NZSX50 - Good News!

[Merc]

Knowledge is power, and I have gained vast insights into markets over the past 2 years as well. I feel I am at a great advantage compared to 98% of people in my age range and am set up for the future, with the sky the limit. The best thing you can do is acquire that knowledge at the earliest age possible.

Absolutely. But with two years experience - just remember that there are cycles and there are cycles and also cycles within cycles. There were hot and cold days during the Ice Age.

In your 20s you can take far more risks than you can when in your 50s as time is on your side.

Also remember the Elliott Wave Theory.

For the last month or two I've been reading, analysing, ghostly trawling through here (and getting some great tips!) and bought two lots of shares. As my investments are more about learning than creating mega wealth (although I wouldn't say no to this bonus!) it has been $3,000 in each company. Current plan is for 2 more for similar amounts within the next month or two. Haven't figured out which ones yet but into analysing cycles first.

[Merc]

.... I have been trying to warn colleagues and friends off buying a house/land over the past few months ...

This landlord holds opposing views

Short term bubbles can burst, long term it is the best investment ever made. Yes interest will go up so fix for longer terms! Personally I believe in mortgage averaging - splitting the loan into chunks that expire at different times.

MacDonalds invest in real estate, hamburgers merely pay the rent; Rymans invest in real estate and use...<think about it> to pay the rent.

There are around 12 identified factors that affect the housing market but the biggest is supply and demand - which is why Auckland and Christchurch have taken off big time. Other towns follow when those who are struggling finally get the message they can have a better life style with more available cash if they move there.

The solution to the current Auckland market isn't for an increase in building but for a large bunch of Aucklanders to move elsewhere. They can start with one of my tenants who I will happily donate to the cause! Lower rent elsewhere would increase their disposable income thus allowing them to pay their arrears faster. As they seem to have issues with working it would also help the taxpayer through a drop in their accommodation supplement.

[Merc]

...EDIT: Oh and the other 10 factors you mentioned, I'd be really interested in as well.
Cheers

There is a chart in one of my books, but a quick scan shows it probably isn't in the one I thought it was.

One that I remember was low bank interest rates. People diving in because the figure stack up NOW without factoring in that they change.
Once rates go up some will not buy and/or sell, others will commit and over extend themselves. Immigration was another. The others were similar things that affect supply and demand.

Solving the Auckland crisis? With the population expected to double in, what was it - 20 years? it means more houses. Upwards, infill or outwards. By which time the roads will be totally bottlenecked and people will be sleeping in their cars in the office car park to get to work on time (if they aren't already)!

Seriously - solving the housing crisis involves other towns setting themselves up as ideal destinations with plenty of jobs. Hamilton, Tauranga, Napier... all have the mass and infrastructure to be able to do this. But I can't see this happening over night or in the near future.

Years with 7s in them tend to have been the historical peaks but of course cycles can compress or extend so don't bank on 2017 being the peak in the current climate. I'm sort of using it as a guide but will be watching closely

[enzed staffy]

The government needs to remember theres more to NZ than just Auckland. Supporting other regions would at least start helping "other towns setting themselves up as ideal destinations" instead of strangling them at every turn - Dunedins Hillside work shop closures come to mind - we gave the contract to the china cos they were a little cheaper and twelve months later we were repairing every wagon they made at the cost of millions.
meanwhile hundreds lost their jobs.
Selling out our companies to overseas buyers for short term gain another - FPA comes to mind - what do you know another kick to Dunedin. I'm sure other regions have similar stories.
We need to take a bit more pride, accept a little less profit , to maintain our jobs and skills in NZ- they won't come back.
The rest of the country is not uniformly benefiting from the housing boom in Auckland, or the capital gain even if their preferred investment is housing

[enzed staffy]

I'm not nearly as jaundiced as that sounds

[troyvdh]

Dear turmeric...I could well be wrong here ....its my belief that what JK was saying was that there was (and this my take of it) a definite pattern of companies choosing to relocate their headquarters in Auckland ...and I suppose that JK is a believer in "Less government" is the way to go then Is he actually wrong in that should the nats win again...there may well be a diminishment of public employees.....having said that I recently rode around Wellington....Island bay and all...and thought it was fantastic....a real joy on a sunny day......cheers

[janner]

Key himself said on radio tonight.. In reference to the GCSB fiasco .. "Every thing we do is outside of the law "..

10pm 1zb..

[Merc]

... EDIT: Oh and the other 10 factors you mentioned, I'd be really interested in as well.
Cheers

The book was "Grow Rich with the property cycle" by Kieran Trass

Kieran is the one who has heavily promoted the Property Clock. Time for a reread as although it is a property book shares fit in to the cycle too.

An investment course I did years ago showed how all investments inter-relate. e.g. when all is gloom in other investments people stockpile gold - which promptly pushes the gold price to new levels. And when property hit the heights in 2007 then crashed but the maths still didn't work the investors quietly turned to shares.

Factors include:
DEMOGRAPHIC
- population growth
- Property vacancy rates
- Employment
- Property construction
- No of people per household
FINANCIAL
- Property ROI
- Rents
- Incomes
- Property Finance Availability
- Gross Domestic Product
- Property Values
- Property Affordability
EMOTIONAL
- No of days to sell property
- Gentrification
- Property Listings
- Property Sales

[CJ]

Question: has Kieran Trass grown rich?

I think he did very well for himself but then went a bit crazy and become a supporter of Hubbard saying he was being unfairly treated (despite costing the Govt $700m+)

One of his trainees is also doing well and is now president of APIA.

[MAC]

I’d like to say that I’ve appreciated a lot of the discussion on this and other threads in regard to whether we are encountering a bull market correction or a bear market reversal. Complements to you all.

I understand secular and cyclical market technical’s, the average age of bull markets, and the age of this bull market. But, when I spin around I do not see the exuberance required to catalyse a reversal to a bear market. I’m not suggesting that there aren’t issues out there, or over the horizon, but at present it feels to me to be more like 1984 or 2005 rather than 1987 or 2008.

1986: My flatmates were having a pissing contest over how many brierly shares they had accumulated on their credit cards. In what seemed like a short duration every set of traffic lights in Wellington where I was living suddenly had a shiny new BMW. It was clear to a lot of us that this was not going to last.

2007: I was living in Auckland, young folk in my office were buying new homes with 5% deposit, smoko room discussion was how to buy self-funding rental properties, and remember all those property development shows on TV. Again it was clear it wasn’t going to last.

I’m just a humble observer of life trying to understand the view of others, and perhaps I am missing something.

Can those with a bear view convey to us all which market they feel is about to burst and what signs of extreme exuberance you feel are manifesting in making a bear market assessment at this time ?.