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Investment Portfolio; Against Melbourne/National Property prices.
Topic Started: 16 Dec 2012, 08:34 AM (25,670 Views)
Trojan
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Olmule
12 Jan 2013, 09:34 PM
Sorry mate, I got totally lost with your explanations and justifications as they made no sense to me.

I agree with Petey F. The only thing we can get out of this is the tracking of you share portfolio.
+2 Agree with Olmule and peter fraser.
Your assumptions/explanations/justifications to compare with property is still wrong.
Stick with showing how good you can invest in shares and leave it at that
I put trolls and time wasters on my ignore list so if I don't respond to you, you are probably on it ....
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Poontang
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Olmule
12 Jan 2013, 11:11 PM
sounds good.

I guess you could also include trading expenses (brokerage and stamp duty) and any other expenses and deductions (home office, laptop, internet, etc, etc) that you are obliged to pay and entitled to deduct.

This is a nice experiment.
Omule seems to think it is not too bad an experiment and agrees that dividends from the shares should be included.
Trojan
13 Jan 2013, 01:29 AM
+2 Agree with Olmule and peter fraser.
Your assumptions/explanations/justifications to compare with property is still wrong.
Stick with showing how good you can invest in shares and leave it at that
*
Olmule
12 Jan 2013, 10:50 PM
ok, cheers. I think it is starting to sound more realistic now then.

Will the share investor also gets dividends and be hit with tax on the profits of any trades?

Maybe chuck in a few grand in expenses, maintenance, renovations per year for the home owner to cover the inevitable as the building component should be depreciated over time and will need money thrown at it.

Are you comparing the share portfolio against the property performance based on one of the main RE indexes over the year?




Olmule
12 Jan 2013, 11:11 PM


This is a nice experiment.
It will be interesting because I am bearish on the ASX over 2013 and expect it to be lower at year end than it is currently.
Edited by Poontang, 13 Jan 2013, 01:57 AM.
There are some people who seem angry and continuously look for conflict.
Walk away, the battle they are fighting isn't with you, it's with themselves.

The first lesson of economics is scarcity: There is not enough of anything to satisfy all who want it.
The first lesson of politics is to disregard the first lesson of economics. ~ Thomas Sowell.

Who was the fool, who the wise man, who the beggar or the Emperor? Whether rich or poor, all are equal in death.
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those
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Poontang
12 Jan 2013, 10:13 PM


So the investor has costs of 52 x $430pw incurred as well as interest (prepaid 12 months in advance) on the loan to purchase shares.

The property buyer has interest + rates + building insurance + water rates incurred.
I think this was a missing part and you are now getting closer to a complete set of reasonable assumptions. I think you had to remove the 500/month. That number becomes 'ongoing costs for buyer' - 'ongoing costs for renter (rent)' so it might be negative.

Capital gain for buyer at the end should actually be equity, so that whatever principle he has paid down is included in his total when calculating gains.



I think the additional loan for the investor is unneccesary for this analysis and you should put that back to just the investment of the 240k. I think borrowing to invest in shares in not something many people would do and that was not part of the original scenario.
Poontang
11 Jan 2013, 06:16 AM
Share Code


ABY

AVB

AYN

BKP

BPT

CKF

CTN

DUE

EHL

EPX

EVN

FML

GOR

IMF

KRM

MAD

MTS

MXR

NCM

NST

PIO

RAU

SAR

SBM

TGA

TSM
Quantity

43000

229885

555555

1666666

13793

13793

19607

9478

33057

11267

12084

606060

160000

11235

11695

27777

5952

2500000

1000

17094

714284

500000

52631

14652

9706

100000
Buy Price








$0.465

$0.087

$0.036

$0.006

$1.45

$1.45

$1.025

$2.11

$0.605

$1.775

$1.655

$0.033

$0.125

$1.78

$0.885

$0.72

$3.36

$0.004

$21.56

$1.17

$0.028

$0.010

$0.38

$1.365

$2.06

$0.20







Current Price




$0.465

$0.087

$0.036

$0.006

$1.45

$1.45

$1.025

$2.11

$0.605

$1.775

$1.655

$0.033

$0.125

$1.78

$0.885

$0.72

$3.36

$0.004

$21.56

$1.17

$0.028

$0.010

$0.38

$1.365

$2.06

$0.20



Current Value $







20000

20000

20000

10000

20000

20000

20000

20000

20000

20000

20000

20000

20000

20000

10000

20000

20000

10000

21560

20000

20000

5000

20000

20000

20000

20000








Share Portfolio Total $476500
Pre Paid Interest on loan 12 months in advance @ 7.65% $19625
Total $496125

Greensborough is the suburb picked.

Weekly Rent is $430pw $1849pm

House price $480000 + Stamps + Fees $498000

$240000k Deposit $258000 Loan @ 5.5% Fixed 3 Years.

Loan Repayment $1584 per month
Interest Component $1182 per month

I have been assigned to a client so may not be able to update this weekend. Will endeavour to try.

