Scary stuff

I can tell you what I know for sure and that is I haven't got a clue.

I've read opinions that state the market will continue up, that it will continue down, that it will be 10yrs of a choppy market, property prices will continue up, down, flat, buy gold and have loads of cash, a recession is looming or maybe its a depression, China won't be able to handle their economy, oz economy is robust etc etc etc.

I also know that I bought my IPs in qld in late 2003, apparently the peak of the market when I shouldn't have bought. My rents are up 25% and the current vals are approx 36% up.

I know I have neither the time nor the indepth knowledge or ability to keep abreast of every opinion and change regarding the world economy.

In other words I don't believe I can be one step ahead of it all. I could react, but I won't be acting before anything occurs, because I won't know what to do or when.

So what do I do ?

Well, my investing plan is based on the long term. Its based on those 20 yr charts you see of property and shares and how they perform in the long run. So I am conservative and make sure that I'm not too stretched, that I can handle some negative returns, that my lvr is not right on the limit ( my margin loan stepped out to 57% at the peak of the recent correction from 52%) that I can handle interst rate rises within reason before I have to start liquidating assets to protect others.

And so I may take a little longer to get to where I wanna be, I may not be able to afford the ferrari but there will always be someone with more than me so I focus on not competing with others, rather I focus on my own goals and what I need to achieve for me and my family.

So I don't know what may happen in the future. I'll be sitting tight, monitoring my position to keep in touch. I will value future asset opportunities based on yields and prospects for growth and future earnings. I won't be trying to time the markets.

And if the depression comes and I've stuffed it all up, at least I've got an old landcruiser me and the family can live out of

 

Perfect !

The old adage 'get rich slowly' keeps life in perspective.

Take a long term view & invest your assets so hopefully they are better than inflation-proof without being too risky for your comfort zone.

Then get on with your life.

A perfectly valid investment approach - and a philosophical one that lets you sleep at night.

Now I am waiting for a come-back from some hair-trigger, stop-lossed, margin-called, sleep deprived, obsessive day trader to tell me that I have it all wrong.

Keep up the good work brother !

PS My bike is a 1956 Ariel Square Four - which is appreciating a lot faster than my other investments over the last 10 years !!

 

Hey Rob,

One thing I have learnt about myself during this investing gig is that I tend to over analyse over think things which has a tendency to make me worry.

And when I got something on my mind that's worrying me I find it unpleasant and hard to enjoy myself unless I can focus my mind on something else.

This approach to investing lets me do both, I don't worry anymore. It suits me and I'm happy with that.

As I advised a mate, "yeah it aint fool proof but its got a lot better chance of success that what you're doing ie nothing !!!"

Ps get a piccy of yar bike on yar avatar, we mite just out number the car drivers yet !!!!!

 

Nah!

Like your strategy mate, I'm just more leveraged as I have a 2015 deadline to be out of the ratrace and financially free. That needs a whole chunk of net worth and a heap of passive income. I'm not going to get there without taking risks, so I tend to watch the markets and their drivers a lot more closely. Whether I'll be able to spot a major turning point before it happens is a whole other question. In all likelihood I'll miss it and have to ride it out and just put those 2015 plans back, unless of course it happens AFTER I've made it to where I want to and scaled back my risk profile to negligible as planned...

Cheers,
Michael.

 

Perfectly valid.

You form an overall investment philosophy.

This is the basis of your strategy.

Sure, you review your plan in light of changing market conditions.

BUT MOST OF ALL you have a plan & don't blow hot & cold on being in the market on a daily basis. That just ends up with worry, large fees and heaps of CGT which could otherwise have been compounding growth.

Cheers,

Rob

 

Hi Dr. Lobster,

Great post, fantastic even! There are a number of people on here who could learn a lot from what you've written.

Mark

 

Look at this, market running again..

As I said many times before, last few weeks was a perfect entry point..

I'm now enjoying quick profits on my purchases

Michael, since your so worried about this sub-prime problem, I assume your using this opportunity to get out of the market?

 

Thanks Dr Lobster, great post.

 

Warren Buffet is spot on when he said sharemarket behaves like a manic depressive. We had panic selling and doom and gloom and a week later people seem to have forgotten it.
I didn't buy or sell anything during the mini crash because I thought the problem would be around for a while (over a week at least!!). I still believe that we will have further sub prime news and hedge funds in trouble.
Having to say that some of the stocks like AFG like were selling at bargain prices. Should have bought some.

Andrew Mohl thinks bank will also have exposure on sub prime lending.
AMP profit soars 35pc, CEO quits | NEWS.com.au Business

 

Good attitude mate.

I guess for all of us, getting the right balance between 'analysis' and 'over analysis' can be a fine thing at times.

I know personally that I've implemented certain 'risk minimisation' measures that in hindsight may not have been required but then in other situations I haven't implemented these measures soon enough and paid the price.

How do we get it right? Like many things in life, I guess it's a combination of education and experience. What's right for one individual at a certain point in time, may not be right for another individual.

 

At what point did you stop reading my posts?...

 

Thank you for the positive comments. I feel inspired now, you may have created a monster.

 

To Michael Whyte,

(With all respect, because I am a long time lurker, infrequent poster)

This thread is getting fairly tedious. The thrust of your posts is that Navra should be doing a..b..c rather than x..y..z because it would suit your own individual circumstances.


