Street Talk. I actually spent most of my time in HC tracking my vast portfolio of share investment. When the market gets frothy again, I will rotate my multi-baggers into beaten, pummelled and scorched properties lying in waste.
Remember my posting last year turning one house into multiples.
Again use this simple example to illustrate:
Assume someone bought a modest $500K in FMG at $2. South Cross equities says it will hit $20 in 2014. I think $15 is easy peasy given it is a low cost / long life operation. When the last time the market got frothy, FMG was $13 when it made it's maiden shipment (the company then was a minnow in terms of production).
Selling even at $15 (before 50% discounted GCT) results in $3.7M. NET after GCT is around $3M.
A home purchased in January at $500K (for argument sake like the rubbish in Clayton where the clearance rate is around 10%) will have fallen to about $250K.
With the $3M that you have invested in FMG, you can now buy 12 properties.
The sucker who bought with his $500K at the peak is now worse off by a factor of: 12.
