Ignore the crash, and have some beer and skittles

Thomas Anderson says:

09:58am | 10/08/11

Well, that is good news for now, but there is the potential of you and many others losing their jobs, which would inevitably lead to higher crime rates, civil unrest etc.

On a side note, now is the time to invest, as you can get some stocks for ridiculously low prices. The question is when to buy, we know stock is cheap today, but will it be cheaper tomorrow? Hmmm?

I had the intention of switching my super from 100% shares to the cash option just before this whole thing started, but its a bit late now, so I’ll stick it out til the prices bounce back up.

Kika says:

12:10pm | 10/08/11

So the solution is to buy direct from China - Ebay and Strawberry net. Buy up Australia! China needs us.

LeftRightOut says:

12:27pm | 10/08/11

The one bit of advice I didn’t see there is that retail investors are the one’s who get screwed.
The bounce last night in the US was less about confidence in a positive outlook, and probably more about a good old “short squeeze”.

Easy money has been made on all this negative news in the US and EU allowing the big guys to short equities (borrow shares at high price to sell, cover the short by buying the same equities back at a lower price - they keep the difference).
When things look like bottoming out for a bit, all these dudes cover their shorts at the same time. This leads to frantic buying, driving prices up.
The late trading bounce yesterday, for me, was a classic short squeeze, where these people shorting stocks, panic buy to cover and lock in their gains.

If you don’t understand how Mr Market works, then stay out… you WILL lose money.

Knemon says:

03:54pm | 10/08/11

I got a laugh out of David Koch a few weeks back on his morning show (I haven’t watched it since) They were talking about the problems in Greece, someone asked what the currency of Greece was…David’s bimbo sidekick said she was sure it was a dollar and David said don’t be silly, it’s a Drachma. Good one David. I’d be wary of his advice.

marley says:

08:35pm | 11/08/11

@Knemon - well, to be fair, it used to be the drachma, and it’s likely to be the drachma again in the not too distant future.

Shamwow says:

09:54am | 10/08/11

Doing the above equals recession. That’s not what he is saying.

Anna C says:

11:42am | 10/08/11

I thought I would throw in the SAVE SAVE SAVE part. Bugger the retail industry ...now is not the time to spend. We are headed for a recession anyway. Now Shamwow, you can waste your money trying to prop up the retailers and save the economy if you like but I won’t.

Everyone needs to continue paying off their debts and saving hard to shore up their future financial position.

Geoff - Brisbane says:

09:40am | 10/08/11

Whats really unAustralian and unethical is idiots popping out 3 kids buying a 4x4 and a 5 bedroom house on loan and expecting the rest of us to feel sorry for them, Like they were born with the debt. It gets worse when they expect us to fork out money (ACA, Today Tonight) for them.

They only have themselves to blame

Jack says:

09:44am | 10/08/11

Gee, maybe the ‘bloody unAustralian’ banks should stop lending the poor, struggling families money to buy a home. They can save up for it and pay cash.

Gasman says:

10:35am | 10/08/11

Jack and Geoff you just don’t get it.
The banks and what I call the “Harvey Norman syndrome” market themselves to these people which makes them believe they can afford the debt. They are just average people, which in the 21st century Australia should be able to afford a house, car and 3 kids, however they are manipulated, brainwashed and encouraged by the giants of industry to want more.
Most people reading these posts would probably not be mortgage belt folk on fixed incomes with no avenue for advancement and after all, this is exactly what the financiers want, drones for life.
Oh and I hope they do pop out 3 kids otherwise Jack and Geoff, who is going to wipe your bum when you are old?

Steve says:

11:45am | 10/08/11

Gasman. Whose back does your company make money from? If you have been in business for 30 years I will wager that your “mark ups’ are far higher than the banks. Banks make very big profits because they are very big companies run by clever people.

If you retained asbout 40% of your profit year after year and did it for over 100 years you would have a pretty big company making big profits. Would that be unethical?

