Call it faith or call it heuristics. If we analysed everything we did, it would be knockoff time before we got though the morning crap.
It works until it doesn't.
Talking of Risk Management, have you had a look at "The Top Ten Operational Risks: A Survival Guide for Investment Management Firms and Hedge Funds" by Holly Miller et. al. It is a really good book to have in the crapper because each essay is about the length of the average crap, and in fact many of them will help you with those difficult movements.
Catweasel say yes, but if it consider that most the mouse have strong belief in to be a risk averse, which one of cornerstone of mouse house speculate. That a why it witness global meltdown because mouse pile into what it perceived to be risk-free appreciate. That the why whole analytical industries do the exist.
Only solution is to embrace a risk whole the heartedly. But it a easier said than done.
Catweasel say yes, but if it consider that most the mouse have strong belief in to be a risk averse, which one of cornerstone of mouse house speculate. That a why it witness global meltdown because mouse pile into what it perceived to be risk-free appreciate. That the why whole analytical industries do the exist.
Only solution is to embrace a risk whole the heartedly. But it a easier said than done.
For once I both understand what you are saying and agree 100%. There is no surer way of losing out than only going for the sure thing.
I think there are many people who don't enter the property market because they think they might lose money. I say: If you don't think you might lose money, then you have done all the work of a confidence trickster on yourself.
Mind you, I am all ears for anyone who can offer me risk-free return. I have this collection of bridges.....
We have a loooong way to go before we would approach that point; the average new mortgage is just under $300k, with the average FHB mortgage a bit less than that again at around $290k.
That figure sounds good (depending on your point of veiw) but it's also a loooong way short of the median. Makes you wonder why people haven't been piling in hand over fist.
Actually, I seem to remember it being a reasonabley popular veiw among the bulls on this forum a couple of years ago that house prices would average a million dollars by 2020.
The question of "why is it taking interest rates to fall toward multi-decade lows in order to spur some revival in housing activity" is best answered with "prices became too high at more normal rates of interest to be able to sustain solid, consistent growth".
It is 100% logical that the price of something cannot continue to grow exponentially forever. Iron ore miners, coal miners and housing vendors have all had to face this reality.
That figure sounds good (depending on your point of veiw) but it's also a loooong way short of the median. Makes you wonder why people haven't been piling in hand over fist.
Actually, I seem to remember it being a reasonabley popular veiw among the bulls on this forum a couple of years ago that house prices would average a million dollars by 2020.
The question of "why is it taking interest rates to fall toward multi-decade lows in order to spur some revival in housing activity" is best answered with "prices became too high at more normal rates of interest to be able to sustain solid, consistent growth".
It is 100% logical that the price of something cannot continue to grow exponentially forever. Iron ore miners, coal miners and housing vendors have all had to face this reality.
every bull on here has stated the market is cyclical. it's as if bears don't hear us when we say OVER THE LONG TERM, prices rise.
I am the love child of Tony Abbott and Pauline Hanson
That figure sounds good (depending on your point of veiw) but it's also a loooong way short of the median. Makes you wonder why people haven't been piling in hand over fist.
Not really - the median dwelling price across all of Australia is around $400k. FHB numbers for obvious reasons are weighted toward places that are below median price (which is 50% of all property after all). Most bears focus too much on the prices of inner city and beach / harbourside Sydney and Melbourne property I think - markets which will always be out of reach to a large proportion of the population.
Quote:
It is 100% logical that the price of something cannot continue to grow exponentially forever. Iron ore miners, coal miners and housing vendors have all had to face this reality.
Just because there are short term booms and busts in the prices of some commodities driven heavily by global supply and demand, that does not mean that values of local assets based purely on an abstract concept like money, which is deliberately deflated in value every year, cannot rise at an average % rate every year over long periods, for ever. That is exponential growth in house prices, and it's been going on for at least the last 150 years and longer. It will continue to do so while we have anything resembling our current monetary system in place.
every bull on here has stated the market is cyclical. it's as if bears don't hear us when we say OVER THE LONG TERM, prices rise.
But it was rapid appreciation over the shorter term that turned the basic human need for shelter from the elements into such a popular vehicle for asset specuation.
Property investment has always been around and always will be. But without ever-lowering interest rates, it will go back to what it always was: a long term proposition.
That figure sounds good (depending on your point of veiw) but it's also a loooong way short of the median. Makes you wonder why people haven't been piling in hand over fist.
The average loan size has always been well short of the median house price. The average loan size has been around 60% of the median house price since at least 1975. FHB's tend to buy below median price properties. It's always been that way. Somebody has to buy the cheaper properties. http://australianpropertyforum.com/single/?p=8083846&t=8262989
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A) Size of average new housing loan B) Median Capital City House price
We can take A/B for each year, which should give an indication of how big loans have been compared to house prices. Using Stapledon's house prices (RP Data for 2010) and the ABS loan sizes we get:
Oct 1975 - 60% Oct 1980 - 58% Oct 1985 - 55% Oct 1990 - 50% Oct 1995 - 63% Oct 2000 - 61% Oct 2005 - 62% Oct 2010 - 62%
Quote:
It is 100% logical that the price of something cannot continue to grow exponentially forever. Iron ore miners, coal miners and housing vendors have all had to face this reality.
That statement is totally illogical.
It is the policy of the Government/RBA to ensure that the general price of consumer goods and services RISES EXPONENTIALLY by 2%-3% over the median term forever.
There exists a Treasury/RBA agreement which commits the RBA to achieving EXPONENTIAL price increases for consumers of goods and services.
Incomes have been rising exponentially forever for hundreds of years apart from short interruptions.
Exponential rises of incomes and prices, even forever, presents no logical problem. The unit of measurement is an invented abstract concept. There is no fundamental constraint on the unit of measurement.
The average loan size has always been well short of the median house price. The average loan size has been around 60% of the median house price since at least 1975. FHB's tend to buy below median price properties. It's always been that way. Somebody has to buy the cheaper properties. http://australianpropertyforum.com/single/?p=8083846&t=8262989
That statement is totally illogical.
It is the policy of the Government/RBA to ensure that the general price of consumer goods and services RISES EXPONENTIALLY by 2%-3% over the median term forever.
There exists a Treasury/RBA agreement which commits the RBA to achieving EXPONENTIAL price increases for consumers of goods and services.
Incomes have been rising exponentially forever for hundreds of years apart from short interruptions.
Exponential rises of incomes and prices, even forever, presents no logical problem. The unit of measurement is an invented abstract concept. There is no fundamental constraint on the unit of measurement.
Good a gawd. It's "The Bag" chipping in with a does of its statist the realism. But mouse can find a solace in its words, as it relate to asset price (even though it cannot be a prove). Problem is that it cannot be the prove that a exponential can be a created by master. If mouse understands what the exponential really the mean, a master need to be able to manipulate its "abstract" until a infinity. Goodness a grief!
But even in a natural world, a Moore's Law express a limitation of exponential. A Moore stated that exponential eventually end in a disaster.
But of a course, mouzelaot not the well schooled in such matter.
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