We have got a fantastic government at the centre. Dr.Manmohan Singh is Prime Minister, Congress a secular party has emerged single largest party in the coalition with more than 2/3rds of MPs in the UPA from Congress itself. In terms of the baggage, this time Congress has fewer and larger allies. Interestingly 2 of the largest allies are also ex-congress like Sharad Pawar and Mamta Banerjee. Apart from this if needed anytime during next 5 years Congress also has few more secular parties as choices for new allies like Biju Janatha Dal and Nitish Kumar who are efficient and big with large number of MPS.

So since 1991 Narashimha Rao government this is the first stable goverment India has elected in almost 15 years. This is a reform oriented government and Dr.Manhoman Singh will have full power to implement reforms in Pensions, Insurance, Retail and other sectors with free hand. This stable government that has come to power is fantastic for investments and smooth steady reforms.

While I am happy that a first class choice has been made to form elected government I have suddenly turned bearish for next 6 months. I am bearish on everything (1) Stocks (2) Real Estate (yes I am bearish on RE) (3) IT jobs.

Reasons: During times when such good news is around investors become euphoric and suddenly start behaving crazy. Expect BSE index reaching big highs, expect DLF and Unitech annoucing that their bookings have gone up and their debt is reducing. Market expectations are very high now. After 2 months when things don't happen quickly as expected Markets will see their biggest fall.

I am bearish for next 6 months and will avoid both stocks and real estate. I am taking a vacation from any investment or buying and will decide after 6 months.

However will continue to post here just as an observer with some analysis. But the baseline is I am a BEAR now in Stocks, Real Estate and IT jobs.
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  • Originally Posted by nabishek
    Friends,

    Can someone clearly define who and when a person is a "Bull" or a "Bear".

    These are the two most (ab)used words in this forum.

    .


    Bullishness (optimistic/positive) or Bearishness(pessimistic/negative) are always spoken relative to some entity.

    The same individual can be bullish on Indian, Chinese, South African real estate while at the same time bearish on US, UK real estate. The shifting global order is making real assets in the emerging world gain value at the expense of diminishing real assets in the US or UK.

    There is nothing to feel great about US, it is doomed and hence this bearishness on US.

    There is everything to feel great about India, China or South Africa and hence this bullishness on these countries.

    If someone says he is bear or bull, ask him relative to what? that will make things clear.
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  • Originally Posted by yeskrish
    time and again your posts bring serenity and poise to the forum.

    keep up the good work.

    if i may ask you, whats the situation in chennai after the elections? are the prices creeping up esp in the city?
    Hows the job situation now?
    Thanks in advance for your reply.


    Thanks for your compliment.

    I dont feel much has changed on the ground in terms of financial and job security since the elections.

    We will have to wait till the government takes charge and announces some reform schemes for reviving the economy.

    The new found euphoria is in anticipation that the stable government with the presence of some of India's best economic minds, will come up with a magic budget which would put India on the fast track of development.

    From the signals we are getting now, The government has made it very clear that their priority is to insulate Indian economy from global economic catastrophe and most likely this year budget is going to be conservative.

    Its true that the recent political happenings have stirred some interest among prospective buyers making them check if the prices have come down to attractive levels or not.

    Builders are just anxious to cash-in on the interest and are trying to sell all the unsold properties by creating a mood that another boom is in the corner.

    In the given scenario, It would take more than just marketing gimmicks to convert this interest into demand and the demand into actual sales.

    According to me, this quarter is going to be very interesting.Builders who had been lying low and holding up with their unsold properties and waiting for the market to revive will flood the market offering good deals and hoping to sell and exit.

    I wont be surprised to see lots of unsold new and resale properties clogging up the market and creating demand/supply mismatch even within the city and prime localities due to low absorption levels.

    Personally, I feel its still not time to buy, and believe chennai has scope and needs another wave of correction for revival of sustainable demand.

    Neverthless, Its surely time to start looking out, take time to identify the dream home at the dream location and pitch for best deals and decide whether to buy or wait further.
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  • Thanks.

    You are right and chennai city RE hasnt fallen as much as other cities. Hope deeper corrections happen to more realistic levels. should be in the range of ~200 - 240 months rental value. To me thats about the max fair valuation of a property.
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  • Originally Posted by yeskrish
    Thanks.

