Forum Archive Index - February 2004

["david.gibson" <david.gibson@k.co.nz>]

Ahhh, Snoopy is back!  I do enjoy following these debates ...

In summary:

- The property market is equally volitile as the share market.  However the
continuous auction basis of sharemarket exposes that volatility
- Share market gains outstrip Property market gains, over time
- The Property market allows for a leveraged investment strategy due to the
cultural aversion of the banks to taking share script as collateral.

I agree on every point.  I would add the following:

- Property market is segmented, broadly, into commercial and residential.
Each segment has different market characteristics.  (You could argue that
the best exposure to the commercial property market is through sharemarket
listed vehicles (prop trusts, dev companies)).

- All these markets are founded on the same psychology - herd instinct (in
both buying and selling) - however, the residential property market is
highest in "emotional" drivers.

- The most damage is done when the "professionals" in these markets lose
sight of fundamentals and join the "herd" (speculative bubbles, busts)

- Earnings outlook and availability/cost of money (interest rates) drive
each of these markets up or down.  The psychological factors drive the rate
and extent of price movements.  (How's that for FA/TA tactfulness).

Hats off to Snoopy for the most clarity on the main points ...

/dbg


----------------------------------------------------------------------------
To remove yourself from this list, please use the form at
http://www.sharechat.co.nz/chat/forum/