this is a sticky one, some comments needed

Motherhen.....is that what you and your hubby have done?

Hi Redbakk - No, we are still poor farmers. Mh

Oh...hayseeds huh... : )

Anyway I agree with you...invest into real estate so they have something to come back to....this is exactly what I am doing.

you are a 100% right, i will be happy what ever they decide. and they know my door is always open.
cheers Shane.

Would your door be open for my mother in law???

Jo.......That bad huh?

Ah huh!.. I'd share but the situation is safer if I keep my mouth shut, you wouldn't believe me anyway! you'd think I was making it all up. This year I had enough of her and the carry on, so all this other stuff that has gone down with her and having 11 years of keeping mouth shut has gone out the door! I have let loose on the woman and by God she didn't like it! But too bad! I am not going to put up with her and her crap anymore! she didn't know that person existed inside me and I tell ya, finally letting go and blowing my stack on numerous occasions has been the best thing to do to make her hear what I want to say!!!!!!! (I say hear, not understand, because she will go back to usual self,)
then I can go off again!..goodie goodie!!!

Hi gmd,

Well done in putting all your money into cash. I very much doubt anyone predicted anything this bad even though they will take credit for it. I'd say you were one in a million taking the risk that the market would actually crash. I'd doubt even those predicting it put all their assets into cash. This is a one in a century event and no matter what anyone tells you no one predicted this. Perpetual bears will also say so but, yea right. It could very well have gone very bad for you but it didn't so well done. You actually have lost money in cash via the currency rate and inflation but your right not to the extent of most of us.

I agree houses will keep going down on average or at the least stagnate for many years. Though picking that shares will keep going down is a very brave tip. If they do it'll beat every correction and crash ever. It could but even if it does maybe 10-15% at most. Most probably will trade sideways for a year or two. If not and there is a real crash you're stuffed, money means nothing in a full on crash it becomes worthless. Only assets count in a major depression inflation will destroy your cash. You've done well so far, now is the time to start averaging back into investments, no one picks the bottom, you could miss a stellar run back up. Still your call. Why would you say cash accounts in super are loosing money, that's rot, your in cash are you not. Also facts are most SMSF loose more than managed supers. Try not to believe just because you made one good call that you will continue to do so. Regardless of what you believe mangers are no different to professionals in every field. Some bad, most better than most of us in their profession.

Take the comments for how they are intended, you've done well to date now your at cross roads that will either make you stacks of money or not. Still you might be a so it matter not.

Good luck

Well .. you may not believe it, but there were people predicting what happens now .. and there is worse to come ..

I was not talking cash funds (they are loosing) I am talking term deposits which we still hold at 8.45% at the moment.

And yes you are right .. you need to convert that cash again into property. We have started doing that with selected locations.
But the pressure is on and property will fall further especially when we see jobs going early next year. Shares are too early although there are a handful of totally undervalued blue chips
which may go up a bit, but general direction is still down.

I do not believe in "so called experts". If they would be as smart as they want to appear then they would not have to do what they do, right ? People holding seminars about investments have no clue about investing otherwise they would not have the time to hold seminars. The ones who know do, the ones who don't teach or are consultants.

Anyway .. everyone has to make up their own mind, but most don't they are just sheep.

Have fun
gmd

Hi GMD

You are quite right; there were many people predicting this 'catastrophe' and some very good books were written on the subject. The problem is that greed is insidious and people are often blinded by the reality.

The reality is that money/credit was far too cheap and readily available, we saw that in the late Eighties, and history is just repeating itself. Risk was being mispriced. Unfortunately this time around there is still a chance of systemic failure of the financial system, albeit small - but all hell will break if that happens.

In the very least the world is heading in to deep recession. I wouldn't own shares in that environment........we are still a long way from everything turning aound for the better (a long way!)

Hi GMD and Landy,

The few people you talk about predicting this have been doing so for the last decade. They are perpetual bears and sometimes get it right. Most did think there was something going to happen but no one predicted this outcome, come on no one has a crystal ball. But it's worked for you so great your one of a handful in the World that did what some of the "prophets" said. Could there be more to come. Probably a bit more but just as we get caught up in the world recession, we should side track it (just). Could it be doom and gloom as they predict? Maybe but I very much doubt it. The doom and gloom bear merchants come out to play in this environment but it generally passes. Markets are more adept in pulling themselves out of this mess than they were in previous times. But yep it could all turn to crap, in that case no one is spared. If it got that bad that countries couldn't pay their bills etc what do they have to loose they will take what they need.

If you wouldn't own shares what would you own? Property has had it's day for a while and may fall further regardless of location. Property and shares work in tandem and always have, property has more to fall. Cash always goes backwards in a bank and remember the guarantee is only as good as the people/country backing it. If the world falls over I'd be damn worried about having cash in a bank. What about Gold, doubt it this time round.

