The real-estate herd marches on trampling first home buyers in there wake and buying anything that looks like a house, with big gains in values in all capital cities.
Why are we near the top of the list of the worlds most unaffordable places to live?
What's so special about us?
18 months ago I was in San Francisco for work, noticing in the Bay area, you could buy good size house of similar proportions, cheaper than you could buy in Albury in $US terms.
This can't end well, are we really a better place to live? do we have better opportunity? better growth prospects?
Some serious questions need to be asked.
http://www.news.com.au/finance/real-estate/sydney-is-third-least-affordable-city-for-home-purchases-according-to-global-study/story-fncq3gat-1227189742612
Begs the question, are they all mad, and suffering from Extraordinary popular delusions and madness of Crowds", http://www.amazon.com/Extraordinary-Popular-Delusions-Wordsworth-Reference/dp/1853263494
Or are they worried about something else, is this a scramble for tangible assets a manifestation of mistrust of the financial system?
Are they concerned that the sheer amount of cash poured into global markets, means inflation must be coming soon, or lets get hold of something.
Seems to me a lot of the SMSF herd are thinking this way, although I don't think they are that smart, they just don't want to own bonds or stocks, had a gutful of them! little return and plenty of risk.
But probably a good time to get out of some residential real estate and buy a few more shares with some growth potential, even if we don't get a collapse of the housing market, hard to see much real growth, regardless of Joe Hockey's ridiculous comments of getting a good Job, not many of our Children will be lucky enough to earn enough to pay 2 to 3 million Dollars for a house, I think Mr Hockey might be delusional, along with the Self managed superfund mob!
Begs the other question of course, why aren't they buying gold, you would think the Greek circus would also help this, but doesn't seem to be.
And the Greeks are broke, no chance of getting out, without assistance, whose kidding who!!
but apparently they only account for roughly 1.8% of the regions output, so a default probably factored in, but im not sure if its going to end well, everyone might take their bat and ball and go home and stop lending to each other, GFC mark 2.
I could be delusional myself of course, but the weakness in stocks is
probably another good buying opportunity.
Gets us back to deep value investing, we will probably see further softness in stocks but we need to look at companies that we are prepared to hold for a long time that will look cheap in 5 years.
Maybe gold is an area we should look at, and some gold companies may be deep value now if the barbaric metal has another run, when Greece defaults, and it will, things could get interesting for gold, but probably test new lows first.
Our money and value system has become grossly distorted, with real value now difficult to distinguish.
I still prefer companies like REA, SEK and CAR because of the cash they generate.
but maybe a few gold stocks with low production costs are worth accumulating.
Purchased some IGO, as per previous comments.
Maybe gold will be the next asset class the SMSF herd goes for, if they think its a long term haven?
Certainly there wont be any reason or science to it, it will just tangibility of the asset that will be catalyst, and could come out of the blue.
But who knows, I certainly have no idea, but think a few gold stocks are worth looking at.
interesting to note, out of a watch list setup last October, if you had owned NST
EVN and NCM and forgotten the rest you would have done very nicely.
So we need to be careful.
Probably should buy some more REA, they have certainly taken a hit, see performance page.
but has plenty of growth potential in Asia I feel, some of the others like MTS , I need to have a serious look at.
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