    You are right and chennai city RE hasnt fallen as much as other cities. Hope deeper corrections happen to more realistic levels. should be in the range of ~200 - 240 months rental value. To me thats about the max fair valuation of a property.


    Chennai is not going to fall too much. By the way which other city has fallen too much, please let me know.

    I am from Bangalore and prices is good areas like J.P.Nagar 1st phase or Jayanagar 5th block are still at Rs,8000/sq.ft to Rs9500/ sq.ft. People said in Dec 2007 that real estate in Bangalore was a bubble, still after almost one and half year prices are still holding. May be at far away Whitefield (which is still 60% rural with water problems) prices can be negotiated.

    I can't understand whoever says that prices are not realistic and have to fall are called poise, rational what not. Are those who say prices will not fall Nuts.

    Let me ask these poise rationalists, what is the realistic price in (1) Anna Nagar Main Road (2) Velachery 100Ft Road. Do what ever analysis you can and tell me what according to you is realistic price at these places. need exact numbers.
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  • The consumer confidence index in US shot up so much that very soon it might be whether we need to buy RE in US or not. Given that even the Yankee backyard seems to be a buying opportunity, only fools will sell in Chennai and Bangalore where it never fell. I have a premonition that in Chennai one might have to buy a flat in the outskirts for 1c and above very very soon. That means land in the outskirts will cost a few crores per ground and in the city do I need to guess.
    IF YOU HAVE MONEY BETTER BUY TODAY. Tommorow you can only sob about having missed the bus and join Wisey and his bear cartel and CRIB till death. BUT YOU WONT GET A BUY TOMMOROW. Wakeup before you miss the bus for the N and Oneth time.
    THOSE WHO OWN LAND WILL BE SO RICH THAT THEY CAN EMPLOY TEN SW PROFESSIONALS VERY SOON! LOL!
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  • Originally Posted by Natarajg007
    The consumer confidence index in US shot up so much that very soon it might be whether we need to buy RE in US or not. Given that even the Yankee backyard seems to be a buying opportunity, only fools will sell in Chennai and Bangalore where it never fell. I have a premonition that in Chennai one might have to buy a flat in the outskirts for 1c and above very very soon. That means land in the outskirts will cost a few crores per ground and in the city do I need to guess.
    IF YOU HAVE MONEY BETTER BUY TODAY. Tommorow you can only sob about having missed the bus and join Wisey and his bear cartel and CRIB till death. BUT YOU WONT GET A BUY TOMMOROW. Wakeup before you miss the bus for the N and Oneth time.
    THOSE WHO OWN LAND WILL BE SO RICH THAT THEY CAN EMPLOY TEN SW PROFESSIONALS VERY SOON! LOL!


    Nataraj007,

    Do you know something what you have written above is completely possible scenario. The monetary easing started by the US Fed will flood the world with liquidity never seen before. It is possible that 1 ground in Anna nagar could even cost 10C in few years, absolutely.:)
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  • 10C in a few years worth less than 10 lakhs of today!!!

    Originally Posted by contra
    Nataraj007,

    Do you know something what you have written above is completely possible scenario. The monetary easing started by the US Fed will flood the world with liquidity never seen before. It is possible that 1 ground in Anna nagar could even cost 10C in few years, absolutely.:)



    Contra,

    Inflation in Germany in 1914 was just 14%. By 1922, given the terrible economic consequences of WWI and punitive War Reparations, Germany saw hyper-inflation which directly led to Hitler coming to power and WWII. This was the real reason for WWII! So, in 1923 people were using 100 million Reich Mark notes as fuel for their stove and wall paper. When finally it was devalued, people holding old money lost everything! This happens to all fiat currencies in the world eventually!!! Fiat Currency is money that simply has value because your Govt says so, nothing more.

    Check your Rs 100 note today and the one of 1960. The old note would say, "Govt promises to pay the bearer Rs 100 in Gold". The new one simply says "Govt promises to pay the bearer Rs 100". So, the Rupee actually does not even have a definition. Check out "What is a Rupee?" and you will see what I mean.

