Warning , Warning , Warning , Will Robinson ....Guru Alert

Quote from another thread

Yes ...!!!!

Haven't bothered buying into that debate this time , after all the crap I got from various members on my stand re a certain guru last cycle , but the forum certainly has a new Guru to worship at the moment .

For me , a superficial read of some of the posts I've seen display an incredible nievity over the matter of time frames for back testing just as a starter .

Anyone who has a knowledge of Technical analysis can create an investment platform which on back testing will show consistent returns .

If you give enough people 100 k in the share market to invest someone will turn that money in to X mill . They can justifiably write a book how I made 5 million dollars in the share market , however the people who read those books or follow those systems rarely replicate that success. Situations change

The end of the last property cycle on somersoft saw many people , flushed with success over their property investments , follow the advice of various guru's and branch into businesses or shares .

From personal knowledge I'm unaware of any who were successful .

The reality is that all the ones I have personal knowledge of ended up loosing much of the hard earned money they made in property investing . I personally know several people ( on and off the forum ) who's lives were turned up side down as a result of being involved in investments outside property .

That's not saying that people can't make money from shares / LIC's etc and maybe this time will be different , but in my experience it NEVER IS .

But , personally if I wanted to make money from shares or LIC's or EFT's or puts or options or spreads ( or whatever ) I wouldn't go to a property investment forum to read about such things , because there isn't the critical mass of people out there to question the proposed systems with much in the way of insight to challenge things. From the same reason , If I want to find out about property investing , I wouldn't go to Aussie Stock Forums to read about property , though one of their longest threads is about property ...

The reality is that successfully investing in shares etc is way much harder to do than invest in property ( and LICs are investing in shares ) . I know people who have done it . One such person is a guy from Adelaide called John who goes under the nick of Tech A . He created a system called Tech trader which was ( at one stage ) the longest running successful traded program on the net . It even survived the GFC .

I met him once at a share meet up in the Rocks . Interesting thing was that he mainly traded for fun , for the intellectual challenge . Guess where he made his serious money ......

The person I personally know who has made serious money from the share market is a Broker ( who made it from broking ) , and once he's made it , he parked it in property . He owned several properties on the north shore and was always complaining about his land tax bills.

So , if you want to invest in shares , LIC's , EFT's , businesses or any other alternative assett class , as you have with property , don't rely on some guru .

Do your research , study , ask questions , find out which forums specialise in that area , join them ( sorry sim ... ) . Study lots of different experts , ask dumb questions and once you think you know what you're doing ...

Come back here and stick to property .

Cliff

 

Before someone corrects me ...

I am aware of forum members who have gone from property investing to successful businesses , though all property related

there are quite a few members who are now BA's , PM and MB's .

Cliff

 

Yep i know John and have had many long discussions with him. He has reached a level of understanding and competence in share investing that I believe few here will ever achieve. Indeed he made most of his money in real estate and even when he utilised his systems approach to share investing...when he made a few hundred thousand and then the ugly drawdown stated, he got out to buy commercial real estate and did really well there too.

 

You raise some good points Cliff. Your post to my reading seems very passionate to say the least (maybe just my reading).

The reason discussion on shares here is popular is the long term focus which is often missing or rubbished by traders on shares specific forums. This IMO is in part due to the property investing mindset.

 

Re: shares... 1979 to now, if you use industrial shares, accumulated the dividends and capital growth, you'd have a 14% annual return. You can shift the time periods and the truth is; shares will tend to give a solid return over time.

Property has advantages such as it's easy to leverage, you can improve it. However, shares also has its advantages. You don't have huge buying and selling costs, you dont have to worry about bills coming in or tenants, it's liquid so if you need money urgently it usually only takes 2 days to have your money etc.

Shares has its place. Many people haven't got serviceability for another IP, don't want the hassle or they have a lot of money sitting in term deposits year in and year out. It makes sense if you have a lot of cash say in a offset account or term deposit doing diddly squat.

