The Chennai real estate prices did not fall too much. It got corrected to some extent in the range of 10-20% depending upon the location. In my opinion, the Chennai RE has appreciated too much and there is less room to move upward. The higher income (IT and others) job losses make the situations worsens further.

The beaten down stock market shows some improvement. I think it is wise to invest in stocks now. I bought suzlon at 40 Rs. (6000 stocks). In 2 months, the stocks price jumped to 90 Rs. I got my investment doubled and it may increase further. This may not possible with RE unless we are heading for collapse.
I bought Bank of Ireland ADR (IRE) for 1 dollar (1800 stocks). It is now at 9 dollars.
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  • Originally Posted by wiseman
    Nats,

    Besides, merely passing out of an IIT does not bestow some kind of special magic on you. The fame IITs have got is because of the achievements of a few IIT-ians who made it to the top. The others just bask in their reflected glory and think they too are as great as the achievers. Besides quitting the softare game at the wrong time (how sad), what exactly are your achievements that you sit in judgement about all that others talk about? Just remember. You are merely a has-been, probably currently jobless RE speculator, nothing more, nothing less.

    To put the record straight, I started my career as the EA to the Chairman of one of the top 4 IT groups in India today with a gross salary of 3500 pm in 1985 - there were 4 of us, of which 2 are CEOs of billion $$$ Indian multinationals today. That was one of the top jobs going at that time.

    Not bad for a guy from an UNKNOWN college, what? :D And what were you drawing then, Nats? Honest, now. Your conceit may force you to tell lies ;).

    Wisey you are a wonderful clown. Let me take time to answer your long list of statements, most of which shows your frustration.
    1. Regarding IIT. Well IIT has been there for quite sometime. Why IITians are respected is not for you to decide. U dont seem to have any idea about it. One point to note is IIT B.Techs are respected for their ability to be on top in probably the most competitive exam in the world at the time when IQ stabilises (17years!). So they are respected for their JEE ability and not just because of their IIT Degrees. I know quite a few who chose not to take an IIT degree due to financial or personal reasons and have a JEE rank. They yet talk brilliant, unlike you Wisey.
    2. Regarding quitting SW industry. As if you are my guide you are talking stories about it. Between 2003 and 2008 SW industry salaries went up about 5 to 8 times and at senior levels like I was in, it has hardly gone up 3 times. (Unless you are ready to offer me a Rs2 crore job!). It does not speak meaningfully of you to talk about my career decisions. BTW, Stock market went up 5 times almost in that period and if you count the number of ups and downs and even with a leverage of 10 times, you can imagine even a person who trades once in 3 months could have made many many times that 8 multiple of the subjunior IT guy.
    3. Regarding your EA job. I am surprised that you will shamelessly come out with your old salary as if it meant a shit about you! That salary was pretty good in 1985. At that time I had no salary!! Dont be too fast. There was a Rs 1000, my scholarship for pursuing M.E. in IISc and then that was raised to Rs 1800 in a few months time. Infact that salary seems to show that you probably worked for Chip INdia a company that collapsed later into a non entity leaving fellas like you high and dry.
    4. As usual you talk about Chairman of an IT group today and you never mention names. You seem to have no shame after all. You dont mention your name (I will assume it is personal), call yourself Wise, when there is not even an iota of it in your writings, then talk of a college next only to IIMA and then you dont mention its name, then you come up with a nameless company. Why dont you say you earnt Rs 10k. Can I dispute it? One thing is getting cleared. You claim to have an MBA and let me ignore you from an unknown college. Even IIM MBAs who are supposedly trained to be Enterepreneural dont seem to get even a bit of it onto their skin. You are always talking about salary as income and ONLY way for it. 3500 salary, employed by a CEO of a company, missing salary in IT boom etc! Cant you work by yourself?
    5. I for one have a different view than MBAs. My IIT or IISc degree, anyone of it, will any day fetch me the best salaries in town. I have gone beyond it. When I left my job in 2003, I wanted to realize MY WORTH beyond these degrees. I pursue a career which uses only my brain and knowledge not just two pieces of GREAT PAPER. No doubt I have the best education one can get, but I think education is beyond degrees. Thirukural says
    Sendra idathil selavida thee thorie,
    Nandril paal uyapathu arivu
    (I couldnt manage to cut and paste it in original!)
    While you wont understand it, just try to learn it as a homework from some sensible tamil professor!
    I have been able to support myself well with my currrent operations and I dont want to discuss money beyond this. As Thirukkural says, I can survive anywhere.
    What I need to tell OTHERS on this board is
    Ep porul yaar yaar vai ketpinin
    Ap porul mei porul kanpathu arivu
    So your being deceived by Wiseman and his incompetence is not Wisey's fault alone but rather your level of ARIVU. I will let you folks to learn Thirukkural at home!