    Coming back to our discussion:
    First, the monetary easing released by the US has yet to hit the street and the real economy. In my opinion, the US has fallen far short in terms of creating new (worthless) money. All this money has gone into covering the gigantic hole created by the rotten assets in the vaults of large banks. This hole is so large that it may need many more trillions. So, till this money is actually released into the economy, it is still deflation rather than hyper-inflation that seems to be the real threat!

    Secondly, if ever all this money reaches the street, it will literally collapse the US and lead to raging hyper-inflation, which will be far worse than the original disease. The US Dollar will effectively become like the Zimbabwe Dollar. nd your Rupee will also follow suit.

    So, while your land may become 10C from 1C today, remember rice too will become Rs 1000 per kg and petrol Rs 2500 per litre.

    I spent close to a year in Africa and have seen several such cases. It is not a pretty site. The Ugandan Shilling, which was worth far more 2 decades ago is now in a condition where 1 Litre petrol costs 3000 Shillings. And a decent curry in a restaurant is 10,000 shillings. You get paid millions of shillings, but still find it hard to pay your rent every month. You don't want the rupee to go there!

    Large parts of the population will be completely impoverished and wiped out since their savings of 10 lakhs today will be worth a mere 50k in real terms if such things happen.

    If ever such things seem likely, buy gold/silver as these form the only hedge against hyper-inflation.

    Don't rejoice too soon about 10C for land in a few years worth 25L today!

    cheers
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  • Ok Wiseman, now you are learning. Infact as you said 10C tommorow might be worth less than 10L today. Again 1C today is less than 10L for example in 1990 for example. We all know that. Given the same, THE BEST HEDGE AGAINST THIS DEPRECIATION OF WORTH OF INDIAN RUPEE IS REAL ESTATE. My property examples have illustrated the same effectively. So dont argue about something else than the topic.
    To inform you what is being discussed in this forum
    a. Whether it is better to invest in RE or not
    b. Whether it is better to buy or sell or hold RE now.
    So if you are not clear about what you are talking then you need help. As many of your friends suggest psychatric help for all sane folks here, you might as well use it as you really need it and I dont need to talk about your sanity. U know it well!
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  • Originally Posted by Natarajg007
    The consumer confidence index in US shot up so much that very soon it might be whether we need to buy RE in US or not. Given that even the Yankee backyard seems to be a buying opportunity, only fools will sell in Chennai and Bangalore where it never fell. I have a premonition that in Chennai one might have to buy a flat in the outskirts for 1c and above very very soon. That means land in the outskirts will cost a few crores per ground and in the city do I need to guess.
    IF YOU HAVE MONEY BETTER BUY TODAY. Tommorow you can only sob about having missed the bus and join Wisey and his bear cartel and CRIB till death. BUT YOU WONT GET A BUY TOMMOROW. Wakeup before you miss the bus for the N and Oneth time.
    THOSE WHO OWN LAND WILL BE SO RICH THAT THEY CAN EMPLOY TEN SW PROFESSIONALS VERY SOON! LOL!

    US real estate will not recover for another 10 years. There is going to be more pain. Another wave of foreclosures..
    I am wondering - if people buy 1 crore flats as investment and then rent it out, with rental income not even covering 30% of the mortgage, how do they think it as an investment? No one buys 30 year old aparments. So after 30 years they cannot sell them. Maybe they have a lot of money and doing service to the community by making the place affordable to live..:D
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  • Originally Posted by contra
    Chennai is not going to fall too much. By the way which other city has fallen too much, please let me know.

    I am from Bangalore and prices is good areas like J.P.Nagar 1st phase or Jayanagar 5th block are still at Rs,8000/sq.ft to Rs9500/ sq.ft. People said in Dec 2007 that real estate in Bangalore was a bubble, still after almost one and half year prices are still holding. May be at far away Whitefield (which is still 60% rural with water problems) prices can be negotiated.

    I can't understand whoever says that prices are not realistic and have to fall are called poise, rational what not. Are those who say prices will not fall Nuts.

    Let me ask these poise rationalists, what is the realistic price in (1) Anna Nagar Main Road (2) Velachery 100Ft Road. Do what ever analysis you can and tell me what according to you is realistic price at these places. need exact numbers.

