Well, unless you have a crystal ball that could 100% accurately tell you what will happen in the future, how do you know whether your preparation could cover the worst?

Anyway, if you go max in preparing the worst, you won't be investing already....

You will avoid risk to avert disaster...

Greed is good. BBB all the way.

I hav never bother to predict future market movement....
I only prepare and plan for myself things to do when;
1. Market keep going up annually 10-20%
2. Market stagnant, quiet, not much activities.....
3. Market correction, 10-20% down
4. Market clash, 30-40% down....
5. Any mishap tat require cash
6. How to enjoy myself when market up.....

Market crash 60-70% down, then how...?

somebody prepare for that....oooo....

Actually I'm more to disagree on using a few data and statistic to determine how the market situation... The real situation is always more detail info needed.... Everything is changing so drastically, those simple data and statistic doesn't provide any insight of situation....
Eg: From 2008 to 2012
My debt grew - 400%
Does that means I'm in trouble?
NO. Not necessary. Because....
My liquid cash grew - 600%
Does tat means I'm safe?
NO. Not necessary. Because.....
My debt in 2008 is 500k, 2012 is 2mil
My liquid cash 100k in 2008, 600k in 2012
In %, my cash/debt is 20% in 2008, 30% in 2012.... By percentage I'm doing better, by figure I'm in higher risk as i now have 1.4mil debt.
Does tat means I'm in deep trouble?
NO. Not necessary again......
2008: Debt 500k, Asset Value 600k, debt/asset 83% (real deep trouble)
2012: Debt 2mil, Asset Value 5mil, debt/asset 40%
This also means tat I'm now more sustaining to market correction!
Data, statistic tat give a general view doesn't spell out the real scenario. There are many possibilities and detail tat one have to look into.
I don't mean everybody are the same, I'm saying don't judge by a simple data or statistic, to look into real problem, there is more to it then those data.
P/s: I can still continue to change my above example to a different situation.

This post has been edited by AppreciativeMan: Mar 29 2013, 11:20 AM

Fly off from your e-tiara together la....

You dont need crystall ball you just need risk management.
It can be done. I have sold 1 unit and cash out the profit but i am still 75% invested. The proceed from the sale of the house can sustained 2 years of me without working, paying my installment, cost of living and suffering a BLR hike of say 10%.
so my worst case:
1.) i loss my job for 2 years
2.) BLR goes to 10%
3.) I am not able to rent out all my units/ or not able to collect rental
4.) I am not able to sell any of my units or re-mortgage for extra cash

I am not a BBB or DDD camp.
I only know, whichever way the market move, i benefit.
Low buy more (as long i still have my job), up....paper gain lor....

Bro, if there is onli 1 risk taker miscue, then too bad for tis person lo. But cant assume entire grp of investors ll do the calculation so badly gua.

Stimes, investors r far beta than bankers le.

furthermore, calculators r very helpful. wont go too wrong la.

Crystal ball wont tell either way. Its gd to b armed at anytime. Noone can tell wats gonna happen tomolo. Neither isit gonna go down.

Bang, ni cadangan ke soalan???

Yeah bro, risk management ll hav a accelerator n a brake pedal. Just make sure dun accelerate too fast lo. But dun stop entirely. Very risky in highway. There r cars behind.

Just joking. Cheer.

it is quarter by quarter in the website, anyway lets look at house price index for 10 year period

http://www.globalpropertyguide.com/real-es...ices/M#malaysia








This post has been edited by cranx: Mar 29 2013, 01:31 PM

is now bear trap or bull trap?

This post has been edited by chubbyken: Mar 29 2013, 02:49 PM

Can I ask a stupid question? Hypothetically - what if the crash really happens, and market value slump by 30%,
- What the rich with holding power will do?
- What will the middle income fully leveraged will do?
- What will the down camp will do - for middle income group with average savings?
- Life goes on for the poor?

Here's my 5 cents..

What the rich with holding power will do?
-Keep holding, or buy more. Mind you, they are not going to simply buy, but bargain hard like hell for value buy because they know they are in the position of strength. That's why they can become rich. So price wont shoot up again so soon.

- What will the middle income fully leveraged will do?
If fully-leveraged, then they will either go bankrupt, or forced to sell cheap cheap to avoid bankrupcy. And loss all those profits gained in the past five year.

- What will the down camp will do - for middle income group with average savings?
Err.. who told you down camp = middle income group with average savings? I know some down camp ppl with five figures income and holding a lot of cash waiting for value buys.
For those in middle income with average savings but not currently in debt, market slump 30% is good news. Can buy at 30% lower price wat..

- Life goes on for the poor?
For those really poor, they are not even in the market. Of coz life goes on. Maybe can get new neighbours at their flats from the second group above.

HAHAHAH!!!

Good one on point number 3. I also know some down camp fellas with 5 figure incomes... the cash stockpile also pretty respectable... and I think they will also be practicing what you said in answer number 1, they will bargain like crazy... If market slump 25% in first year, this approach will make it slump further and further... too scary to imagine...

I know a few uncles, used to very rich... each month also 6 figure income... big house, big car, everything also big (LoL!!!!) suddenly all gone... now local car, terrace house... sometimes I see them its quite pitiful also... sigh...

Well... are prices still going up? If yes, faster buy.. buy buy buy...

2008 bear trap, now denial stage.

1. Since they're rich and with holding power, they'll continue holding it and probably purchase more
2. Since they're fully leverage, that will means they are in trouble. They'll have to cut their lost and if its insufficient then they may go into bankruptcy.
3. If u are asking on 'middle income with average down camp group' then I'll see still no action from them.
Reason 1: Prop price may be cheaper but they may still need almost the same amt (or could be more) of cash to purchase prop
Eg 500k prop,
90% LTV, cash up front 50k
70% LTV, cash up front 150k
If market has a correction of 30%, bear in mind that bank will give lower valuation preparing for the worst too..
500k - 30% = 350k, bank value will be easily 10-15% different.
If bank value 300k,
90% LTV, cash up front (350k-300k) + (300k x 10%) = 80k
70% LTV, cash up front (350k-300k) + (300k x 30%) = 140k
Reason 2: Fear. When bank gives lower value, greater fear will occur tat price going down further, or what if they lose their job at this time and etc.
4. Who knows.... Maybe it become opportunities to them.....

.

This post has been edited by Rooney1985: Mar 29 2013, 04:00 PM

If one keeps buying now but will buy some more kau2 during crash, how? Is he a up up person or down down person?