Admission When Wrong

[wherebee]

HPCers tend to get painted in the media as a bunch of swivel eyed loons (to steal someones phrase). However, I think a strong part of being a rounded human is to admit when you are wrong. I'll go first:

1. Completely misread the ability of the UK gvt to avoid house price collapse post GFC phase 1
   
2. faied to see the equities run up over the past 12 months (in fact, liquidated my FTSE EFT at +7% from fear the market would collapse.)
   
3. failed to see the downwards leg in gold; no financial loss but if I'd had a crystal ball could have bought and then sold at peak to add to the house buy fund
   

Looking at all of these it seems I am too cautious to believe the ability of markets and governments to create gains despite generally negative fundamentals. I should learn from this.

Anyone else?

[Executive Sadman]

I guess i underestimated the complete and utter immorality of every single last politician.

[Executive Sadman]

That and the continued placidity of the british people to accept tiny, woefully built and horrendously overpriced homes.

[neon tetra]

1. Totally misread this one, too.

2. Luckily have held my nerve so far in this.

3. No exposure (as it's always been too high...)

[Vested Disinterest]

I didn't spot the Co-op troubles coming - and neither did the MSM really (I have a google news alert for each of the banks I am exposed to).

I'm only a current account customer so no biggie I suppose.

+1 points 1&2 of the OP.

[erat_forte]

I didn't spot the Co-op troubles coming - and neither did the MSM really (I have a google news alert for each of the banks I am exposed to).

I'm only a current account customer so no biggie I suppose.

+1 points 1&2 of the OP.

Most depositors don't call it that!

[inflating]

This reads dangerously like an Acceptance We Were All Wrong thread.

I fear a statue of Sibley will be unveiled in each town centre at this rate.

And on behalf of one of my favourite posters on here, may I aim this at myself:

[winkie]

....keep kicking the can.

[enrieb]

HPCers tend to get painted in the media as a bunch of swivel eyed loons (to steal someones phrase). However, I think a strong part of being a rounded human is to admit when you are wrong. I'll go first:

1. Completely misread the ability of the UK gvt to avoid house price collapse post GFC phase 1

2. faied to see the equities run up over the past 12 months (in fact, liquidated my FTSE EFT at +7% from fear the market would collapse.)

3. failed to see the downwards leg in gold; no financial loss but if I'd had a crystal ball could have bought and then sold at peak to add to the house buy fund

Looking at all of these it seems I am too cautious to believe the ability of markets and governments to create gains despite generally negative fundamentals. I should learn from this.

Anyone else?

I completely disagree, and it's not because I cannot admit when I am wrong, I'm wrong frequently and admit it. The situations you are describing are now in hindsight. The growth and seriousness of the credit bubble was accurately predicted by many on HPC, how the credit bubble would unwind was a matter of some debate with wildly different predictions, from deflation to inflation, some bi-flation, people even predicted that a greater credit bubble would be created. How it ends no-one can know, what we do know is the seriousness of the financial situation, and that's not gone away, if anything it's being made worse by the current polices.

How many of the bubble surfers admitted they were wrong? they have simply hid away from the debate, only to reappear when a piece of data supports their perpetual bubble world view.

A drunk person offers me a lift home from the pub in a car, and I refuse to get in because of the risk that it will crash, the car drives off at 70mph in a 30mph zone, racing through red lights. If through sheer luck and the driving skill of other road users, the drunk driver makes it home safely, it does not make my decision wrong, even in hindsight, because the risk is still high. If the drunk does not suffer any consequences from the risk that have taken then they will simply repeat the high risk event.

The fact that our drunk economy has not yet crashed as hard as Greece, Iceland, Cyprus, Spain etc.. is just pure luck and tolerance of the other road users. The economic problems, debt, trade imbalances, lack of production all remain and are being made worse by the day, this is the important factor, not wether the economy gets inflation, deflation etc.. whether the drunk crashes into a wall, a car, slips off the road, jack knifes, gets hit from the side etc..

1: Completely misread the ability of the UK gvt to avoid house price collapse post GFC phase 1

The UK government has devalued the currency to mitigate the fall in the paper value of house prices to protect the banks, due to the tolerance of the bond market. Debasement of the currency was predicted by the HPC goldbugs, the tolerance of the international bond markets is was not predicted and is temporary.

[2]faied to see the equities run up over the past 12 months (in fact, liquidated my FTSE EFT at +7% from fear the market would collapse.)

Those that predicted that the government would try to reinflate have always stated that newly printed money would find its way into different asset classes. Are stocks really that high or are we just seeing rises due to devaluation of the currency?

