fail despite attending seminars, reading books etc.
2. investors who are well capitalised who use it as a small part of an investing strategy – covered call writing etc
3. people who wish to start trading as a business – despite being well informed, market experienced and usually well capitalised they are usually not profitable in the first 3 years. 80% still fail.I wouldn’t clasify myself as successful yet, and this is probably not going to be very inspiring as it has taken me about a decade to build up my equity.
At what age did you start investing in property?
24
What difficulties did you have in doing this?
i had to save for a deposit
Was your first property an IP or PPOR?
PPOR
How long did it take you to back up your first purchase with another?
3 years
How long did it take to acquire 10, 20, 30 or more properties?
i have 3 properties atm, PPR (no debt) and 2 commercial (40% owing). My philosophy (and other people may disagree) : just the act of buying property or stock doesn’t make you money. Any fool could go out and buy a whole load of stock or property.
What are your plans for the future, ie. how many properties will get you to where you want to be financially?
I don’t have a target number of proeprties. I would like to double my net worth to 4m in the next 7 years.What I have learnt : saving is an essential habit, capital preservation is important, sometimes you will lose – learn from that and get back on the horse.
this is going to sound like a wet blanket. Here is what I would do :
1. make sure you talk to a financial advisor
2. cut out unnecessary expenditure, read something like charles givens book more wealth with less risk for tips on cutting expenditure without affecting your lifestyle too much.
3. brainstorm ideas : if you make a lot more income than your husband why doesn’t he stay at home ?If your balance sheet is in need of repair, try a fixup startegy that does not further add to your risk profile. You may need to make some hard decisions.
that’s the only time I’ve been chopped in/out in this cycle (90’s-now). I take the cost at the current time without a retrospectoscope. I thought there was more downside than upside before the GST. This changed after the GST and I was better off re-entering at a higher price with exit and entry costs than staying out. I guess what you gain from being out is less capital at risk and more information. The bullish signal after the GST was an essential piece of information for me. My risk management is : I figure I can afford to hold PPR and 2 other proeprties in the long run. Given my wealth and current income, this is how much I decided I could hold comfortably as a long term investor. The rest is speculation and capital at risk.
RE is not a single market but you may find that you are only 6-12 months behind what is happening on the east coast. Everyone in Sydney found it inconcievable that proeprty would decline by 20% 12 months ago. It’s a lot more concievable now, but a 40% decline still seems inconcievable.