NFI what happened with column headings...

I am not a licensed financial advisor, these are not recommendations and you should seek professional advice before investing. Using figures from an anonymous blogger on an internet forum is not professional financial advice, it is you being stupid


EDITED: SAR and RAU Quantities were in incorrect order. Fixed
2nd Edit Quantity of EHL fixed.
Should not have done this at 4 in the morning.
locked
Edited by those, 13 Jan 2013, 03:19 AM.
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Olmule
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I agree that equity should be added to the house buyers account, but selling costs should be subtracted from the buyers equity at the end of the period.
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Trojan
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those
13 Jan 2013, 03:18 AM
I think this was a missing part and you are now getting closer to a complete set of reasonable assumptions. I think you had to remove the 500/month. That number becomes 'ongoing costs for buyer' - 'ongoing costs for renter (rent)' so it might be negative.

Capital gain for buyer at the end should actually be equity, so that whatever principle he has paid down is included in his total when calculating gains.
Yep, these were other flaws I also saw in his model but I think he is getting sick of me pointing flaws out so I refrained.

Good to see the flaws are obvious to others as well.
Edited by Trojan, 13 Jan 2013, 07:05 PM.
I put trolls and time wasters on my ignore list so if I don't respond to you, you are probably on it ....
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Trojan
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Your reset of you portfolio when it was losing money makes this whole thread pointless
http://australianpropertyforum.com/single/?p=8371678&t=9806479 (good pickup strindberg)

And I agree with you, under these rules, anyone can outperform the property market.
Too bad you can't "reset" in real life when you lose money on the sharemarket :)
Edited by Trojan, 17 Jan 2013, 09:58 PM.
I put trolls and time wasters on my ignore list so if I don't respond to you, you are probably on it ....
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Poontang
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Trojan
17 Jan 2013, 09:57 PM
Your reset of you portfolio when it was losing money makes this whole thread pointless
http://australianpropertyforum.com/single/?p=8371678&t=9806479 (good pickup strindberg)

And I agree with you, under these rules, anyone can outperform the property market.
Too bad you can't "reset" in real life when you lose money on the sharemarket :)
Don't follow it then.. It will still be posted..


If anyone can outperform the property market. why don't they?
There are some people who seem angry and continuously look for conflict.
Walk away, the battle they are fighting isn't with you, it's with themselves.

The first lesson of economics is scarcity: There is not enough of anything to satisfy all who want it.
The first lesson of politics is to disregard the first lesson of economics. ~ Thomas Sowell.

Who was the fool, who the wise man, who the beggar or the Emperor? Whether rich or poor, all are equal in death.
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Trojan
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Poontang
17 Jan 2013, 10:06 PM
If anyone can outperform the property market. why don't they?
I already pointed it out.
In real life, you can't just "reset" your portfolio and ignore all losses.

Why don't you start a new thread titled "How to outperform the Australian Property Market at the casino"
First you go to the roulette table and put all your money on number 1.
If you lose, just reset your position.
Keep doing this until the white ball finally lands on number 1.
Viola 3500% gains. Lets see property do that!
Edited by Trojan, 17 Jan 2013, 10:21 PM.
I put trolls and time wasters on my ignore list so if I don't respond to you, you are probably on it ....
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Poontang
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Trojan
17 Jan 2013, 10:12 PM
I already pointed it out.
In real life, you can't just "reset" your portfolio and ignore all losses.
I did not reset the portfolio. It is a new portfolio under different trading conditions, the original portfolio is void as far as I am concerned.

What ever the share price was on the close of trade for the new share portfolio that was what they are. I cared not if they were higher or lower.
If they had all been lower or all been higher they still would have gone in as that value. The first portfolio ceased to be.
There are some people who seem angry and continuously look for conflict.
Walk away, the battle they are fighting isn't with you, it's with themselves.

The first lesson of economics is scarcity: There is not enough of anything to satisfy all who want it.
The first lesson of politics is to disregard the first lesson of economics. ~ Thomas Sowell.

Who was the fool, who the wise man, who the beggar or the Emperor? Whether rich or poor, all are equal in death.
Profile "REPLY WITH QUOTE" Go to top
 
Trojan
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Poontang
17 Jan 2013, 10:21 PM
I did not reset the portfolio. It is a new portfolio under different trading conditions, the original portfolio is void as far as I am concerned.

What ever the share price was on the close of trade for the new share portfolio that was what they are. I cared not if they were higher or lower.
If they had all been lower or all been higher they still would have gone in as that value. The first portfolio ceased to be.
My apologies, I used the wrong words.
Let me try again.

First you go to the roulette table and put your whole portfolio on number 1.
If you lose, create a new portfolio and declare the original one void.
Keep doing this until the white ball finally lands on number 1.
Viola 3500% gains. Lets see property do that!
Edited by Trojan, 17 Jan 2013, 10:25 PM.
I put trolls and time wasters on my ignore list so if I don't respond to you, you are probably on it ....
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