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  • Profile photo of fWordfWord
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    simple wrote:
    Better than gold, can be only SILVER
    Problem is you need a trailer to move it around, bloody heavy in significant QTY's.

    Yeah, and after that is aluminium.

    Profile photo of ksherwellksherwell
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    My friends are all stocking up on silver as investments.

    Profile photo of emptyvesselemptyvessel
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    Usually by the time everyone is talking about buying something specific around the watercooler, the time has passed to get in. When I subscribed to Fat Prophets a few years back, they had been bullish on gold since around 2001. Then again, they were bullish on lots of commodities and equities.

    On another note, Warren Buffet is famous for never buying gold and has rarely bought silver. Apparently once, but I don't know for certain.

    I found this article from the UK about UK house prices, gold, sterling and inflation; http://www.moneyweek.com/investments/property/uk-house-prices-in-ounces-of-gold-02110
    The most interesting stuff is in the comments section. My personal favourite is the "mars bar standard". The author writes;
    Can I just say as the originator of the 'mars bar' method of house price measurement. That the whole point is that mars bars, gold, shares, wages and houses etc have all inflated together.

    If everything including wages has/have gone up then there is in effect no bubble because relatively mars bars, gold and houses still in effect cost the same as they always have done ( in the case of houses factoring in that women now work ).

    Furthermore gold has no special place, apart from perhaps that it pays no income/dividend and in fact costs you money to store, compared to stocks gold has to rise by 10% a year just to stand still.

    My instincts tell me that gold and silver are in a bubble that has a litlle way to run yet. 

    Here is one perspective on the bubble; http://www.businessinsider.com/reasons-why-the-gold-bubble-will-burst-2010-10#

    Profile photo of fWordfWord
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    emptyvessel wrote:
    Usually by the time everyone is talking about buying something specific around the watercooler, the time has passed to get in.

    Precisely right. And this is why I so sarcastically questioned in a previous post whether anyone has actually already bought gold or silver. Looking at the graphs it appears the boat has long since sailed. I find it very humorous to read some of the posts here by the property bears who consider other alternatives to be better investments, or they would have bought property before a certain date and didn't. Or maybe they wanted to buy a certain share, or short the AUD at a certain SOMETIME.

    Trouble is, they 'wanted' to do so but didn't actually 'do it'. It's easy to talk about things that have occurred in the past. But it's harder to actually commit money and put your butt on the line to actually do something productive.

    Here's another point we should probably consider. If gold or silver, or some other commodity has had such a good run recently and property is actually starting to look comparatively cheaper, then it's property that is yet to see a boom, and the comparative investment has yet to see a bust.

    Profile photo of emptyvesselemptyvessel
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    fWord wrote:
    emptyvessel wrote:
    Usually by the time everyone is talking about buying something specific around the watercooler, the time has passed to get in.

    Precisely right. And this is why I so sarcastically questioned in a previous post whether anyone has actually already bought gold or silver. Looking at the graphs it appears the boat has long since sailed. I find it very humorous to read some of the posts here by the property bears who consider other alternatives to be better investments, or they would have bought property before a certain date and didn't. Or maybe they wanted to buy a certain share, or short the AUD at a certain SOMETIME.

    Trouble is, they 'wanted' to do so but didn't actually 'do it'. It's easy to talk about things that have occurred in the past. But it's harder to actually commit money and put your butt on the line to actually do something productive.

    Here's another point we should probably consider. If gold or silver, or some other commodity has had such a good run recently and property is actually starting to look comparatively cheaper, then it's property that is yet to see a boom, and the comparative investment has yet to see a bust.

    Agreed.

    Profile photo of MikeLewisMikeLewis
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    Unfortunately reigning in the growth states thru higher interest rates will punish the slower states but it may be a reality the way things are going. interetsing times, as they all are. It's different this time, just as every new day is. When any boom is in progress, there's always the "I can't see any end to it" mentality. Step back and think about it. It has to end – there's nothing surer. Nothing grows at extraordinary rates forever. You know, whether it be property or shares sometimes there are just no more buyers left to keep pushing prices higher. Then the music stops.

    Profile photo of fWordfWord
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    MikeLewis wrote:
    Then the music stops.

    And it will. But as surely as the sun will rise, the music will start again. Hence it is all called a 'cycle'. No boom or bust ever lasts forever.

    Profile photo of simplesimple
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    fWord wrote:
    emptyvessel wrote:
    Usually by the time everyone is talking about buying something specific around the watercooler, the time has passed to get in.