    In summary if Wiseman wants to call himself Materialistically Rich, I dont even want to compete with him. Since I am a guy who has seen the peak of materialism and have voluntarily given up many things. I live a comfortable life and I value ARIVU (INTELLIGENCE la WISDOM) to trucks of gold. However when we are talking about RE I can only price something for what it is worth. Otherwise it has to be charity (and this is not the forum for that) or fool hardy. So if I am doing business, I strive to excel. If I do writing I strive to excel. However I think my strength is Knowledge not Wealth and Power.
    Finally dear wiseman. U WERE like an undisputed banter king here. U used a set of jalras and were writing whatever you pleased when I arrived in late 2008. Today you know your plight. You also always abused and when I tell you the truth about yourself you call it as abuse. Actually truth hurts and especially to liars. So your hurt is not my fault dear.
    I did not enter this forum like you for some payment. How else can I explain your lying low in front of the mod. I dont! I dont get paid here. I wont do such stuff. My independence of THOUGHT cannot be bought! And I have told that clearly to the mod. Infact I have wished him/her well to debar me and he/she has not. That shows my worth. A person of worth does not have to fear others, he knows not fear.
    Dear Wiseman you really need to learn a lot about that first Thirukkural I said above. I can survive anywhere, you cant even last without a bunch of jalras (props!).
    Please realise your worth. I am not here to fight with you as it WASTES my time. I was ignoring you but your earlier post seemed to show as if you were changing colours. I gave you a chance but you unfortunately showed your class again.
    The future will be different!
    Cheers.
    Cheers.
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  • Originally Posted by wiseman
    Nats,


    I could buy a 2400SFt plot (land) around half a km from the Koramangala BDA complex for less than 15k - 4 months gross pay for me and I got 2 of them! :D I still hold the view that much of the wealth that people create is more by accident than by their astuteness - unlike you who thinks you dreamt up this 2004-08 boom back in IIT in the early 80s!


    The guy who tells all and sundry to sell out their RE including land and invest it in FDs and reenter after a fall, is stating that he bought land in Koramangala and stresses that he holds two of them.
    And you silly followers of this guy believe him? Is it not technically correct to call him LIARMAN and his followers IMBECILES!
    If Wiseman is even a normal person, no need to be Harichandra, he would not be telling others to sell out when he himself holds. I havent met such an adamant liar in my life. Even someone who hides a full pumpkin in their curd rice needs a lesson in LYING from Wisey.
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  • Originally Posted by Natarajg007
    Strong I though you were banned? U always suspected that I was the mod! Now how come u r released out of the jail and let loose here? By me? LOL! Enjoy your BS.
    After all u will abuse and then when I retaliate you will cry like a baby. Then Wiseman your paymaster will use that as an excuse to say I abuse him, while infact I just tell facts about the missing grey matter in all ur brains.
    Enjoy Strong! After all u, Wisey and the other bear mouseys here are basically cowards who will go for their mom's pallu at the slightest fear!


    How about you Nattu,
    You hide under/inside your father's lungi? paathu kanna paathu, naarida poguthu.
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  • Interesting

    An interesting observation by anon on another blog:


    housing prices have appreciated at 12% CAGR. Inflation over the last 20 years has averaged around 12% as the Govt prints money to make up for the difference between revenue and spending. We all know how populist our governments are, and thus cannot control spending.

    It is natural that housing will grow with the rate of inflation. This is because, people tend to spend a certain fixed percentage of their income (maybe around 30-50%) on housing. Hence, as incomes go up with inflation, housing will also go up with inflation. Actually it is not housing, but the value of land. More income in people's hands will mean people paying more for land. In fact, consumer price inflation contains rents as one of its biggest components, about 30%. Thus, by definition, expanding the money supply will lead to inflation as more printed notes go into people's hands.

    However goods like cars, electronics, and other items, will in general not appreciate at the same rate of inflation because of efficiency and productivity improvements in the manufacturing process. These also form a smaller component of the basket of goods used in the inflation calculations. This is one reason a Maruti 800 costs only about 30% more today than in 1998. For a more detailed breakdown of the basket of goods and services used, one can go the RBI website.

    Rents, food and grocery costs, medical costs including pharmaceuticals, and educational costs form the majority of the basket of goods and services in the inflation calculation.