    In hyderabad prices have crashed.Check with any hyderabad guy he will tell you.In Bangalore personally I had enquired about flats in 2005 around marathalli,brookefield,whitefield.The quoted price at that time was around rs.2000-2500.

    Recently I checked the price from 99acres,newspapers ad and also with some of my friends.Current price is around rs.2000-3000.So even if we take the upper band of rs.3000 CAGR is only 10% from 2004-09 and that was an unprecendented great credit boom period.

    In the same time chennai witnessed 200-300% rise across all areas.
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  • RE & Market still bearish long way to go

    I fully endorse WISEMAN that both RE & stock markets will take a Long time to recover atleast 2-3 years. RE has to correct 30% to 40% from here.
    All RE companies are having zero cash.
    Now BAnks are in grave danger having financed them.
    they have to restructure the loans to avoid them becoming NPA.
    BAnks will take the hit.
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  • Originally Posted by BigBear
    In hyderabad prices have crashed.Check with any hyderabad guy he will tell you.In Bangalore personally I had enquired about flats in 2005 around marathalli,brookefield,whitefield.The quoted price at that time was around rs.2000-2500.

    Recently I checked the price from 99acres,newspapers ad and also with some of my friends.Current price is around rs.2000-3000.So even if we take the upper band of rs.3000 CAGR is only 10% from 2004-09 and that was an unprecendented great credit boom period.

    In the same time chennai witnessed 200-300% rise across all areas.

    Flats are not investment vehicles. They are for u to live in. Land appreciates, building depreciates. Also there is the second chance to get into the bus now. If u want to miss it, I dont care!
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  • Originally Posted by badrig
    I fully endorse WISEMAN that both RE & stock markets will take a Long time to recover atleast 2-3 years. RE has to correct 30% to 40% from here.
    .


    so you are saying projects launched now at
    2000/ sq ft would crash by 40 % to 1200/- sq ft

    lesser than the cost of construction and amenities.

    i must agree i am not as wise as you but it definitely is beyond even my common sense
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  • Originally Posted by abk
    so you are saying projects launched now at
    2000/ sq ft would crash by 40 % to 1200/- sq ft

    lesser than the cost of construction and amenities.

    i must agree i am not as wise as you but it definitely is beyond even my common sense

    U know what ABK. Many here are thinking that we are the 51st state of USA. They miss many things because of that. US has so much space has very well developed country side and so usable land is a plenty. In India USABLE LAND is a luxury and our population is almost 9 times denser per sqkm.
    Anyway let us assume Badrig is going to get a flat for Rs 200/sqft. LOL!
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  • Time will tell!

    Originally Posted by abk
    so you are saying projects launched now at
    2000/ sq ft would crash by 40 % to 1200/- sq ft

    lesser than the cost of construction and amenities.

    i must agree i am not as wise as you but it definitely is beyond even my common sense



    Abk,

    You will agree with me that most things in this world do not follow common sense - which is why the well-known saying about how uncommon common sense is! :D

    Under normal circumstances, people behave normally applying the usual rules. Under extreme circumstances, behavious can go to extremes. Why else would people jack up prices 6-8 times in 5 years with no supporting rise in other parameters like jump in sustainable income for a large number of people to the tune of 6-8 times in the same number of years!

    So, it was not genuine, sustainable capacity to pay 1C that shot up prices of flats in the boondocks to those levels. It is the tricks of banks colluding with builders in increasing leverage (or debt capacity) by increasing times salary as loan from 6 to 12 times annual salary and the temporary and unsustainable jump in salaries as well as the herd mentality of those borrowing that there will always be a greater fool to buy at ever-greater prices, that made this boom happen. Under your common-sense rule, this would never have happened, right?

    So, when these unsustainable income levels decline because your customer in the USA, UK, etc does not have the borrowing capacity to pay you such ridiculous wages, the basis for this kind of unsustainable sepculation collapses.

    When builders are at the stage of sell or close down, economics do not prevail. Sense of Survival does instead. This results in distress sales where things get sold much below cost. Have you never seen such situations in your life before?

    cheers
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