    Precisely right. And this is why I so sarcastically questioned in a previous post whether anyone has actually already bought gold or silver. Looking at the graphs it appears the boat has long since sailed. I find it very humorous to read some of the posts here by the property bears who consider other alternatives to be better investments, or they would have bought property before a certain date and didn't. Or maybe they wanted to buy a certain share, or short the AUD at a certain SOMETIME.

    Trouble is, they 'wanted' to do so but didn't actually 'do it'. It's easy to talk about things that have occurred in the past. But it's harder to actually commit money and put your butt on the line to actually do something productive.

    Here's another point we should probably consider. If gold or silver, or some other commodity has had such a good run recently and property is actually starting to look comparatively cheaper, then it's property that is yet to see a boom, and the comparative investment has yet to see a bust.

    How do one measure a value of the commodity or asset? We have no perfect etalon to measure with. Do not mention fiat currency please.
    So, if one to estimate current market value of something you have to compare it against basket containing number of valuables:  hourly pay rate/OIL/Energy/Gold/Silver/cost of food, add on as you wish. Measuring against average of other valuables you may get a somewhat reasonable indication of value of particular item.

    fword:
    Here's another point we should probably consider. If gold or silver, or some other commodity has had such a good run recently and property is actually starting to look comparatively cheaper, then it's property that is yet to see a boom, and the comparative investment has yet to see a bust.

    This is only the true between commodity/property  ratio. You cannot take it out and measure in fiat – you may not get the same result. In other words, at the moment property prices are still going down if measured in GOLD and may reverse soon. This does not mean that you will see rise of property pricing in AUD and it maybe THE GOLD loosing value instead. Therefore AUD/property will remain the same.

    Most people think simple, they short AUD – Real Estate. Average person on the street fail to see other options.
    To get ahead of he crowd one would want to short number of cycles to multiply gains:
    AUD – RE
    RE – Gold/Silver
    Gold/Silver – AUD
    Add on the combinations…

    More boom/bust cycles are going on at the moment, just need to research in to it.

    And as someone mentioned, evryone talks, but who HERE actually have any significant money in the game? I am in, with 90% of my savings in the game. Playing only  with what I can afford to loose.

    Profile photo of ksherwellksherwell
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    Hey guys I'm in Point Cook and some agents out here haven't had a buyer inspection in 2 weeks.

    2 weeks, I can't believe this.

    Profile photo of simplesimple
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    Sounds about right, ksherwell. Some one I know tried to sell IP in Brisbane, only few came to have a look over 3 months and only one couple considered to make and offer. He needed to discount too much to make a sale, so he pulled off the market.
    He is the lucky one, who do not really "need' to sell.

    Profile photo of fWordfWord
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    simple wrote:

    So, if one to estimate current market value of something you have to compare it against basket containing number of valuables:  hourly pay rate/OIL/Energy/Gold/Silver/cost of food, add on as you wish. Measuring against average of other valuables you may get a somewhat reasonable indication of value of particular item.

    Correct, and this is why someone mentioned (sometime back, and probably on a different thread) that it's not surprising to see property prices going up the way they have. Our hourly pay rates (don't know about you, but I did get a 1.9% payrise in my old job last year, after which I promptly resigned, got a new job and secured a 30% pay rise in the process), prices of oil, energy, gold, silver, cost of food etc have all risen to some degree in recent years and going by the news, our cost of living is set to go even higher.

    So, how can all these 'basics' get more expensive and property not? This statement is not directed at anyone in particular but I'm just trying to say it's hardly surprising that property is becoming more expensive as the years roll on.

    simple wrote:
    fword:
    Here's another point we should probably consider. If gold or silver, or some other commodity has had such a good run recently and property is actually starting to look comparatively cheaper, then it's property that is yet to see a boom, and the comparative investment has yet to see a bust.

    This is only the true between commodity/property  ratio. You cannot take it out and measure in fiat – you may not get the same result. In other words, at the moment property prices are still going down if measured in GOLD and may reverse soon. This does not mean that you will see rise of property pricing in AUD and it maybe THE GOLD loosing value instead. Therefore AUD/property will remain the same.