    Now, real estate prices go through booms and busts, and the average comes out to be 12% or so. However, it should also be noted that interest rates have also gone up and down during these periods, with a lag. This is because when the money supply increases, leading to more printed notes in people's hands, which leads to them bidding up prices for housing, but also causing banks to lose money as their debt is inflated away in cheaper rupees. After all if money supply becomes 10 times in one year, people's wages are going to go up by 10 times, which would lead them to pay off the entire bank loan in one year itself with cheaper rupees. That is why banks immediately raise interest rates so that people cannot inflate away their debts.

    So, the point is that investing in a fixed deposit would lead to a lag in the inflation adjusted returns, thus with a slightly lower appreciation rate compared to housing. However, it will not be volatile like housing prices. Unless one does not care about one's principal for about 20 years or so, then it would be ok to invest in housing.

    For people looking to buy a property for themselves and not for investment, and want to stay in the property for 20 years or more, the only metric that really makes sense is affordability. After a serious correction making properties affordable, and achieving job security, it may make sense to buy.

    For investors, they should probably wait till the correction completes its cycle before buying near the bottom. Even if they miss the bottom it is ok, but at least their investment will not suffer large losses, at the cost of some missed opportunity to the upside.


    Wat do u say
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  • Perfect ...

    Originally Posted by Sansei
    An interesting observation by anon on another blog:


    housing prices have appreciated at 12% CAGR. Inflation over the last 20 years has averaged around 12% as the Govt prints money to make up for the difference between revenue and spending. We all know how populist our governments are, and thus cannot control spending.

    It is natural that housing will grow with the rate of inflation. This is because, people tend to spend a certain fixed percentage of their income (maybe around 30-50%) on housing. Hence, as incomes go up with inflation, housing will also go up with inflation. Actually it is not housing, but the value of land. More income in people's hands will mean people paying more for land. In fact, consumer price inflation contains rents as one of its biggest components, about 30%. Thus, by definition, expanding the money supply will lead to inflation as more printed notes go into people's hands.

    However goods like cars, electronics, and other items, will in general not appreciate at the same rate of inflation because of efficiency and productivity improvements in the manufacturing process. These also form a smaller component of the basket of goods used in the inflation calculations. This is one reason a Maruti 800 costs only about 30% more today than in 1998. For a more detailed breakdown of the basket of goods and services used, one can go the RBI website.

    Rents, food and grocery costs, medical costs including pharmaceuticals, and educational costs form the majority of the basket of goods and services in the inflation calculation.

    Now, real estate prices go through booms and busts, and the average comes out to be 12% or so. However, it should also be noted that interest rates have also gone up and down during these periods, with a lag. This is because when the money supply increases, leading to more printed notes in people's hands, which leads to them bidding up prices for housing, but also causing banks to lose money as their debt is inflated away in cheaper rupees. After all if money supply becomes 10 times in one year, people's wages are going to go up by 10 times, which would lead them to pay off the entire bank loan in one year itself with cheaper rupees. That is why banks immediately raise interest rates so that people cannot inflate away their debts.

    So, the point is that investing in a fixed deposit would lead to a lag in the inflation adjusted returns, thus with a slightly lower appreciation rate compared to housing. However, it will not be volatile like housing prices. Unless one does not care about one's principal for about 20 years or so, then it would be ok to invest in housing.

    For people looking to buy a property for themselves and not for investment, and want to stay in the property for 20 years or more, the only metric that really makes sense is affordability. After a serious correction making properties affordable, and achieving job security, it may make sense to buy.

    For investors, they should probably wait till the correction completes its cycle before buying near the bottom. Even if they miss the bottom it is ok, but at least their investment will not suffer large losses, at the cost of some missed opportunity to the upside.

    Wat do u say



    Anon is absolutely right. In the best of cases the gains are in the range he/she is talking about. For one to get such returns long term, he/she has to time it to perfection, locate it to perfection and hold on for a long time before seeing such returns - please note that compounding is not a linear graph but an exponential one, so the real gains come only towards the end of the period!

    A majority of RE plays in India (as also the world) do not even give these returns. Therefore, its best to see it as a living requirement, buy it when it has hit an affordable level and is on the early upswing and do not have to many hopes of it running away in the immediate future.

    cheers
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  • Originally Posted by strongsville
    How about you Nattu,
    You hide under/inside your father's lungi? paathu kanna paathu, naarida poguthu.

