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BillyShears

Buy Low, Sell High

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The most quoted rule of investing is "buy low, sell high". This requires an investor to spot both low points and high points in the market.

If much of the current property boom is driven by BTL investment, then isn't the beliefs of BTL investors about whether the market has reached or passed its peak the single most important factor controlling whether there will be a crash? If so then "affordability" and "stability" in the market aren't enough, it needs to keep on going up.

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Billy Shears

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Guest muttley

The most quoted rule of investing is "buy low, sell high". This requires an investor to spot both low points and high points in the market.

If much of the current property boom is driven by BTL investment, then isn't the beliefs of BTL investors about whether the market has reached or passed its peak the single most important factor controlling whether there will be a crash? If so then "affordability" and "stability" in the market aren't enough, it needs to keep on going up.

Comments?

Billy Shears

Firstly,.I would dispute your statement that the property boom has been driven by BTL investment.Secondly,the possibility of them being even more stupid than we imagined is not going to save them.

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we ve had so many years of boom - some people do certainly believe that property prices are a one way bet in the "long term".

But a few years of "stability" could change that. And any continued falls could start panic selling. That is what usually happens in the boom and bust cycles of a market is it not?

Billy Shears

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The most quoted rule of investing is "buy low, sell high". This requires an investor to spot both low points and high points in the market.

How about 'the trend is your friend' ?

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How about 'the trend is your friend' ?

Using a well known search engine:

Results 1 - 10 of about 139,000 for "buy low sell high". (0.33 seconds)

Results 1 - 10 of about 40,800 for "the trend is your friend". (0.32 seconds)

Billy Shears

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But a few years of "stability" could change that. And any continued falls could start panic selling. That is what usually happens in the boom and bust cycles of a market is it not?

Billy Shears

Stability I dont think will start people panicking - property will be a good way of storing weatlh then. What we need is not a "pull", but a "push" to force these investors to sell, and that is a recession on the biggest scale. This is what i firmly believe is what is required. Sorry to say it. <_<

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But a few years of "stability" could change that. And any continued falls could start panic selling. That is what usually happens in the boom and bust cycles of a market is it not?

Billy Shears

In theory that sounds right. But are these people using the usual rules for investment or not? My worry is that there is this irrational belief out there amongst BTLs that "I'm not in it for the yield, - it's my pension" which might mean that (unless the short term is really hurting them) they just hang on in there in spite of everything. If so, the balance of owners to landlords might be in the process of changing for good. That might ont come to pass, but it's what I think at my most pessimistic.

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In theory that sounds right. But are these people using the usual rules for investment or not? My worry is that there is this irrational belief out there amongst BTLs that "I'm not in it for the yield, - it's my pension" which might mean that (unless the short term is really hurting them) they just hang on in there in spite of everything. If so, the balance of owners to landlords might be in the process of changing for good. That might ont come to pass, but it's what I think at my most pessimistic.

Just my sentiments - but unable to say it previously

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Firstly,.I would dispute your statement that the property boom has been driven by BTL investment.

I should have emphasised the "IF" before the boom being driven by BTL investment. The sentence was meant to introduce this as hypothetical reasoning, rather than a statement that BTL is the main driver behind the boom. In reality I believe that the classic interplay between "greed" and "stupidity" is the main cause of the boom, but it expresses itself in many ways.

Secondly,the possibility of them being even more stupid than we imagined is not going to save them.

I'm not sure I quite understand this. Could you elaborate?

Billy Shears

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Seems to me most BTL investors & the general populace are going with 'the trend is your friend' for the time being :(

House price never go down !

If picking the tops & bottoms of markets was easy, we all be squillionaires.

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buy low sell high is the worst thing you could try and do.

"If I buy stocks for a rise I like to pay top prices, If I sell em for a fall I'll sell em low or not at all." - Jesse Livermore

"You should be greedy when others are fearful. and fearfull when others are greedy." Warren Buffet

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Guest muttley

I'm not sure I quite understand this. Could you elaborate?

Billy Shears

Your original post implied that the market could be sustained if enough BTL investors continued to ignore the fundamentals.

I personally believe that BTL is a side effect of HPI.They have not driven the increases,and they will not cause a crash.

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  • 336 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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