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      03-04-2012, 06:45 PM   #23
alik01
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I wish I was a baby boomer or Gen X...
Why?
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      03-04-2012, 06:46 PM   #24
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Nice thread pavo335.

Definitely some great point there and some not so great ones.

As Adrian has detailed at length with his own example, not all investors want to set up portfolio and monitor it to ensure good returns - which often leads to over trading which hurts returns! The problem with shares as MrBlonde noted in the earlier thread is that it property will always have an intrinsic value attached to, even after a cyclone or flood and you can always insure it. In the market, a company that is seemingly in great shape can collapse over night - I can give several examples of this but one in particular was SOI where I lost a lot of money - lot for a uni student anyway!

Also the sporadic nature of markets actually put out some of these gent 's theories completely. There is a famous example that illustrates this. A fund was once created by randomly throwing darts at the NY Times stocks section, this fund actually out performed 95% of Wall Street fund managers! This has been repeated many times since.

Before I get flamed, I actually have a Investment Finance degree (with honours) and am qualified to give financial advise and a bit more.
Sure nothing wrong with that, but as we know you can put stops in place/hedge etc against almost any asset, shit I can insure my wine collection (except against willful drinking) which has to be the definition of a liquid asset.

My main reason for the (rather average) link was to highlight Diversity MUST have a place in any investment strategy GG.
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      03-04-2012, 06:48 PM   #25
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Sure nothing wrong with that, but as we know you can put stops in place/hedge etc against almost any asset, shit I can insure my wine collection (except against willful drinking) which has to be the definition of a liquid asset.

My main reason for the (rather average) link was to highlight Diversity MUST have a place in any investment strategy GG.
Agreed!

Although hedging a portfolio is little bit more challenging than getting a insurance policy on a property.
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      03-04-2012, 06:48 PM   #26
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We got graded on write up of all of it and our reflection on how we went rather than actual performance. Commenting on why you selected the shares, behavioral biases and over-trading etc...

The whole thing actually dovetailed into my honours work on empirical evidence of behavioral finance.
Did you cover the difference between loss adverse as opposed to risk adverse behaviour
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      03-04-2012, 06:51 PM   #27
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Why?
Because then I'd have no excuse for not being well off. Let's face it, the days of buying a house for $50k and selling it 10 years later for $300k are over...
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      03-04-2012, 06:51 PM   #28
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Agreed!

Although hedging a portfolio is little bit more challenging than getting a insurance policy on a property.
Ok now its war! that is not true in fact I can hedge a position online with a couple of key strokes, take me a good 10 seconds, and no question on what constitutes a flood
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      03-04-2012, 07:03 PM   #29
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Sure nothing wrong with that, but as we know you can put stops in place/hedge etc against almost any asset, shit I can insure my wine collection (except against willful drinking) which has to be the definition of a liquid asset.

My main reason for the (rather average) link was to highlight Diversity MUST have a place in any investment strategy GG.
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Did you cover the difference between loss adverse as opposed to risk adverse behaviour
Yep!
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      03-04-2012, 07:04 PM   #30
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Quote:
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Because then I'd have no excuse for not being well off. Let's face it, the days of buying a house for $50k and selling it 10 years later for $300k are over...
you can still do it.. there's plenty of property to be had for 50k..
hehe have a look at detroit now.. whether you'll make 300k in 10 yrs.. that's another question..

for the prices you pay in australia,There's a LOT of property in the world you can buy.. of course you start getting into other things like whether you're allowed to own etc.. etc..
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      03-04-2012, 07:07 PM   #31
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Because then I'd have no excuse for not being well off. Let's face it, the days of buying a house for $50k and selling it 10 years later for $300k are over...
Not neccessarily. These things move in cycles - our time is yet to come.

There's still opportunities for huge returns even now. Some of the stuff I bought is worth a fair bit more than I paid - that could just be Darwin though!

Also, it's perspective, $50K probably had the same significance as $300K or a bit less back then. Future gens will say they bought for $500K and sold for $1M. Here's hoping anyway!
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      03-04-2012, 07:10 PM   #32
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Ok now its war! that is not true in fact I can hedge a position online with a couple of key strokes, take me a good 10 seconds, and no question on what constitutes a flood
I don't doubt you could. A lot people can't though. Hell I can't anymore.
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      03-04-2012, 07:13 PM   #33
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Yep!


well anything you care to share?

That is what I was looking for this morning but couldn't find ( I am a bit lazy so didn;t look too hard) the paper I was looking for. Because I would be willing to bet that most peeps think they are the same thing and goes somewhat to explain the aussie fixation with property and gambling.
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      03-04-2012, 07:15 PM   #34
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I don't doubt you could. A lot people can't though. Hell I can't anymore.
come on your not trying. anyone with an online trading account can very easily put a stop loss in place, I know its not a hedge but for most folk it'll do.
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      03-04-2012, 07:16 PM   #35
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Quote:
Originally Posted by alik01 View Post
Not neccessarily. These things move in cycles - our time is yet to come.

