The Psychology of Declining Markets....

Discussion in 'Investor Psychology & Mindset' started by sash, 28th Jan, 2016.

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  1. sash

    sash Well-Known Member

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    Nope...I don't really care...either way..it is after all ONLY a internet forum....

    I know where the opportunities are...I will just maintain focus...worked for me before and will continue to work for me. That's all.....

    I approach my work this way also...emotions cloud good decision making. Just talked to someone today which pricked my ears up....that was in Sydney. Its like gold prospecting...you need to shift through a lot of sand to get to the nugget.

    The internet is good medium..but also an excellent medium for the non genuine to hide behind. We had a good discussion about this last meeting...
     
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  2. JDP1

    JDP1 Well-Known Member

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    correct.
    The wheels are in motion.
    as little as 5 yrs back, the bris market was dominated by resources. The politicians especially were so short sighted all they could think about was when the next shipment of resources would sail off to china ( no, im not kidding- it was the lowest hanging fruit that tasted the best financially, totally disregarding obvious future cyclical events).
    Since the cyclical commodities downturn, they ( both private and public sector) have ( in the last 3 years especially) taken steps to transition away from that and so far they have made progress- there are a lot more non mining jobs than before. However, its also a continual evolving process. Its not going to have the might of sydney and mel regarding non-mining jobs in 5 or even 10 years, but will close the gap with those two regarding the number, salaries, types of jobs, types of companies hiring etc.
     
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  3. melbournian

    melbournian Well-Known Member

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    This is known as a ppor flip a lot of ppl do it sit on property and upgrade or Reno flip. It enables u to pay off ur ppor faster
     
  4. melbournian

    melbournian Well-Known Member

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    Yeah a lot of offshore work going overseas I know Sensis uses graphic designers in India now and many of the banking functions are also being performed overseas and that does not even include the call centers
     
  5. JDP1

    JDP1 Well-Known Member

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    Yup..the big fellas here in Brisbane are the same...suncorp,virgin etc all have commoditized functions and low risk functions outsourced. I have even been hired by one of these to facilitate it !!:)
     
  6. Kangaroo

    Kangaroo Well-Known Member

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    i was in a similar situation. The harder I worked, the quicker and deeper I dug the grave for myself.
     
  7. JDP1

    JDP1 Well-Known Member

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    You might have misunderstood my post..my job didnt get outsourced - rather i have been hired as a consultant to facilitate outsourcing.
     
  8. RetireRich101

    RetireRich101 Well-Known Member

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    It's all doom coming to Sydney people. All jobs are moving out of Sydney so pack your bags and sell your houses now

    Buy in regional in every state. The less capital growth the better as this will reduce your overall land tax bills if you were to grow a massive 30 properties portfolio just like me
     
  9. skater

    skater Well-Known Member

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    Not one single bit! Just not a fan of the condescending way that you address people & the know it all attitude. Like this post below that insinuates that the few retirees on the forum are not sufficiently prepared for what may come in the future.
    The truth is that anyone that has managed to retire on rents has been around for a while. You don't get there overnight! You've seen a few cycles & know that midway through the cycle something will upset the applecart, and if you are not sufficiently prepared then you are in great danger. Last time we had the GFC, this time it could be simply rates coming of IO, but I'm betting there will be more in store than that, so yes, I agree that being prepared is vital for success. And I don't disagree with some of what you say at all.....it's just the manner in which it's said that implies that you are the only one who has thought of something and the "time will tell" posts.

    Like you said in one of your posts, something about being diversified & it being a "money making machine", again I agree, and I am also very diversified. Rents are forever creeping upwards. They may stagnate in one area, while are moving in another. Exactly the same with CG. Moving forward constantly with no effort at all on my part.
     
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  10. larrylarry

    larrylarry Well-Known Member

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    I personally think the current discussion is timely even though there is no clear picture as to IR, APRA, economy, wages, immigration etc. Working off assumptions is the next best thing.