"The ones who know do, the ones who don't teach or are consultants". Heard this garbage when I was an apprentice and it's still rubbish. This implies that anyone who teaches is a fool and only those that do are competent. So anyone who was taught by a fool is a ...... You get the drift. So doctors, nurses, accountants, engineers, anyone who is taught was taught the wrong thing or at the least incompetently. "Those that know do" so the assumption is that we never have doctors, nurses, accountants, engineering that do, make any mistakes. It's a foolish statement and should be taken for what it is. Disrespects anyone that teaches and anyone that has ever been taught. Nasty cycle isn't it.

Good to get different opinions on this mess and I hope you're both wrong for everyone's sake and within 6-12mths we are back on track.

I'm from the old school, where the old proverb Little Fish Are Sweet,
being self employed and getting close to retirement, I have been
watching with great interest over the past 18 months or so, re: the
Share Market, and I thank my lucky stars that we have stayed with
Term Deposits, several years ago we were stung by a N A B Financial
Planner, who stuffed us up big time, we lost a lot of money,
from that day onwards, I swore I would never let any body, ever
control our hard earned Dollars again, I know Banks are risky allso,
but a little bit of Interest is better than risking a lot, just depends how greedy you want to be.

Cheers
Daza

Hi Austravel...

To the contrary, there is some very good stuff written on the topic, especially post 2001 and by well respected people,; not your talk circuit 'prophets'. Some of the work by Satyajit Das (an Australian), among others, has been outstanding.

I work in the financial markets and we were talking about this two years ago. Predicting the timing is difficult, but the outcome was inevitable. And I must add that after 25 years of commodity and currency trading (for a living) and thinking I'd seen it all - this crisis came along.

To be perfectly honest, I think markets are less adept at dealing with this particular crisis than previously as many have simply lost confidence in the regulators and those 'vested' with fixing the problem. Part of the problem is that no-one knows the full extent of it. We've witnessed the credit crisis in the US and how it spread around the world; the next big issue will be the default of loans made to Emerging Countries..

My tip is that within six months the world will be in the depth of a recession with unemployment rising at the rate of knots. Hard to own shares in that environment...I'm not an investment advisor so I can't offer you alternatives, but I can tell you what I wouldn't own.

Good luck with it..

Austravel,

"This implies that anyone who teaches is a fool and only those that do are competent. So anyone who was taught by a fool is a .""

The reversal is not true. Education and Dressage are two different things. Teachers are conditioned for a certain way of pushing knowledge into heads. For me this is dressage. Same thing as teaching a horse or a dog some tricks. Repetitive work requires that sort of dressage and a few fresh-ups at times. Many don't even get those fresh-ups and do the same tricks all their live.
Learning is something different. You grow far beyond your teachers because you use them as a tool for specific knowledge in a specific area and you combine it with other areas and release the synergy effects and inventions based on the combined and extrapolated knowledge.
Doers are researchers, engineers, artists etc. Creative people growing beyond the past.
The occupations you mentioned are highly repetitive and non creative. They need dressage. Australians on average do not learn a second language. This is affecting the learning capabilities of the average kid. Studies have shown that learning of a second language is helping in developing general abilities of the brain. Elsewhere a second language is mandatory and sometimes a third for that matter, depending on the path you take.
If students would not grow beyond their teachers we would not have innovation or any development for that matter. You don't need to be smart to be a teacher or teach doctors or nurses. You just need to be trained accordingly. get the drift ?? same with financial consultants. They are trained to sell a product (mostly) and in many cases they don't even understand the consequences of their actions. Why is an accountant any better than a person having read and understood the tax act and current regulations ? The accountant knows more than the average small business owner, because most people don't bother to stay on top of the regulations. But that does not make the accountant smart does it? knowing more than others is not necessarily smart, it's only what you make of it in terms of your own or others development. What I am saying is that you do not have to be smart to be a teacher or being trained well. And I am also not saying that there are no smart teachers. If you are a smart teacher you may not survive in this landscape for long anyway. You have to have a certain bluntness and ignorance to deal with today's kids and parents.
Also, being smart has nothing to do with being wealthy or successful. Some people choose different paths and have different values. For me being smart means using your abilities to create an environment in which you are happy. Non smart people make themselves depending on an environment and adapt.
A smart person is able to make their own decisions and can afford not work just for the cheque at the end of the week. They are usually sought after people because they like what they do, whatever its is. And yes I agree and have seen smart teachers but only very very few.

Have fun
gmd


have fun
gmd

well just for starters calling investment seminar holders 'teachers" is ridiculous
they do no more than talk up ways to get people to part with ther money in dodgey ways for their dodgey investments for their own profit.
the only thing they "teach" is a fool and his money is easily parted

Hi Landy,

Maybe we're on a different wave length. Guess I'm talking about the doom dayers. Did the people you speak of get it right ie a crash of this level? If people were conservative or out of the market since 2000 then they've done worse than this market would have caused them.