There's still opportunities for huge returns even now. Some of the stuff I bought is worth a fair bit more than I paid - that could just be Darwin though!

Also, it's perspective, $50K probably had the same significance as $300K or a bit less back then. Future gens will say they bought for $500K and sold for $1M. Here's hoping anyway!
Recently while in the states I was hearing about how bad the property market is.. a 100k home costs 1500 to rent a month... If you do the math with a loan its cheaper to buy than to rent..

The flip side is, people are having trouble paying their rent bills etc so you can get a tenant but they are problematic..
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      03-04-2012, 07:17 PM   #36
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Quote:
Originally Posted by alik01 View Post
Not neccessarily. These things move in cycles - our time is yet to come.

There's still opportunities for huge returns even now. Some of the stuff I bought is worth a fair bit more than I paid - that could just be Darwin though!

Also, it's perspective, $50K probably had the same significance as $300K or a bit less back then. Future gens will say they bought for $500K and sold for $1M. Here's hoping anyway!
I don't doubt it's possible that can happen, just saying the odds are a lot less. Basically anything you bought back then increased a lot. These days with the advent of the internet and the technology available now, so much more info is readily accessible, so the competition is immense compared to back then.

Australian property prices are so overpriced it isn't funny. If the next wave comes, it will take longer than what happened before, with less opportunity.

Baby Boomers and Gen X had it easy... it will be interesting to see what happens when the BB's die off (sorry if that sounds crude!). Will there be a mass market sell off, or will it just be passed down to the next gen?
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      03-04-2012, 07:25 PM   #37
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Quote:
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well anything you care to share?

That is what I was looking for this morning but couldn't find ( I am a bit lazy so didn;t look too hard) the paper I was looking for. Because I would be willing to bet that most peeps think they are the same thing and goes somewhat to explain the aussie fixation with property and gambling.
There's a lot of articles on this. Check Google Scholar.

Essentially, decisions theory suggests that a loss has approximately twice as much psychological effect as a gain. Loss Averse.

I feel the same.
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      03-04-2012, 07:26 PM   #38
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come on your not trying. anyone with an online trading account can very easily put a stop loss in place, I know its not a hedge but for most folk it'll do.
Decided a while ago, trading is not my game. I cashed out - made money. Don't even have an account anymore - many people don't.
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      03-04-2012, 07:28 PM   #39
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Recently while in the states I was hearing about how bad the property market is.. a 100k home costs 1500 to rent a month... If you do the math with a loan its cheaper to buy than to rent..

The flip side is, people are having trouble paying their rent bills etc so you can get a tenant but they are problematic..
Lots of opportunity there at the moment. My cousin, who lives there, actually bought a few places for about $100K total. They have recovered significantly now.
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      03-04-2012, 07:32 PM   #40
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I don't doubt it's possible that can happen, just saying the odds are a lot less. Basically anything you bought back then increased a lot. These days with the advent of the internet and the technology available now, so much more info is readily accessible, so the competition is immense compared to back then.

Australian property prices are so overpriced it isn't funny. If the next wave comes, it will take longer than what happened before, with less opportunity.

Baby Boomers and Gen X had it easy... it will be interesting to see what happens when the BB's die off (sorry if that sounds crude!). Will there be a mass market sell off, or will it just be passed down to the next gen?
I would say different rather than less.

The Australian property prices have been debated so much. I personally think, there is still demand to justify the prices - which makes it the market price. The worrying thing is the leveraging levels of the average Aussie. Could get ugly.
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      03-04-2012, 07:33 PM   #41
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Lots of opportunity there at the moment. My cousin, who lives there, actually bought a few places for about $100K total. They have recovered significantly now.
Yeah there is alot.. Especially if you have AUD cash.
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      03-04-2012, 07:51 PM   #42
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Lots of opportunity there at the moment. My cousin, who lives there, actually bought a few places for about $100K total. They have recovered significantly now.
Really which state? The Aussie land lord that got shot and killed by one of his tenants was enough for me.
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      03-04-2012, 07:59 PM   #43
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Really which state? The Aussie land lord that got shot and killed by one of his tenants was enough for me.
I think 2 x Ohio and 2 x Washington.

Didn't hear that story. Gun control is out of control over there.
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      03-04-2012, 09:20 PM   #44
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You just need to look at the Storm financial debacle as a recent reminder. All these poor folk leveraging to by property and then loosing everything.
You have your facts around the wrong way.
Storm financancial clients leveraged off their properties to purchase shares and share-based invetments. Many lost properties because of shares.
There is still plenty of opportunity to invest in property in Australia and make a significant amount of money. However, I believe if you are not adding any value, you will not see a huge swing in the near term.

Last edited by travisaus; 03-04-2012 at 09:33 PM..
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