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Old July 3 2010, 11:02 AM   #21
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I am a new member and just like sans_re joined this forum to decide if/when I should invest in RE. I hate to be a doomer - but all the reading I have done on the current crisis over the past 3 years makes me reach the same conclusions that wiseman has.
As Bill Gross (who runs PIMCO - the worlds largest mutual fund) - says - we have to be used to a "new normal" - where growth will be below average for years to come. (http://www.pimco.com/LeftNav/Feature...+Soup+July.htm)
The inflation/deflation debate aside - what we are seeing world wide is a loss of faith in paper currency - ppl are realising that printing money doesnt make the older debts go away. Some ink on paper and some digits in a computer bank account - dont really "increase wealth".

Like some ppl here - I also chose to stay in India rather than move to the West - end of the day this is MY country and I will live/die here. The current politicians and policies do little to inspire confidence. We seem to feel that we have "arrived on the world stage" - reality is that a lot more work needs to be done.

Coming to whether I should invest in RE in Pune - I dont think the prices that are being demanded are sustainable. In IT industry things look good only for a few business lines - like banking (thanks to the stimuls money that Obama gave them) - so growth prospects overall are worrying. And in an environment where real wages are stagnating/going down and goverment could increase property tax (to bring down deficits) - will investing in RE really give me good returns?
 
Old July 3 2010, 02:48 PM   #22
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Originally Posted by aslamgen View Post
Coming to whether I should invest in RE in Pune - I dont think the prices that are being demanded are sustainable. In IT industry things look good only for a few business lines - like banking (thanks to the stimuls money that Obama gave them) - so growth prospects overall are worrying. And in an environment where real wages are stagnating/going down and goverment could increase property tax (to bring down deficits) - will investing in RE really give me good returns?
Aslam,
The time to invest in RE has gone already. Many people will say that RE will give good returns on long term. Long term?? Personally, I wonder whether the current flats/craps which are built by builders will ever sustain 20 yrs. Add to it that the if RE doesn't appreciate, even after 15 yrs, the new flat will be going at the same price to what you will quote. It is a big, big loss. Again, when you resale, you have to put your foot down as the buyer has multiple options. Hence, negotiating power may or may not be there if Pune doesn't boom the way it did in past 5-7 yrs.

For now, see if you get a good deal for self use & buy. For investments, RE is strictly no-no.
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Old July 3 2010, 08:25 PM   #23
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[QUOTE=hitmady;88333]I would say, you have not stepped out of car:
. To see children begging & selling goods than going to schools.
. To see Indian businessmen & officers employing children as house-maid.
. Farmer suicides (for what-ever reasons) and Agri-minister busy holding IPL and ICC meetings.
. To see most Indian do not have decent dwellings with sanitary facility.
. To see 3rd class infra-structure of Mumbai/Pune where millions live.
. Rampant corruption where with money anything can be done.

Get real man.

Thanx for reading the post and your comments. let me share.

Just 3 months back, an auto driver's son,received Ph.D. and now he has become head of one of the NASA's division.
Around 6 months back, there is a porter who is working in Nava Sheva Port Trust. It is called as JNPT. Located in Panvel. His daughter finished IAS exam and now any time she would be becoming IAS officer.
10 days back, shoemaker's son, got admission in IIT.
U have so many instances and experiences which have become real life examples.
Above & all, i myself have seen my father in very very average condition. i didnt see my grand father though. i lived the 1st 18 yrs of my life in small village.i had started my carrier selling toilet pots & to become head of business , work as an NRI & then come back to start my own business. i can safely say that i wont have been any better off at all and probably ended up living a miserable life in the same village had i not taken things in my stride.
i am indebted to my parents and will remain for all my life.

Instead of begging for food, why dont they work. why do they spend 12 hrs of daylight sleeping and waiting for work to come their way. why are they happy with just 1 meal a day. we do we accept mediocrity.

i am yet to kill "child" in my body and that's how i am able to various mile stones. i am sure most of the readers of this post are achievers in their own right.

Look at the acts of Union Carbide (Bhopal), British Petroleum (Gulf leak), Enron (Fraud), Blackwater (the US security firm operating in Iraq) and the big US banks (financial crisis resulting from greed and near fraud) and you will see stories of corruption, lack of ethics, violence and greed at the highest places in the US/West.

On the other hand the common people have the courage to elect the Supreme leader from the minority black community and the common policemen being nice to citizens. I think our problem is that everyone - the leaders are corrupt and the masses are intellectually bankrupt..still tolerating corrupt leaders.
RIch are getting richer poor getting poorer.

This is my thinking and opinion.
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Old July 4 2010, 02:39 AM   #24
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Muneesh, really appreciate your thoughts.