    Ignored! Messages from a sidey kickback of another guy will not be answered unless I am terribly bored. So you can write anything!
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  • Originally Posted by Natarajg007
    Ignored! Messages from a sidey kickback of another guy will not be answered unless I am terribly bored. So you can write anything!


    Same thing with me. Tell me is there anyone who is giving a honest response to your crap? Nobody cares you in this forum. You are a biggest joker/clown in this fourm.

    I don't care whether you ignore my post or respond to my message. Nobody cares you in this forum you Idiot. First u understand that. LOL
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  • Investments in RE stocks new way

    Hi,


    in these discussion we have missed out the effects of increased FD in real estate and the launch of REIT's in india.

    As per news paper reports, only 20% would be allowed in a project/ bldr?

    Could not clearly understand the points of the writer. Confused me .

    However, the bldr will get one more saviour in these troubled times. The new Govt can also relax FDI norms in the coming weeks.

    What will the effect???

    Will prices go up
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  • A lot of bad language is being used in the chennai forum. Its very indecent and takes the interest out of the session.

    Good information is getting hidden underneath this indecent posts.
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  • Originally Posted by contra
    A lot of bad language is being used in the chennai forum. Its very indecent and takes the interest out of the session.

    Good information is getting hidden underneath this indecent posts.

    Dont worry contra. That is what the bear cartel has been doing for long. Trying to take on anyone who speaks bullish. Looks like a coterie has a serious SHORT problem in RE ! Truth might not emerge for sometime and when it does the folks who are missing the bus now can only cry again!
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  • what happened to jay2008, are you still holding on to your stocks Bank of ireland and suzlon energy:D.

    so you want to buy RE after making money in stocks:p
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  • There is no other investment better than stocks now.

    Originally Posted by contra
    what happened to jay2008, are you still holding on to your stocks Bank of ireland and suzlon energy:D.

    so you want to buy RE after making money in stocks:p


    Contra,
    Thanks for making this thread alive.

    I am still holding IRE and Suzlon. My stop loss for IRE is 8.00. I recently bought two REIT stocks, one is BEE ($1.00) and the other is RAS. This REIT stocks will pay good dividends when the market improves. You also try this one :).

    I have Lloyds banking group ADR (895 stocks), the dividend is 85 cents per stock .
    It looks like they are going to pay in cash. Lloyds has 2 dividends per year and the next dividend is on Aug. It may be around $1.50.

    I recently sold ACAS (1000 stocks at a price of 1.75/stock). It is really a bad move from my side :(. They recently paid $1.07 dividend (stocks).

    From this you know what I am doing.
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  • Its when you sell that counts!

    Originally Posted by jay2008
    It looks like there are lots of negative sentiments towards stocks. I am not advocating investing your entire savings in stocks. At the time of writing this, "Bank of Ireland (ADR)" reached to $10.50 from $9.00 and suzlon energy reached 105 Rs. I know “exit” matters.

    Most of us find RE as a safe investment, which is true. But one should think how much return they will get if they invest in the already much appreciated RE. Decide yourself.


    Jay,

    Your approach is right. Never mind what others are saying. I have also been in stocks since 1982 and have such picks as Infy at 110 (post IPO), Satyam at Rs.6 and so on. I know for a fact that - if you have the same leverage in RE as in stocks and not have 9:1 leverage where you put down 10L and bank puts down 90L - stocks beat RE hands down over the long run.

    To give you an idea, a particular stock I bought in 1986 with 5k around the same time the Koramangala property went for 16k is now worth far more than the said property. And remember, this property has probably the highest roi during this boom period since it was acquired at an almost ideal time. Nevertheless, the said stock beat it hands down (and if I had reinvested all the dividends every year the roi would be much higher!). And I can sell this pharma stock single share by single share anytime of the year and recover my money with 5 days. Try that with RE!!!

    Btw, I too caught the 9th March bottom right on the ball (part luck catching the exact datet, part technical analysis simply by looking at the MACD pattern).

    Now to the matter at hand. When will you sell to recover your profits. Would you sell at 90? Or at 105 now? Or will you have sold at 145 which it reached a couple of weeks back? Stop loss is all fine, but you could very well get cut off and then the rally takes it further 50% up. So, what will you do to get the profits out?

    As I can see, the rally petered out around 4700 Nifty and will probably go down to 4000 in this leg (may even go much further if the monsoons fail finally). The next bounce upward will see the possibility of being a top for some time to come with little possibility of higher levels despite perma-bulls like Rakesh J talking about 20000 Sensx by next year.

