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Is it Over - Bubble burst by liquidity Crisis

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Is it Over - Bubble burst by liquidity Crisis

Last updated: June 24 2012
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  • #11

    #11

    Re : Is it Over - Bubble burst by liquidity Crisis

    Optimist. But also a realist

    Originally posted by vinay kumar View Post
    hello guys. dont u think that u all are reacting too much. i accept it is not a good time for our economy but we all have to be optimistic.

    i knw market is runingat the speed of a turtle , but rbi and fm are taking significant and appropriate steps to overcme this barrier. and u knw vry well that who wins at the end.TURTLE.

    If u want to invest ur money then investing in gold would be one of the good option. u can invest ur maoney in real estate also.

    wat say?

    Vinay,

    I'm the most optimistic guy on this discussion forum! Would you believe that?

    You might wonder. Is this guy perenially nutty like this? Or is this a post-Diwali syndrome ...

    Consider this. Above 20000 Sensex, I was a seller of everything I owned wrt Stocks. Today, with an average of 60% fall in bluechips and over 80% in RE stocks, I can pick up 3 times to 5 times the quantity. When stocks go back up to their highs, I will have a return of at least 300% to 400% besides dividends - which can be considerable.

    Similarly, with RE, I expect to buy a home/land at least 50% of its 2007 price in prime areas. That way, I save not just 50% but actually 100% since we will also be saving an equal amount in Bank Interest.

    Therefore, any investment must be viewed dispassionately and with knowledge of the market. This will not only help us make correct decisions regarding when we can buy and when we should sell. It also helps us maximise the size of the asset we can buy and may even help us buy in our most preferred areas instead of paying thru our nose and getting a junk flat in a remote area with absolutely no facilities.

    Which kind of person would you rather be?

    Regarding our PM, FM and RBI Guv, while I have maintained that we probably have the finest set of people in these areas world-wide, we must recognise that they are also only human. This crisis is created y someone else, is of such size that we will feel significant pain whatever the FM may do and this unwinding MUST happen so that the next boom comes up.

    Regarding Gold, you may be right. But for RE, the pain has not even really started - irrespective of what the builders are trying to talk everyone into. After all, what do you expect builders to say? That a tsunami of selling is coming?

    Such is life.

    cheers

    Comment

    • #12

      #12

      Re : Is it Over - Bubble burst by liquidity Crisis

      Same guys who were crying hoarse for a Crash in 2008 are still crying in 2012, I just wonder how many Bull mkt moves are u people going to miss till u finally join the party or should I say BUBBLE in your words

      Comment

      • #13

        #13

        Re : Is it Over - Bubble burst by liquidity Crisis

        Originally posted by arin_12 View Post
        But who know the Bottom. Every day morning you are seeing a new Bottom of the Stock market. It seems that it will go till 2010.
        stock prices have benchmarks - p/e , book value, dividend record, cash ratios - but RE is in uncharted territory without benchmarks. When you benchmark Indian RE with western countries than also our property is extremely overpriced. Greed has made us blind, and the blind definitely stumbles.

        Comment

        • #14

          #14

          Re : Is it Over - Bubble burst by liquidity Crisis

          Guys,

          It's useless to fight the Indian Perma Real Estate bull mentality.
          I wish every one holding Real Estate on loans in India the very best and to the traders who are trading on margin buying call options using 10-20% down on building stock which will be delivered over the next 3-4 years - You must have a lot of guts to do what you are doing!

          I hope the Realtors stay afloat and the stock gets delivered, the Balance of payments becomes a dream, the dollar does not slide to 65 -75 (If balance of payments hits us a 30-40% slide will have to happen). The NRI's who invested at Rs 54 will be invested at Rs 65. I hope rentals yields don't come back to their average of 4-6% (They were averaging over 4% for the past 45 years). If they do come back, our options will expire out of money big time.

          Comment

          • #15

            #15

            Re : Is it Over - Bubble burst by liquidity Crisis

            Originally posted by vinay kumar View Post
            is there any one who can diffrentiate between BANK RATE n REPO RATE?
            Bank rate, also referred to as the discount rate, is the rate of interest which a central bank charges on the loans and advances to a commercial bank.

            Repo (Repurchase) rate is the rate at which the central bank lends short-term money to the banks against securities.

            The reverse repo rate is the rate at which the banks park surplus funds with reserve bank, while the repo rate is the rate at which the banks borrow from the central bank.

            Bank rate - Wikipedia, the free encyclopedia

            Comment

            • #16

              #16

              Re : Is it Over - Bubble burst by liquidity Crisis

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              Comment

              • #17

                #17

                Re : Is it Over - Bubble burst by liquidity Crisis

                regret or wishlist??

                Originally posted by expat101 View Post
                Guys,

                It's useless to fight the Indian Perma Real Estate bull mentality.
                I wish every one holding Real Estate on loans in India the very best and to the traders who are trading on margin buying call options using 10-20% down on building stock which will be delivered over the next 3-4 years - You must have a lot of guts to do what you are doing!

                I hope the Realtors stay afloat and the stock gets delivered, the Balance of payments becomes a dream, the dollar does not slide to 65 -75 (If balance of payments hits us a 30-40% slide will have to happen). The NRI's who invested at Rs 54 will be invested at Rs 65. I hope rentals yields don't come back to their average of 4-6% (They were averaging over 4% for the past 45 years). If they do come back, our options will expire out of money big time.
                Is it your wishlist or regret?? Currency conversion is understandable but supply vs demand is driving the market for few years to come. There is not enough housing available and the potential buyer with money are increasing every hour and more so in coming time. Many of the NRI (not just USA... may be the least of them) who went away 20-30 years back are pouring in money to secure a space for them. Add to that the coming FDI and resulting boom. My friend, take a deep breath, forget the regret and figure out ways to secure a space for you and your family in the promising economy. Don't indulge in political circus that goes on in this country, you would be mistaken to draw conclusion about Indian economy based on that.

                Comment

                • #18

                  #18

                  Re : Is it Over - Bubble burst by liquidity Crisis

                  Originally posted by PappuPilot View Post
                  but supply vs demand is driving the market for few years to come. There is not enough housing available and the potential buyer with money are increasing every hour and more so in coming time.
                  It is opposite.

                  Comment

                  • #19

                    #19

                    Re : Is it Over - Bubble burst by liquidity Crisis

                    It will be very interesting to learn what those experts, who were dreaming of a "Bubble Burst" (atleast) from 2008 thinks NOW.

                    Aise, some experts still hope the same .. good part is, they are still expecting 20-30% discount where the RE price has increased by more than 100% in many areas in last 4-5 years.

                    Comment

                    • #20

                      #20

                      Re : Is it Over - Bubble burst by liquidity Crisis

                      Be a bull. But hedge with put options!

                      Originally posted by gharondabhai View Post
                      It will be very interesting to learn what those experts, who were dreaming of a "Bubble Burst" (atleast) from 2008 thinks NOW.

                      Aise, some experts still hope the same .. good part is, they are still expecting 20-30% discount where the RE price has increased by more than 100% in many areas in last 4-5 years.

                      Gharondabhai,

                      This is how to invest in the long time in such turbulent times.

                      Buy stocks at reasonable rates. Keep riding the bull as long as price rides above Moving Averages. When MAs are under threat, buy put options to protect against downside risk. Expire puts when uptrend re-commences. Sell when 100% are buyers at any price and get into FDs.

                      While I have called for crash since 2008, I sold RE only in Mar-Apr 2012 (and that too only in part!)

                      I'm still waiting for the inevitable decline in prices to reasonable valuations.

                      cheers

                      Comment

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