I personally believe that you cannot change other people. All you can do is your own job really really well, better than the best in the world. If you do that, if you take pride in working well, you have done your bit. If everybody did that, then we will get – well, like the West, because in their country, I find that people work well and have pride in what they do.

In India govt servants take pride in not working and corruption. We must reduce our govt size. In private, people try to do the minimum that they can get away with. Mostly we allow people to get away with really shoddy work. We must stand up for our rights.

Such small things are all that is needed to make a difference.

Recently I employed masons, electricians, plumbers etc. Their work quality was pathetic. They were incapable of work even if I paid them well. Basically unemployable people.

How can our builders use such pathetic workers and manage to build top quality? They cannot. And so we will accept their pathetic flats too – because we have no choice.

Monds. We are so much behind the west and the east in everything because we are not traveling the same road or the same direction. We are going in some other direction, god knows where. We will never catch up because we chose not to follow.

Thats our nature.

Abhisam, India has always been intolerant, casteist and violent in a cowardly way – only now in 24 hrs media glare, it seems more. Most riots in the past were even more violent than Gujrat/Godhra riots.

Hitmady, I for one feel very much alienated from Western society when I go there. I speak English almost as a first language, yet it feels strange and alien from a white man’s tongue. I instinctively start speaking to my family in Hindi or tamil, rejecting English as alien, when traveling.

Wiseman, agree with most of what you say. India is chaotic by genetic predisposition. My point is this:

Betting on India changing is likely to be a disaster in wealth management.

Betting on India somehow muddling through and some businesses doing well – that can make you a lot of money.

GS Venkat, I vote in every election and vote positively. If you have an online anticorruption group, will be glad to join.

Aslamgen I don’t think RE is a good investment. But I still believe in RE investment. I will explain why in response to realacres.

Real, 2003 was not the best time for RE but the best time for stocks. RE gave 500% returns but so did Stocks give 500% returns, being at the same time, very well regulated and instantly liquid. Far superior to RE.

From 2000 to 2008 I was in 80% stocks and 20% bonds. I hated RE totally as being useless. In 2003, it did not matter which stock you chose, it made money.

2008 to 2010, Stocks are very difficult to invest. It is a stock pickers market, which basically means you have 10% chance of making fantastic returns and 90% chances of losing money. Index investing is probably going to stand still. Difficult economic circumstances are making forecasting impossible. All of us agree that economy is going to be difficult for the next 10 years. I say this despite stocks giving 100% retun in 6 months from Feb 2009 to August 2009. Its all unpredictable and risky.

In this scenario, I personally believe in 30% stock, 30% bond, 30% RE and 10% g o l d portfolio as the best possible asset allocation to withstand these difficulties.

So is RE a good investment? No.

Can you afford not to have RE investment? No you cannot.

It is one of the few hedges against inflation which are usable. Unlike g o l d

So buy RE for own use, well within affordable means and with minimal loan is my personal belief in these tough times. If you have zero investment in RE, unless you are very rich, you will be in sore straits.

Finally Muneesh, Indians will be Indian because they are Indian. Its genetic, this is how we are (We are like this only). Best that we accept it and move on, and not expect change.

People don’t change. White people were like they are now, even hundreds of years ago. Same with Chinese and Japanese.

And Indians have always been like this.Go to Singapore. One of the cleanest cities in the world. Except in the little India part of Singapore, which is dirty and chaotic. Why? Because thats how we are. No matter where in the world we go, or how rich we become.


Appreciating reality is a prerequisite for making proper investment. Incorrect expectations for the future is the most common investing mistake.
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Old July 4 2010, 09:06 AM   #25
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welcome back wise

Quote:
Originally Posted by wiseman View Post
Folks,
Notwithstanding comments like the one from Compuwallah, here's the deal ...
The definition of Recession (primarily US Govt based) is 2 consequitive quarters of negative growth. Which means you need to be 6 mnths in recession before it is official. Does that make any sense to you in deciding what to do (its like announcing the departure of the train 6 hours after its left; all you can do is look for the next one!)

Probably the only economist / prof who categorically predicted the Great Recession (which, in my opinion happens to be the first part of the Greater Depression) was Roubini back in 2006. When he spoke about it then people laughed. The next year people were searching for him to listen carefully. Today he is a star!

As far as I'm concerned, the Depression never ended. It took a breather in 2009 simply because it was given a massive dose of adrenaline. This only makes the case worse for the next phase of the depression as people (especially in the West) as far more in debt (including Govt debt which simply means that each of us is on the hook for that much more money in taxes, ultimately).

People in this forum seem to enjoy deriding the doomsters. Maybe they are scared deep down. Maybe they are too simplistic.