[3]failed to see the downwards leg in gold; no financial loss but if I'd had a crystal ball could have bought and then sold at peak to add to the house buy fund

Gold goes up and down because it's traded all the time, It's a highly liquid asset, unlike houses. Many Goldbugs predict big downward legs in gold, most of it comes from the paper gold market. Overall the same problems that caused people to seek safety in gold remain at large or are being exacerbated. If you had a crystal ball you could make much more money in a casino or betting on horses.

[Gigantic Purple Slug]

Guilty of some of the above.

The biggest issues I see on this site are underestimation of the inertia in the economy, ie that it takes a long time for things to happen, even if the events that kick things off actually occur over a short time span it can take years for fundamentals to asset themselves. Others include judging economic systems purely in terms of mathematics (ie "it's mathematically impossible to pay off the debt") whereas in reality the rules of economic systems are made up by people and they can choose to write off that debt at the drop of a hat.

I would say my biggest failing is not being aggressive enough when I see opportunity. That said opportunities are defined with the benefit of hindsight.

[DeepLurker]

Anyone else?

I'll hold my hand up.

I dismissed HPC predictions of Armageddon in the mid-noughties as swivelled-eyed nonsense.

Came to realise my errors in 2008.

Thought the future would play out as the swivelled-eyed loons said - well, they got the first part right (the housing bubble was so big that it would break the banks), so it stood to reason that their predictions for the aftermath were to be taken seriously.

Expected a nasty Depression.

Never expected QE, negative real interest rates, etc...

[goldbug9999]

HPCers tend to get painted in the media as a bunch of swivel eyed loons (to steal someones phrase). However, I think a strong part of being a rounded human is to admit when you are wrong. I'll go first:

1. Completely misread the ability of the UK gvt to avoid house price collapse post GFC phase 1

2. faied to see the equities run up over the past 12 months (in fact, liquidated my FTSE EFT at +7% from fear the market would collapse.)

3. failed to see the downwards leg in gold; no financial loss but if I'd had a crystal ball could have bought and then sold at peak to add to the house buy fund

Looking at all of these it seems I am too cautious to believe the ability of markets and governments to create gains despite generally negative fundamentals. I should learn from this.

Anyone else?

All these events are determined by arbitrary policy decisions which you as someone outside the "inner circle" of the financial/political elite have no way of predicting.

[MattW]

When I took a mortgage out in 2004, I was convinced interest rates would go up. Even before the fixed rate term was up, ir went DOWN to 0.5%!

Wrong on that point. When I sold in August 2010, I was convinced that interest rates would go up within 2 years. Still @ 0.5% nearly 3 years on. :angry:

[scrappycocco]

and we'll all pay for it through increased prices for everything, higher taxes and erosion of our savings.......was it worth it?

A higher cost of living in exchange for hpi, a bargain if you own a london property even better if your a mp.

[juvenal]

I didn't forsee the government would do absolutely anything to maintain HPI.

and I thought Justin Bieber would hang onto his monkey.

[montesquieu]

The drunk driver analogy is spot on - when I had to move south for work in 2004 (having had great difficulty selling up in Scotland at the time) I could see the bubble all around me and HPC chimed exactly with my experience. I refused to get in the car. However I do think that not only has the world moved on, but I know that my personal circumstances certainly have. I'm not so sure, right now, whether the driver is quite as plainly drunk as he was in 2006-7.

I need to buy now to have a house paid off for when I retire, when I don't want to be paying rent. We've built up a substantial deposit which we are shortly about to put towards a house (chain now complete, survey going ahead next week). In March I got what I think is a good deal from a motivated seller (not just under the 2009 price but probably around the 2005 price) after the house had only been on the market a couple of weeks. Yes the sellers are making a tidy profit (about 35%) after living there since 2000 according to land registry figures. But I really don't grudge them that.

Sitting in rented I would not be able to pay rent for the next 15 years and still save enough to buy a house outright on retirement, even if there is a market crash of substantial proportions (a big 'if' given policy lengths taken to date, in any case). Hence the logic of buying now (much like the rationale of St Merryn of Somerset-Webb). If the market crashes tomorrow I won't really care, I'll have made my move, and I'll have it paid off in 15years max, 10 if I overpay as planned.

If truth be told anyway, I've stayed out so long in part because it didn't suit me to by, as much as for any profound belief in the fundamental economics. When I could have purchased with the deposit I had available (pre 2007) the prices were madness. Then afterwards, credit was tightened and I couldn't get in even if I'd wanted to - the fact is I couldn't to buy afford the sorts of place I wanted and thought I should be able to have.

Anyway I have no intention of waiting another 2, 3, 4, 10years just to be 'right'. The timing is now right for me.