    On that note, I'm really concerned that some bought city apartments OTP for more than a million and projected weekly rental at max is $800. Prices don't always go up.
     
  11. skater

    skater Well-Known Member

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    Yes, it's always good to get a grounding from those that have been there. Although none of us has a crystal ball, you can still take an educated guess at what may happen, and be prepared.

    As for those who bought overpriced, low yielding properties...well there's not a lot you can do about them. Some of them will ultimately receive a very expensive lesson.
     
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  12. Simon L

    Simon L Well-Known Member

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    I'd be interested to find out the percentage of these OTPs bought with cash or very low LVR, hence no real care if they go up or down. I suspect it would be quite high
     
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  13. zed_kid

    zed_kid Well-Known Member

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    The things that scare me most are

    low wage growth
    outsourcing of ‘white collar’ functions
    IR rises due to US IR

    If we see 3% YoY drops for 3 years there is your ~20% drop inflation adjusted. It’s not fantasy.

    So we rode the CG wave for a couple years purely on the back of low IR, now what?
     
  14. keithj

    keithj Well-Known Member

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    A far better statement would be ..... prices are extremely likely go up in the time frame I care about, who gives a **** about anonymous dudes making wild guesses about short term outcomes.
     
  15. sash

    sash Well-Known Member

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    Yep it has to do with the sophistication of the investor. I dont really care whether people listen or not I am just sharing my vewpoint. I do put my money where my mouth is. Every market has cycles this what i an highlighting. The OTP market will repeat what happened a few years ago.
     
  16. Kangaroo

    Kangaroo Well-Known Member

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    Agree with this. At the begining phase, aim at capital gain rather than huge rental. At the later phase, aim at rental growth rather than capital gain growh.
     
  17. JDP1

    JDP1 Well-Known Member

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    further to my post above, i think they have (although realised late) done quite well in a fairly short amount of time. 3-5 yrs is not long in the property game. As mentioned, this is an evolutionary process and progress can be seen by the level of activity going on, especially within construction ( and almost all of it in BCC is non-mining related). There seems to be good private sector engagement, especially with foreign $ coming in to bankroll a fair bit of this non-mining related development. So far RE prices have mostly reflected that as well with most areas within the BCC recording moderate and steady growth over the last few years. Yes, some of it is simply because of FOMO...but a lot of it is because of the current activity planned and in progress, aligning with future directions- the market likes it and has responded and will continue to do so as BCC ( although moved already) is somewhat near the beginning of its growth phase.
     
  18. timetoact

    timetoact Well-Known Member

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    I agree euro, the froth is already being blown off the top. I expect a bit more of this, and then a looooong period of not much. Which will result in negative real growth over several years.

    There are better places for our funds over the next 5-7 years but we will be making sure to re enter the Sydney market after 5 but before 7 years.

    Zero growth over 5 years is huge compared to the gains to be had elsewhere.
    Time in the market is a fallacy, timing the market is not easy but not impossible and very profitable. And certainly easier with property than the share market.

    The only thing I disagree with is that I think the APRA rules will be relaxed or suspended at some stage when rampant RE price growth is no longer an issue.
     
  19. melbournian

    melbournian Well-Known Member

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    Not wanting to throw stones but it is transition phase I know my friend was Saying they hired 7 ppl to be subject matter experts for the outsourcing but after the process they were all gone. Same with switches with contracting companies.
     
  20. euro73

    euro73 Well-Known Member Business Member

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    The APRA changes were not designed to target housing prices. If that had been APRA's ambition, they would only have restricted lending in the more expensive markets.

    They were targeted/ designed to improved banking stability because the banks books were becoming overweight/biased towards I/O debt ..... once banks books are biased back towards P&I, perhaps APRA will lift the 10% speed limit on I/O lending, but I'd be quite surprised if they allowed a return to "actuals"

    So it may be the case that the I/O cliff that seems a real concern at the moment becomes a non issue as I/O terms start being easier to renew in the coming 2,3,4 years, but I doubt servicing policies will be allowed to return to what they were.