    Likewise I think the graph posted earlier is simplistic. It seems to suggest property is losing value in comparison to gold. Really, what it probably means is that property has not risen in price as fast as gold, and in so doing is in a bit of a flat patch or going through what the bears like to call a 'bust'. And this could be due to economic conditions. When economic conditions deteriorate and things are uncertain, gold of course goes up in value faster than property does. What I meant was that when this happens (as is happening now), then property has the potential to play a 'catch up' game in terms of value and potentially be in a position for more rapid price growth.

    simple wrote:
    And as someone mentioned, evryone talks, but who HERE actually have any significant money in the game? I am in, with 90% of my savings in the game. Playing only  with what I can afford to loose.

    Glad you are, and so am I, and a number of others here. But believe me, there's also others who just talk and sit on their hands.

    Profile photo of fWordfWord
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    ksherwell wrote:
    Hey guys I'm in Point Cook and some agents out here haven't had a buyer inspection in 2 weeks.

    2 weeks, I can't believe this.

    Point Cook…there are clear reasons why I never bought there. Little wonder now, looking at the state you describe it to be in.

    Profile photo of ChoirChoir
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    It is interesting to know people are now shifting their focus on gold and silver. To me, I still love my properties and had bought over $5m worth of properties last year and it is now a good time to buy when everyone is looking something else. As Steve always says, do thing differently!!! There are lots of bargins around if you have the money.

    The golden rule does not change – investing property is the way to go – I mean for the long term. Who cares about shares and other metals in the ground. These are for the gamblers. At the end of the day, property value always gets doubled in 7 – 10 years. I have not seen any property close to CBD area has decreased in value over time.

    Profile photo of emptyvesselemptyvessel
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    Choir, I am aiming to emulate your success.

    For my part, I am about 73% LVR'd into the "game" across my entire portfolio. About 50/50 property and equities. Then various diversification splits under these. Likely to go 70/30 property and equities over the next couple of years.

    Wish I got into gold 10 years ago. But I wish I got into property 10 years ago WAY more. Property I can leverage the hell out of. Gold I can't. No matter how "standard" gold is, the bloody banks won't give me a 80% LVR on it to buy more gold. Damn unreasonable of them I reckon.

    And another minor gripe –> They won't recognise the income I receive from renting out my gold! And for some reason, no matter how long I wait, the rent on my gold doesn't seem to increase.

    My missus likes to wear gold. It's real purdy.

    Profile photo of emptyvesselemptyvessel
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    MikeLewis wrote:
    Unfortunately reigning in the growth states thru higher interest rates will punish the slower states but it may be a reality the way things are going. interetsing times, as they all are. It's different this time, just as every new day is. When any boom is in progress, there's always the "I can't see any end to it" mentality. Step back and think about it. It has to end – there's nothing surer. Nothing grows at extraordinary rates forever. You know, whether it be property or shares sometimes there are just no more buyers left to keep pushing prices higher. Then the music stops.

    Flipside: When any bust is in progress, there's always the "I can't see any end to it" mentality. [And that is what fuels the bust. Markets are driven to extremes by emotion.]

    I cannot understand, under any circumstance, why someone would want to fuel the bust with more negative sentiment. No matter how factually correct you are, it can only be a bad thing, for everyone. Who exactly is it helping and how?

    Infinitely better to fuel the positive sentiment and the prosperity boom, under all circumstances. [This doesn't mean taking stupid risks. Rather, being incredibly positive about the future]. Rose coloured glasses are best kept securely on and in 20/20 focus.

    Profile photo of Johnny1974Johnny1974
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    Hi all

    Just my thoughts……
    I to agree the world financially is pretty toxic at the moment and has been since 2006. Seems everyone, every sector, in every country is being hit hard. The only shining light is the worldwide mining industry.

    We have strategically sold down our portfolio of six properties to two since 2006. Taken the profits and walked away :)

    We now have no debt, work less, have less stress. Hard work and property gains have enabled us to do this. For now I will keep all that cash fixed at 7% in the bank, don’t have to worry about tenants, rates, insurance, repairs and the possible removal of negative gearing tax breaks.

    Maybe its time we all looked at other avenues to invest?

    mattnz
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    emptyvessel wrote:
    Choir, I am aiming to emulate your success.

    For my part, I am about 73% LVR'd into the "game" across my entire portfolio. About 50/50 property and equities. Then various diversification splits under these. Likely to go 70/30 property and equities over the next couple of years.

    Wish I got into gold 10 years ago. But I wish I got into property 10 years ago WAY more. Property I can leverage the hell out of. Gold I can't. No matter how "standard" gold is, the bloody banks won't give me a 80% LVR on it to buy more gold. Damn unreasonable of them I reckon.