The whole idea of MF's is that they are "set and forget" investments. If you want to micro manage them on a daily basis and think you can do better then maybe you should look at direct share holdings, instead of paying Navra to do it for you. I have never seen a MF more micro analyised on a minute by minute/ day by day than this one.

For me personally Navra is great, high yield distributions every quarter, helps fund other investment debts. CG is b*gger all, but hey, its an income fund, I knew that when I bought in and thats why I did. I've done multiples better in CG through my direct share holdings.

Navra is a big part, but only " one part" of my overall strategy. The last thing I'm going to do is worry about managing the managed funds I hold. I'm pretty sure of the response I would get if I wanted to meet with Kerr Neilson and tell him how he should run his funds ( which I am also invested in at 80% of my holdings in Navra)

 

Back on topic...

Here's another link to some scary stuff if you're interested.

Desperate Measures For US Fed As Treasury Yields Scream for a Interest Rate Cut :: The Market Oracle :: Financial Markets Forecasting & Analysis Free Website

I considered not posting this given how far off tangent this thread went, but maybe this will bring it back on topic. If not, I promise to let the thread die of neglect from here on in...



Cheers,
Michael.

 

A lot of people blame carry trades FED and others injecting cash and lulling everybody into a false sense of security.
One insider said :
This is a gaping wound with a bit of sticking plaster put over it.....

 

And this is precisely the reason I wanted to debate this issue in a bit more depth. But I better be careful doing so on an investment forum, as sometimes you just get beaten up for being Henny Penny.

But if you can't discuss potential risks here, then where can you?

Again, I re-iterate, that this has the "potential" to be bigger than currently believed. On current performance it seems the fed will be able to pull another sticking plaster out of its hat. But unless I know the underlying drivers of global economic performance and the potential implications of a once in a lifetime dissolution of the global economy, how can I know that a leveraged position is still appropriate to my strategy?

I'm not about to jump ship just yet, but I'm not about to close my eyes and blindly presume the world will continue on into the future as it has done for the last several decades "because it always has". Extrapolation without understanding the environmental drivers is naiive investing IMHO.

I'll just keep reading what I can and probably limit my discussion of the risks a bit more. I might have to form my own conclusions in isolation...

And thanks for the ongoing posts Tropo on the "actual" topic. I find this stuff very interesting. Can I suggest to those that don't that they just ignore this thread? Well, maybe a vain hope...

Cheers,
Michael

 

"I'll just keep reading what I can and probably limit my discussion of the risks a bit more. I might have to form my own conclusions in isolation..."

Michael,

I would be careful. Reading too much gloom-doom stuff may be very destructive.
Rational and logical thinking is the only way to go.
Do not forget that all those gloom/doom writers are making a lot of $$$$ writing stuff you are reading.
Sure, a lot of them may well be correct. But too much information may damage your brain, so try to be very selective.
And yes.....ALWAYS form your own view...the only way to survive in the market and in life.
If you are stuck at some point try to apply my tested filter such as: ground chilies, pepper, KFC and roasted bananas.

One more... BE >>> 27h/day & 10 days/week.
Have a good one my friend!

 

Michael I'm not usually one to get personal but I must say that I think you risk not being beaten up for being a 'Henny Penny' but because in the space of a couple of weeks you've gone from wanting to gear yourself up to your eyeballs (see http://www.invested.com.au/31634-post6.html and
http://www.invested.com.au/30606-post4.html)
to suggestions of a "once in a lifetime dissolution of the global economy".

Now sure, if circumstances change the plan should change, that's sensible. But shouldn't the plan be robust enough to cater from left of centre events whether it be bird flu or terrorism or tsunamis or American mortgage defaults?

Props to you if you decide to sell your equities, pay the CGT if applicable, pay the re-entry fees down the track and buy back in at a cheaper price, but the Dr Lobster's of the world that take a step back from the noise and invest less mental sweat into the mix I believe will be most rewarded from the turbulence we're going through.

 

Hi Glebe,

An excellent point and pretty much the reason I enjoyed Dr Lobster's post.

Mark

 

Fair cop.

Just a bit bored at the moment so have too much spare time on my hands. I wish they'd hurry up and approve my DA!



But it is fun reading all this stuff don't ya reckon!

Still haven't changed my strategy, just love reading it all and "what if-ing". I'm 90% certain, make that 99% certain, that this is not the end of the world, but it sure is fun extrapolating and hypothesising don't ya reckon?

Or am I on my own here. Too much effort, too little return... But then I'd just be bored again...

Ah well, no sweat. I'll drop this discussion and just keep reading all this bedtime material in my own time. I'm really suprised though that even hypothesising that this might be serious is dealt with so harshly on here. As I stated earlier, surely this is the best place in the world to bounce the concept around? It seems people take statements far too literally and conclude I'm jerking my strategy which demonstrates I have no real clear idea of what I'm doing.

If you want to know what I'm actually doing then its the following, as always:

1. Still actively invested in the ASX with a big amount.
2. Still pushing for DA approval on my development site and lining up $1M in finance from my bank

None of that has changed.

If you want me to just post soothing well dones on other's achievements, and updates on my actual personal investment actions I can do that. I personally enjoy all the what-ifs, devils advocacy, counter arguments and crystal ball gazing too. It gets very boring just reading what people have actually done or are doing.

Cheers,
Michael.