What's going to happen to the property market?

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Permalink Reply by Bandwidth on August 11, 2008 at 23:47

Hello Lisa

Rivkin targeted low liquidity companies and drove the prices up and down. Also he bought or sold prior to making announcements in his newsletter. Even the size of Rivkin would find it hard to have a great influence on the high liquidity shares as the market tends to self balance. As a share trader this sort of activity can, in most cases, become quite obvious. I can see the bid and offer bundles and get a feel for this kind of activity.

Most of these schemes rely very much on "A fool and their money are easily parted.

Where the mags have an influence on the market I don't think they can drive a boom suburb. I would not consider a person making a property decision based on the latest "up to the minute" research an investor. These people are normally the ones who buy at the top and sell at the bottom. My view is to get in early to the straight part of the S curve. That is after the pioneer stage but before the hype. My view is that when everyone wants to buy then sell and when everyone wants to sell buy. This applies to property and shares

When I see a "boom" suburb in the press I look at the surrounding suburbs. I also look at where woolies, coles etc are building.

When all the military unrest escalated I bought in Darwin and Townsville near large military bases. Also Darwin was the potential landing point for the East Timor Natural Gas, this I found out in the share market. Townsville was a target for major lifestyle development and Govt funding, once again info from share trading.

Yes there have been a number of insider trading cases, filed by the ASX and the ACCC with a number of succesfull prosecutions. There are rumours around at the moment of some cases. In fact I think there has been a case made public recently. No google yet :-)

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Permalink Reply by Karen on August 11, 2008 at 21:55

Hi Lisa,

Yes, it can be annoying that there are differing opinions, but I find it more annoying that the banks, real estate agents and real estate bodies (like the REIA) have such a voice in articles about the property market when it's so obvious that they are completely biased. What real estate agent is going to admit the market is completely stuffed? And the national and state real estate institutes exist only to push the property market, so they're not any help either. Yet they are quoted consistently as "experts", spouting out the same bullish nonsense.

Basically I ignore anything coming from any of these sources, but that's easier said than done because it's not always so easy to differentiate. For example the magazine Qld Property & Lifestyle looks like a property mag, but is run by the Real Estate Institute of Queensland - the representative body for real estate agents in Qld. Love you to find a negative property story in that mag...

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Permalink Reply by Bandwidth on August 11, 2008 at 22:25

Hello Karen

Taken in context the property magazines give another view of the marketplace.

Taking a number of different ideas and building a picture is how I analyse whatever market I am interested in. If I know the article is going to have a positive bias then I can take that information in the correct context. The greater danger is when the bias of the article is unknown.

I think you are going to find it very hard to find article that will tell you what not to buy in the property market. As you say most of the articles have some connection to people with a vested interest and we as investors just need to take that on board.

BTW thanks for your comment on Eureka

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Permalink Reply by Lisa on August 11, 2008 at 23:25

Ditto, Karen

I would definately recommend to take opinions with a grain of salt from the most obvious (ie. banks R/E's, mags) etc.

Agree, Qld mags will never say anything negative about the Qld property market, but for those who have researched and decided Qld is the place to be, the info is pretty important... friends of mine moved from WA to Qld recently, and the info was imperitive!

Not necessarily so for the investor!

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Permalink Reply by Bandwidth on August 12, 2008 at 10:11

Hello Karen

Yet another view on the market is by Jenman, while I don't always agree with some of his views and/or tactics his site presents another view to be taken in context

http://www.jenman.com.au/

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Permalink Reply by Bandwidth on August 11, 2008 at 10:56

Hello moonbuggy

Thanks for your advice, experience is worth a mint :-)

I tend to do my own research, rather than newsletters.

In the share market I use purely technical indicators and read the articles out of interest. I don't make trading decisions based on what I hear or read.

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Permalink Reply by Bandwidth on August 11, 2008 at 11:00

Hello moonbuggy

I don't believe any articles and or newsletters are fully independent, everbody has an opinion and or bias. I read all articles with this in mind.

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Permalink Reply by moonbuggy on August 11, 2008 at 11:28

True Bandwidth, but sometimes this bias can be more pronounced than others!

I reckon you've actually got to look out for your own biases more than anyone else's - particularly confirmation bias (looking for info that concurs with your preconceived set of ideas), which can be very costly. I know first hand and this is a battle I fight all the time.

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Permalink Reply by Bandwidth on August 11, 2008 at 12:07

Good point

One thing I have learnt in life, doing strategic planning, global systems design and share trading, is to hold off judgement as long as possible. I find this keeps my mind open to different paths.

In investing it is far more important to make money than it is to be right or wrong. Confirmation bias is all about being right.

My view is if I am wrong I am sorry then move on.

In share trading any decision I make is valid at that given point in time. The decision paramaters then change over time so my original decision is neither right or wrong, only different. This helps me cut losses and run with profits.

Our education system teaches us that if our thoughts differ to what the system believes we are wrong and we need to "learn" what is right. In other words comply with the system as it is right. If we question the system we are tagged are "difficult", "noncompliant" or unruly"

In share trading I follow my system faithfully and if things change then the system may need to adapt so I review and test the system. This is opposite to what we are taught.

The system teaches us either/or rather than probability

Have you read any of Van K Tharp books they are good on breaking bias

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Permalink Reply by Karen on August 11, 2008 at 21:57

I've heard the same bad things about Eureka Report moonbuggy!

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Permalink Reply by Bandwidth on August 11, 2008 at 10:18

Hello All

Found an interesting article on the credit crisis that may interest the community

A foolproof guide to the credit crunch
By Nick Gardner August 10, 2008 03:05pm

http://www.news.com.au/business/money/story/0,25479,24156839-501731...

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Permalink Reply by Bandwidth on August 13, 2008 at 9:22

Another pressure on the housing market

Public housing feels the squeeze

http://www.news.com.au/business/story/0,27753,24173404-31037,00.html

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