I bought Commonwealth bank shares for $6. The float prospectus provided plenty of information. Was it dumb and unethical to buy those shares?

If people stopped buying shares then all the wealth would be kept in the hands of the people who currently own the shares. There would be less start up capital for new businesses to open up or existing businesses to expand. People who currently owned shares would not be able to sell them if there were no buyers.

Kika says:

12:06pm | 10/08/11

I agree with you Geoff. Common sense would tell you that if you earn a modest income, and 99% of it is used towards the mortgage for your McMansion and your SUV that any change in the market you’re going to be in for trouble.

I don’t understand. I feel for the families out there who are suffering but if you were silly enough to get yourself into this sort of trouble without thinking it through who is to blame? It’s like people not being insured for a flood who then want someone to blame when it does flood.

Personal responsibility vs Corporate greed???

Jack says:

12:32pm | 10/08/11

Hilarious. The banks are forcing dumb people to bid up property against their will.

I bet fast food is to blame for your waistline too, right?

The only true ‘unAustralian’ thing seems to be personal responsibility.

Tubesteak says:

01:01pm | 10/08/11

Gasman
If people are too stupid to think for themselves then they deserve to be fleeced.

A fool and his money are soon parted. I have no symptahy or time for fools.

No-one is forcing them to mortgage themselves to the eyeballs or get loans for stupid things they don’t need.

Gasman says:

04:57pm | 10/08/11

Many decades ago when I applied for my 1st home loan, I had to crawl over broken glass to get it.
However, before the GFC it was all too easy to get credit and yes, now a lot of people need their finances managed, not burned at the stake like some would have.
Really, have you all forgotton what lead to the GFC in the first place?
I suppose those who don’t agree with me also buy Coles milk at $2 a ltr.
I buy Dairy Farmers at a $1.60 premium.
If you can tell me why I do this, you are halfway to understanding what I mean!

Huh? says:

03:06pm | 11/08/11

Gasman, do you like sending your money to Japan? Is that the reason you buy Dairy Farmers milk?

Gasman says:

05:33pm | 10/08/11

I agree with most of your comments, Kika.
However, if everyone rented, what would become of Bunnings!

Gasman says:

05:05pm | 10/08/11

By far the most informed comment here today!

Kika says:

03:51pm | 10/08/11

I agree. As long as you are up with what your shares are doing I can’t see the problem? As you would be with a mortgage…what’s the difference in watching shares?

Glenn says:

04:24pm | 10/08/11

@Matt - sounds like you are selling a Day Trading kit.

If so can you do me a favour and introduce me to someone “other than the people selling the “tools” or the brokers who earn a fee each time you trade, that actually has made a killing.

It will be a whole new experience for me.

Bruce says:

12:22am | 12/08/11

Matt: If this were the situation there would not be a poor person in the world. Lets just all play the share market and get rich. !!

Matt says:

03:50pm | 12/08/11

@ Glenn - I am not selling anything, and day trading is for mugs. The cycles i refer to play out over weeks, months and years. The brokers are irrelevant, the commisson paid to them is dwarfed by the profit made on a successful trade. I also don’t deny there are many systems of analysis for sale that require an element of luck or simply don’t hold true over time.

@ Bruce - this is the situation and your comment is so naive and childish i’m not sure you aren’t being sarcastic. If you’re not; there is no possibility of everyone getting rich. The majority of people don’t have the required determination, commitment, persistance, intelligence or knowledge. For many people the type of analysis simply doesn’t suit their skill set/personality, nothing wrong with that.

My point was the market is predictable enough, enough of the time, to make a large profit. You just need to know what to look for which is all in the chart and never in the newspaper.

Anichol says:

06:57pm | 19/08/11

@Matt
You only get rich by someone becoming poor.
The share market is a parasites game.
Watch the market grow then fall, those who sold during the fall took the money from those who bought when it was growing.
Silly game it is.
Pitty those who arent part of this share market game have to suffer when things go bad.