    And another minor gripe –> They won't recognise the income I receive from renting out my gold! And for some reason, no matter how long I wait, the rent on my gold doesn't seem to increase.

    My missus likes to wear gold. It's real purdy.

    You can leverage into gold at 50:1 leverage or higher if you wished, just buy gold through an online broker.

    Profile photo of emptyvesselemptyvessel
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    mattnz wrote:
    emptyvessel wrote:
    Choir, I am aiming to emulate your success.

    For my part, I am about 73% LVR'd into the "game" across my entire portfolio. About 50/50 property and equities. Then various diversification splits under these. Likely to go 70/30 property and equities over the next couple of years.

    Wish I got into gold 10 years ago. But I wish I got into property 10 years ago WAY more. Property I can leverage the hell out of. Gold I can't. No matter how "standard" gold is, the bloody banks won't give me a 80% LVR on it to buy more gold. Damn unreasonable of them I reckon.

    And another minor gripe –> They won't recognise the income I receive from renting out my gold! And for some reason, no matter how long I wait, the rent on my gold doesn't seem to increase.

    My missus likes to wear gold. It's real purdy.

    You can leverage into gold at 50:1 leverage or higher if you wished, just buy gold through an online broker.

    Good to know. I am intrigued to understand this as a path better;
    Is there a way for me to rent it to another investor for a yield?
    Will the bank recognise this yield? (I bet the taxman will)
    Is there a way for me to "add value" to the gold? (I suppose they would send me some of it and I could put a diamond on it and sell it down the markets. At which point the taxman takes at least a third of my gains, damnit.)
    Can I take that leveraged gold and use it as security on purchasing more leveraged gold? (Without selling it and incurring CGT. Cause that CGT is just a killer)

    Profile photo of emptyvesselemptyvessel
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    Johnny1974 wrote:
    Hi all Just my thoughts…… I to agree the world financially is pretty toxic at the moment and has been since 2006. Seems everyone, every sector, in every country is being hit hard. The only shining light is the worldwide mining industry. We have strategically sold down our portfolio of six properties to two since 2006. Taken the profits and walked away :) We now have no debt, work less, have less stress. Hard work and property gains have enabled us to do this. For now I will keep all that cash fixed at 7% in the bank, don't have to worry about tenants, rates, insurance, repairs and the possible removal of negative gearing tax breaks. Maybe its time we all looked at other avenues to invest?

    Nice, well done. I would love to have that much cash. I am guessing inflation doesn't factor much into your strategy for now?
    Strongly suggest you do look at those other avenues. I have been doing them for years and haven't done quite as well as you have with property. That said, made much more than I lost, which is doing pretty good.

    Profile photo of fWordfWord
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    emptyvessel wrote:
    Johnny1974 wrote:
    Hi all Just my thoughts…… I to agree the world financially is pretty toxic at the moment and has been since 2006. Seems everyone, every sector, in every country is being hit hard. The only shining light is the worldwide mining industry. We have strategically sold down our portfolio of six properties to two since 2006. Taken the profits and walked away :) We now have no debt, work less, have less stress. Hard work and property gains have enabled us to do this. For now I will keep all that cash fixed at 7% in the bank, don't have to worry about tenants, rates, insurance, repairs and the possible removal of negative gearing tax breaks. Maybe its time we all looked at other avenues to invest?

    Nice, well done. I would love to have that much cash. I am guessing inflation doesn't factor much into your strategy for now?
    Strongly suggest you do look at those other avenues. I have been doing them for years and haven't done quite as well as you have with property. That said, made much more than I lost, which is doing pretty good.

    To a certain extent, this demonstrates people in different stages of their 'investment career'. In one of Michael Yardney's books, it talks about these 'stages'. In an investor's early life they are in the process of 'acquisition', growing their portfolio, while towards the end they put their portfolios through a stage of 'consolidation', selling down to take profits or otherwise convert a 'capital growth' portfolio into one of massive positive cashflow.

    So obviously neither is the right or wrong choice. It depends on where each individual is in their 'investment career'. With that in mind, I am personally in the stage of acquisition, but when ready to retire, I will similarly perform consolidation. Of course, depending on your outlook for a particular investment, you could go against the grain of your own plan, temporarily at least, to realise greater fortunes.

    Truth is, everyone wants the money without the associated stress of ANY form of investment. But you've got to start somewhere and it often means doing the hard yards first and enjoy the fruits of your labour later.

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