I suspect precious few people here are sitting on cash piles, ready to offer and purchase outright purely on economic signals. I would think most are either disenfranchised and angry by the level of the market which is denying them a place they would want to live in for the money (which is the situation I was in for quite a period) or in a reasonable position financially but also not quite ready psychologically to make the jump (as I have been latterly). To the first group - which as I say I have been in in the past - I would say put you anger to use changing your circumstances. Waiting for 'fairness' in the market is probably pointless.

The house I'm buying was found after 2 years of looking and is only the second place we offered on in that period. It's a great place, extended (out and up) 60s bungalow in a lovely location in semi-rural Berkshire with a fantastic 200ft garden (wooded at the back) in a location that can't be built on. The rear of the house is not overlooked and we could go nude if we wanted in the garden. It has ample space for us, our stuff and guests. 10min walk from a railway station with services to Paddington in under an hour, 10min drive from the M3 and 20min from the M4. (Starting to sound like a Treasure Hunt clue here ) Frankly I couldn't have afforded this three years ago in terms of getting the mortgage deal we wanted (10year fix) with the deposit we had available. So the time, for us, is now

Not anticipating any capital gains at all, this is purely a place to live in (or sell to enable relocation) on retirement. Not 'my house is my pension' but 'I don't want to have to spend my pension on a house'.

[Bruce Banner]

I need to buy now to have a house paid off for when I retire, when I don't want to be paying rent.

I've been retired for over five years and still happily renting.

[winkie]

I've been retired for over five years and still happily renting.

I would be happily renting if I knew I had enough stashed away to pay all my costs and expenses, enough to travel and enjoy myself, to keep me in a manner that I have become accustomed to right until the end.....what more could anyone want or ask for?

[Bruce Banner]

I would be happily renting if I knew I had enough stashed away to pay all my costs and expenses, enough to travel and enjoy myself, to keep me in a manner that I have become accustomed to right until the end.....what more could anyone want or ask for?

Well, yes, you need some security to enjoy retirement, but owning a house is not necessary.

[winkie]

Well, yes, you need some security to enjoy retirement, but owning a house is not necessary.

Very true....you could live with someone who does own one....or live in one that someone owns.

[gf3]

Guilty of some of the above.

I would say my biggest failing is not being aggressive enough when I see opportunity. That said opportunities are defined with the benefit of hindsight.

Yes I think this is my main failing too. I see inaction as the default positions instead of weighing up the two choices equally. On the whole risk taking pays.

[gf3]

(10year fix)

This I think is a mistake. You can get a lifetime tracker at 2.28%. Yes there is a risk but if the bank is prepared to take a risk of offering you a 10 year fix then it probably a bad choice for you. Unless you know something the banks don't.

Get a calculator and do the maths

[Georgia O'Keeffe]

No-one would have believed, in the early years of the 21st century that human affairs were being watched from the timeless worlds of space. No one could have dreamed that we were being scrutinized as someone with a microscope studies creatures that swarm and multiply in a drop of water. Few HPCers even considered the possibility of property speculators on other planets. And yet, across the gulf of space, minds immeasurably superior to ours regarded maidstone with envious eyes, and slowly, and surely, they drew their plans against us.''

MUAHAHAAAAAA............MUAHAHAAAAAAA

Edited May 26, 2013 by georgia o'keeffe

[winkie]

No-one would have believed, in the early years of the 21st century that human affairs were being watched from the timeless worlds of space. No one could have dreamed that we were being scrutinized as someone with a microscope studies creatures that swarm and multiply in a drop of water. Few HPCers even considered the possibility of property speculators on other planets. And yet, across the gulf of space, minds immeasurably superior to ours regarded maidstone with envious eyes, and slowly, and surely, they drew their plans against us.''

MUAHAHAAAAAA............MUAHAHAAAAAAA

http://www.youtube.com/watch?v=iSifCF8k27A

[Harry Monk]

This reads dangerously like an Acceptance We Were All Wrong thread.

I fear a statue of Sibley will be unveiled in each town centre at this rate.

And on behalf of one of my favourite posters on here, may I aim this at myself:

Simple fact is, that so far at least, Sibley was right and we were wrong.

I thought at the time, and posted to the effect myself, that it was very wrong that Sibley was virtually banished from the site simply for holding the contrarian view, that there was a bit of a lynch-mob mentality about the whole thing. Subtly of course because I've always held the view on all forums that I visit that "The moderator may not be right, but he is always the moderator".

In the longer term, Sibley may turn out to have been wrong but there is no sign at the moment of the crash we were all expecting in 2007 happening, or of house prices ever reverting to 3.5x earnings. I'm sufficiently confident of this to have now completely depleted my STR fund taking my savings off in a totally different direction. I don't ever anticipate owning a house again.

So yes, all hail the all-knowing Maidstone visionary known as Sibley and let those statues be erected. All Hail the mighty Sibley!