I'd day, it would have been a good thing if people had their money in homes in Sydney and Melbourne the past 4 years. Timing is everything with that. Shares... you get share market rallies and you have share market busts. Buy on the busts.
If you are active, like say MTR and some others with property, you can sell on highs when you think it's gone as high as it will (This is not how Peter does his share investing though. He's generally a "hold" good stocks guy). Anyway, trading and locking in a price is applicable for both shares and property.

I say listen, keep an open mind. Many people have run out of serviceability... its a better usage of money rather than cash in offset or term deposit. Better than some property investments too.

 

There are so many potential pitfalls in that simple statement .....

I have a system that on backtesting for the preceding 20 years , that I back tested using Monte Carlo simulations that consistently gave me over 50 % returns , however when I started trading it ... well ....

The reality is at this stage you are not buying shares in 1979 . You're buying them from now .

I hope you do well .

Cliff

 

Peter's advice is not to trade. And of course, you cant go backwards in time, only forwards. Same as I would have loved to buy some terraces near Sydney city or a house on Carlingford Rd Epping 15 years ago.

But the share market has a very long history of going up over time. Plus dividends. Yes, there are advantages to property, negative gearing, depreciation. But you have vacancies too, tenant damage, unexpected bills. Shares and property are different asset classes. Both are perfectly valid and have their place...

 

OP seems to be confusing trading with investing. Yes I know all about Tech/A. Stopped following all that rubbish many years ago. In fact the worst thing a serious "long term" Share investor can do is go to a share's forum for sensible investing knowledge.

Come to think of it me either. I'm sure this whole "living off dividends" thing is a con job.

They won't fool me though, I know that property is the only true path to riches:

End of story.

 

I was always taught that Diversification is key. Have a bit of cash, gold, property and shares?

The mix, when to invest in each one, how long to hold etc is the tricky bit?

Great post at @See Change ! This is a discussion that needs to be had..

 

It would seem again and again and again .... and again.

Why bother, just a waste of time and energy.

 

I've never agreed with that. Very rare you will see someone who is excellent at making money in all asset classes, you just end up tying up your capital in the wrong place diluting your results. Specialis in one thing and get really good at it I say.

 

Does he visit the forum???

 

Years ago, I remember another guru using those words or similar words. Also to a bunch of property investors!!!!

I can't remember his name but it was something like N@vr@. He convinced me and I put money in. We all know how that turned out.

@See Change, you sure your first name is Cliff, not Steve .

 

@MTR I don't know if he visits the forum or not. He's active on other stock forums in the past. He also has a construction company that builds retaining walls He's a really nice guy actually. Extremely intelligent, both in the theory of wealth creation and in a practical sense.

 

Thats just not true though. It can be super simple. Buy a few ETFs, index funds, and forget about them for 20 years. Its what people's super funds do. And what Peter Thornhill is advocating is very similar to this (he's not my guru btw, i invest a quite differently to him, but think his message is very good).

I agree that technical analysis etc is much harder. But thats not what most people here are advocating.

 

I have to agree with you wholeheartedly on this. All the people I know who have KILLED it in creating wealth have mainly focused on 1 asset class and became experts in their fields/niche areas. Usually its business/real-estate.

 

PS im very happy people have different opinions and post them, so thank you @See Change!

Apart from many views making a market, if everyone was bullish on shares all the time, they'd always be expensive.

 

What a surprise. People who "killed it" tended to have highly focused portfolios in a class that happened to do well.

The problems with your point of view here are:
1. You're specifically looking for people showing massive outperformance, which is more possible with more highly concentrated portfolios
2. You fail to acknowledge the implicit survivorship bias you are subject to
3. You presume that they succeeded due to innate skill and ignore the role of luck

Your basic set of observations can be explained solely by the observation that a more diversified portfolio will by definition have a lower standard deviation of outcomes while a less diversified portfolio will have a higher SD

 

hmmm , so what is the moral of the story?
if you are a gunproperty investor, diversify the locations but stick to property????

 

He was the one I got into trouble for having the temerity to question...

Cliff