Just remember that, once you have taken on a loan of 40 lakhs (on which the interest is another 40 lakhs), you have to pay every one of the EMIs without fail every month for the next 15-20 years while running the risk of joblessness and resultant lack of income and money to pay due to various reasons - recessions, sickness, marriage and family which can cost a bomb, while home prices may simply remain stagnant for long periods (or even decline) and liquidity may simply dry up for a while too.

The builders have put you up to be a sucker by catering to your emotions (fear and greed) and they and the bankers are counting the mney and laughing all the way to the bank. You are down to eating curdrice for the next 20 years - ask Real.

This is the time you need to be extra careful and fearful. Not extra overconfident and dismissive.

Anyways, if you aren't, its your funeral.

cheers
 
Old July 4 2010, 08:49 PM   #26
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YOU HAVE TO BE PART OF A SYSTEM TO CHANGE IT.
Admire your spirit. but at the same time curious to know what have you changed so far, by "Being a part of it?"

If not done anything so far, then atleast you should have some plan of action!

Can you please share that. I want to hear that.
 
Old July 4 2010, 09:02 PM   #27
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I have traveled many countries and find there is no place that can give a human being an equal measure of love, dignity, sense of belonging and respect - as much as INDIA ! I agree

I always felt isolated in US and ME.
100% disagree with you on this front. In India, human life is the cheapest thing. Our politicians say about "Mumbai attacks; if only 170 people have died, then what is big deal?"

A human life has biggest respect in USA. You will be heard for your agony.
In India, if our daughters/wifes get raped by Politicians sons, even god will not help you. Heard many Farmers have disappeared in Lavasa, probably they did not wanted to give away their land forcefully for some 1/2 rs per guntha. Do you expect any justice for them? Dud they are not even reported in the news!

If you felt isolated in USA, ask yourself, did you keep your doors closed or Americans closed for you? For me so far, all the Americans have welcome me wholeheartedly to be one among them. Any injustice happens, I am sure I will be heard equally, even if I am fighting against any super rich party.
 
Old July 5 2010, 09:57 AM   #28
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Default Buying RE's Risk is like day trading 30L

Today's IE Business section

They Did Their Homework (800 Years of It)
Their handiwork is contained in their recent best seller, “This Time Is Different,” a quantitative reconstruction of hundreds of historical episodes in which perfectly smart people made perfectly disastrous decisions. It is a panoramic opus, both geographically and temporally, covering crises from 66 countries over the last 800 years.
.......
Mr. Rogoff says a senior official in the Japanese finance ministry was offended at the suggestion in “This Time Is Different” that Japan had once defaulted on its debt and sent him an angry letter demanding a retraction.
Mr. Rogoff sent him a 1942 front-page article in The Times documenting the forgotten default. “Thank you,” the official wrote in apology, “for teaching the Japanese something about our own country.”

http://www.nytimes.com/2010/07/04/bu...html?src=busln

As all of us are currently doing ... 3 times Stock and RE rise in 10 yrs ..it would be ***** to compare with last 10 yr prices.

(Hint: Google Supercycle )
last 50 - 60 yrs were there ever such times ?
Whatever your wisdom.....
Experts wisdom .....
Relative's Wisdom(if they are not the MBA from top Bschools and in Economic research ...) .....
None have tested such times ....Last time such issue was in 1930.....
Hardly any 100 yr olds are in Advising scene........

When there are such Risks in target ....
Why RE buyers are trying to become 'THE LIFTMAN' (greater fool theory)

Those who day trade for 30 Lakhs can take such bet in RE esp of Pune/Mumbai.....
Rest all are at risk of burning their fingers....Will that be a good Financial decision ?
 
Old July 5 2010, 05:33 PM   #29
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Frugality, you cannot live in a demat share. You can live in your flat.

Making booking today and selling it tomorrow - now that is day trading. Usually for 2-3 Lakhs only. Like shares, you can double your money in a few months. Unlike shares, very rarely will you lose half your money in the booking game.

Looking at past 50 years of Indian history, RE has always outperformed stock, bonds and g o l d.

For the last 800 years, RE and g o l d have been the primary repositories of wealth in India (cows being perishable and transitory)

Why should it be any different this time?

Those who cry "RE will crash"

are the ones who are saying "This time it (India RE) will be different"

and

"This time Indian RE market will behave differently from past behaviour"
 
Old July 5 2010, 05:40 PM   #30
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Quote:
Originally Posted by RAJESHP View Post
Admire your spirit. but at the same time curious to know what have you changed so far, by "Being a part of it?"

If not done anything so far, then atleast you should have some plan of action!

Can you please share that. I want to hear that.
While I appreciate your point, isnt just living and working in India contribution enough?
 
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