Tim says:

10:06pm | 10/08/11

You do realise that you can put your super in cash if you don’t like shares?

jf says:

09:52am | 11/08/11

You do understand that you can invest your super in anything from cash to property to shares don’t you?

The choice is yours. Still, I guess it is far easier to whine and blame other people than actually take responsibility for your own affairs. After all, that requires effort and accountability.

Tiger says:

10:52am | 11/08/11

Speaking of super… it’s high time the government stopped taxing it so much and actually encouraged us to save more for our old age. Make it a more attractive investment ! After all with our aging population, you don’t want to be paying out so much in pensions, do you? Or is that the socialist way of creating reliance on the government and therefore control of the masses??? And don’t start me on taxing “non-dependants”, I thought we were done with death taxes? A tax by any other name…
oh and one more thing, ZSRenn, there is no need to personally attack Kochie!

ZSRenn says:

08:06pm | 11/08/11

@ Tim and jf: All you can find to do with my statement is tell me where I can stick my super. I shouldn’t have to suffer little gain because the big dogs manipulate the market to rob me of it at every opportunity or are they the only ones allowed to gain benefit from high risk investment. Both of you are nothing but sheep.

@ Tiger: I will attack anyone, who sits in a gilded cage, telling us every morning how wonderful Australia is, whilst in a position of influence. Ignoring the fact that nearly 10% of Australians live under the poverty line, and not using that power they are blessed with to do something about it.

David Koch and Good Morning Australia are one of the worst offenders!

marley says:

08:41pm | 11/08/11

Well, ZSRenn, I’ve got a fair chunk stuffed away in super, and while I’d have to say it’s been a tough couple of years, I actually am now just a smidgen ahead of where I was before the GFC - that’s not a great performance, but it isn’t as though my super got stripped either.  And if and when the markets improve, the equity part of my portfolio should do quite nicely. Until it does, the cash component protects me. 

You need to do a bit of reading about diversifying your investments - nobody at any age should be entirely in equities, and the older you get, the more you should have in cash, bonds and other conservative forms of investment.  If, at 52, your entire portfolio is in stocks, you’re just not doing your homework.

jf says:

08:39am | 12/08/11

ZSRenn says:08:06pm | 11/08/11

Classic leftist mantra. Entitlement - “I shouldn’t have to”. Everyone else is to blame - “the big dogs manipulate”. Want to tell people what to do as long as the rules don’t apply to them - “forcibly tied up in superannuation”.

If you don’t like the volatility that marketability and liquidity bring don’t invest in them. If you think that the market is manipulated, don’t participate in it.

Mate, I can tell you I’m not a big dog and it is Australian shares all the way for me. I made a conscious decision, with guidance from my investment adviser, to put my super into Australian listed equities. The capital value of those investments has taken a hit because of the crap that’s going on in the market at the moment. I say bewdy - the companies that I own shares in are still making good profits and paying my super fund high dividends. And each month I am contributing 9% of my income and buying excellent companies at stupidly low prices.

As I get closer to retirement I will build up my cash so that I don’t have to sell when the bullshit hits the fan again, as it inevitably will. In the meantime, I’m loving buying BHP below $40, CBA on a yield of 10%, RIO near $60 and so on.

As to your view of Sunrise and Kochie’s bubblegum finance - agreed. Their ‘accepted wisdom’ approach to personal finances have lead a lot of people to make overly simplistic decisions in relation to their personal finances and have suffered as a result. There is no better example of this than the hundreds of people in Qld who bought discount insurance and ended up with policies that were wrong for their needs.

Gasman says:

12:55pm | 11/08/11

At last some commense sense, unusual these days!

jf says:

11:38am | 12/08/11

“listening to economists or brokers that suggest “well its 20% cheaper so it must be a bargin” is of little use, especially if the asset was 50% to expensive in the first instance!”

I have never heard an adviser or broker with any sort of experience and education say anything remotely like that.

In fact, any adviser or broker (including my own) would make exactly the point that you have just made.