16 thoughts on “Reliable Investments in todays market

  1. I like the Uzi idea. There’s some good profits to be made in them if the government deregulates the market.

    But seriously, I think now is a great time to buy something. If you can borrow money, buy distressed assets. If the lender goes under, it will have a bigger problem than you. If you just leave your money in the bank and it goes under, you’ll have the bigger problem.

  2. yea, but what do you buy, David.

    Saw an agent friend today while buying a coffee. He sold this guy a house a few weeks ago for 4.5 million/ (he deals in expensive property).

    the guy called him, told him he has lost a lot of money in the stock market, can’t sell his sydney home and asked him to put it back on the market. the broker thinks he’ll be lucky to get 3.5 million.

    There’s a lot of commercial real estate that will hit the market next year as a result of distressed sales.

    Hers’ what i think.

    I bought a lot of Citigroup, JPmorgan and BofA. These guys are now the teachers pets (fed) and are picking up really juicy morsels.

    Wachovia’s franchise is worth 25 bucks a share and citigroup picked that up for 2 bucks as an example.

    Bofa picked up Merrils for 29 bucks which was still cheap

    and JPmorgan bought wash mutual for next to nothing as well.

    These are amazing deals going through.

  3. Commercial real estate is top of my list. I’m not big on foreign shares due to the exchange risk.

    Citi took on Wachovia’s mortgage book I think. They would have had to pay me to take that. Merril L same story. They might be cheap but there’s a lot of crap there.

  4. Buy
    1. Gold (ASX ticker ‘GOLD’)
    2. Term deposits in the ‘Big 4’ banks
    3. Shares of insolvency practices

    1. Investment property
    2. Your weekend getaway place
    3. Bank shares
    4. Any company that is not generating positive feee cashflow and hence is reliant on debt funding.

  5. pom

    if they do the bailout, they will borrow the funds through the bond market which isn’t deflationary. How does gold do well in the that period?

  6. David – i’ve become very bearish on the property market lately (despite being a homeowner myself). i think i’ll get my thoughts down in a post later this week. in brief, though the demand/supply imbalance still exists, more important now is the availability of funding and employment prospects.

    the former is waning fast and the outlook for the latter is worsening (though not a problem today).

  7. Australia:

    JC and Pommy back and forth on ‘don’t believe the Fed can keep tapping the bond market indefinitely.’ Perhaps it our two peoples separated by a common language (Churchill’s famous joke), but to Americans, “tapping” into the bond market would describe the Fed selling bonds in order to put cash into its vaults. This is exactly the opposite of what the Fed has been doing for the past several weeks; if anything, the Fed will BUY bonds, in order to flood the market with cash.

    Secondly, the ‘flight to safety’ from the melt-down has driven interest rate yields on government T-bills to near zero. In the open market, investors are buying cash assets with little or no yield, in order to avoid even the faintest hint of risk. The surge in T-bill purchasing is flooding the Treasury with cash.

    The problem is still the credit crunch, not liquidity; the U.S. economy is flush with cash…which nearly everyone is holding on to with both hands and sitting on it.

    The one bright spot in the debacle is that the speculators are beginning to fly to slow circles overhead. Fire sale prices in real estate are starting to attract intrepid souls with cash to spend; in the market meltdown, the specs are beginning to sniff out a bottom.

    The Senate votes soon on a revised bailout plan. Unlike the House’s vote yesterday, two thirds of the Senate members are insulated somewhat from furious voter anger at the meltdown; they might actually approve some form of bailout plan.

    Wasn’t it Marxist Otto Bauer who argued in 1919 (the Russian Revolution) that the best method for communism to take over capitalism was to simply nationalize the banks? His ghost today walks the halls of Congress, chuckling.

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