You might be right regarding unemployment. If it does spike up I think it will only be that just a spike and within 12mths come back again. Plus will only be in select areas. Even though commodity prices have dropped I'm led to believe that volumes have not as yet dropped. Growth will be hammered but not sure over 12mths whether the market is right this time. It's factoring in a very large drop in earnings.

You can not derive from my statement that I called them teachers. They fall under the category of "consultants" for me.

have fun
gmd

Hi GMD,

We differ on so many levels I don't know were to begin. That style of teaching went out long ago but now they think maybe it should be brought back into schools at least. That is the style of repetitive teaching. Maybe my view is slanted due to a background in universities. In theory the teacher should be far better equipped than the student. Sadly in some areas this isn't so. I still get the assumption that you think that teachers/lectures etc never grow beyond today and teach only the same stuff day in day out. In fact everything is moving constantly. Surely teachers/academics need to be in front constantly to continue this upward progression. Most research comes from within the teaching/academic profession. This is what advances learning/society/understanding.Well that's what's supposed to happen. Fails sometimes.

Are you saying doctors, nurses are caught in the past as well? Maybe accountants don't move as quickly with practices but they do move. I doubt there's a single body of professionals that have stood still over the past decade. As far as you don't need to be smart to teach doctors and nurses, I'm stunned.

Anyway each to their own so I won't go one.

Good luck

P.S. You did say teachers which is what I narrowed in on, but I get your drift now. "The ones who know do, the ones who don't teach or are consultants".

Hi Austravel

We are long way from a resolution, in fact I’d say it is not far out of its infancy and has a long way to run.

The problem that we have now is that what started as a credit crisis has quickly turned into a blunt instrument bludgeoning the ‘real’ economy. Many banks globally are under-capitalised and that is part of the problem that unfolded, people underestimated what effect this would have on credit availability (an explanation would be too lengthy to discuss here)….

There are a number of examples that can be looked at in a historical context to glean what impact the current crisis could have; and these pail into insignificance when compared to what is unfolding presently.

Now I run the risk of being a doomsayer here, but I am viewing it from the pointy-end and I can tell you the picture isn’t pretty.

Mind you this is now diverging from the thread previously started; send me a note if you would like to discuss further.

In the meantime following is a link to a book that is interesting reading. Das is well respected and has a wealth of knowledge. Note the date of the seminar, August 2006! Mind you it isn't just about equity markets, but the current problem had its roots in what he discusses.


Cheers

Traders, Guns & Money: The Liars Guide to Risk Management

Austravel,

I don't think we are that far apart. I did not include a "decent" university professor or lecturer to some part into the group of teachers. With an academic education you "should" get some fundamentals of independent learning. The lectures are held and its up to the student to grasp the knowledge or not. It does not mean that they are capable of research and independent intellectual growth. That's usually determined post graduate when the smarter ones take off on their own path. I agree with you that a lot of our new knowledge comes from uni's and their research but also a lot comes from business oriented research or inventions. I very well differentiate between lecturer/researcher and teacher.

Today and especially in Australia the curriculum is highly adapted to the specialised workforce we need. For example "Basic Mathematics" is split up in Applicable Mathematics, or Discrete Mathematics, or Calculus, or Geometry and Trigonometry. What a nonsense. We bring education and teaching to the lowest common denominator and as a consequence we do not need smart teachers, we only need "specialised" teachers. Every person with a TEE should have a certain overview of the state of the art knowledge.

Unfortunately also universities scale their results to have a certain required number of students pass and not look too bad when the general level of education goes down. It does not encourage the system to improve the quality of teaching and it also does not improve the quality of the graduates. Only a very small percentage of people (usually the ones with HD) achieve a level of independents in their intellectual abilities that I would call them "smart". The rest is "trained" .. probably "well trained" but just trained. Those smart ones usually are the doers.
I really enjoy the exchange of thoughts and I have no problem at all if you do not agree, because I believe that only an unreasonable man/woman will bring progress. The reasonable man/woman will adapt and nothing will change, in the sense that satisfaction is the end of progress.

have fun
gmd

Hi Landy,

Would like to discuss it further do you have an email address I can get you on?

Hi gmd,

Yes you're right we are closer than I first thought on our views. In fact your second paragraph relates not only to schools but trades as well now. The trade I did has now been broken down into 3 separate trades/skills.

Good chatting.

Regards

Hi Austravel

thelandyoptusnet.com.au

cheers

Centrelink Financial Information Services (FIS Officers ) are FREE!

You need to call an make an appointment to see one. Excellent services not just for retirees but those getting close.

Sometimes the wait is a few weeks for an appointment

Good luck to you and have fun!