    You might see 150 levels or higher in Suzlon by then. Consider selling around then and come back into Suzlon when it corrects to a much better 80-90. Double your quantity constantly and that is the first secret to real long-term wealth :D. When you select stocks, if you find them good, stick with them long-term and don't just trade them once and move along. Suzlon (despite some issues) is in the right field and I have good positions in this stock. I also happen to be on the board of a Wind/Solar company in the tiny/small turbine sector. The Hardware/ field in (Green)Energy Analytics & Management field is one of the next boom areas and I happen to have the luck of developing some of the for it :D. Stick with Suzlon as you might have got real lucky at Rs.40. Your avg acquisition price goes down and your quantities go up. One of these days, when you have 20000 shares in Suzlon and the price rises to Rs.1000, you will have become rich!:D

    One might ask what is this stock post doing in RE forum. Just put this here instead of on a pivate mail to you since there might be many more people holding stocks with decent profits but no way of knowing when to book it and take the money home!;)

    Oh, btw, this uptrend will probably last till latter part of second half of this year at most. Then the bad numbers of unemployment, foreclosures and effects of money pumping will probably take the Dow on its next leg down. Most markets will follow suit. So, most of our asset classes are not going anywhere fast. Just trading in a range till 2010-11 at least.

    And if you do your timing right, you would be executing a classic play by putting your profits from stocks into RE at just the right time. Make sure that part of your money remains in stocks always and the rest goes into RE. If you can pull it off, I know very few people who have despite their being very good with both. Tricky. But good luck all the same!

    cheers
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  • Originally Posted by wiseman
    Jay,

    You might see 150 levels or higher in Suzlon by then. Consider selling around then and come back into Suzlon when it corrects to a much better 80-90. Double your quantity constantly and that is the first secret to real long-term wealth :D. When you select stocks, if you find them good, stick with them long-term and don't just trade them once and move along. Suzlon (despite some issues) is in the right field and I have good positions in this stock. I also happen to be on the board of a Wind/Solar company in the tiny/small turbine sector. The Hardware/ field in (Green)Energy Analytics & Management field is one of the next boom areas and I happen to have the luck of developing some of the for it :D. Stick with Suzlon as you might have got real lucky at Rs.40. Your avg acquisition price goes down and your quantities go up. One of these days, when you have 20000 shares in Suzlon and the price rises to Rs.1000, you will have become rich!:D


    Oh, btw, this uptrend will probably last till latter part of second half of this year at most. Then the bad numbers of unemployment, foreclosures and effects of money pumping will probably take the Dow on its next leg down. Most markets will follow suit. So, most of our asset classes are not going anywhere fast. Just trading in a range till 2010-11 at least.

    cheers


    Thanks Wise man,

    A nice post with clear understanding of future and past. I will take this as an expert opinion. I am happy to see the balanced argument without any degradation of the opponent.

    I somewhat wrongly assumed that this rally would be sustained for longer time. If I have that understanding as you are, I had sold suzlon around 130, get back at 100 and made a nice profit. I will try to avoid this type of costlier mistake in future.


    "Then the bad numbers of unemployment, foreclosures and effects of money pumping will probably take the Dow on its next leg down." This is what I am witnessing now. whenever market started in full swing, the housing data brought the market to its knees.
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  • Just one reminder ...

    Originally Posted by jay2008
    Thanks Wise man,

    A nice post with clear understanding of future and past. I will take this as an expert opinion. I am happy to see the balanced argument without any degradation of the opponent.

    I somewhat wrongly assumed that this rally would be sustained for longer time. If I have that understanding as you are, I had sold suzlon around 130, get back at 100 and made a nice profit. I will try to avoid this type of costlier mistake in future.


    "Then the bad numbers of unemployment, foreclosures and effects of money pumping will probably take the Dow on its next leg down." This is what I am witnessing now. whenever market started in full swing, the housing data brought the market to its knees.


    The most important knowledge of all ...

    1. Once you identify a company managed by good management, stick to it long term.

    2. You will only sell good companies when you find them very richly valued. You will use the subsequent drop in prices - when valuations come down drastically, like now - to multiply your holdings. You do not control price or even predict them. You can only control quantity and multiply them.

    As you multiply quantity without any further addition of investment, your average cost of acquisition declines further. Also, your dividend amounts keep increasing thereby giving you better ROI in cash every year and that too tax free in your hands. If you can afford it, you might even plough back the dividends into the same counter to provide the turbo-charging to your investment plan.

    Keep ploughing back your returns into the same sound companies. The pharma company is Cipla which I first bought in early 1986!!! :D

    cheers
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