Will Stock sell-down follows by Property sell-down?

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Dec 23 2008
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There were twice when real estate agents heavily advertise their services to me, if my old memory serves me well. The first time was when I moved in to my new condominium and literally my cell-phone was bombarded with SMS and calls urging me to sell my condo or least rent it out (yes, they provide such service as well). I was amused not because these SMS proved that I had bought the right property at this right place but because how various real estate groups were competing to outdo each other. Due to the attractive commissions, I guess nobody can blame these fast and furious agents.

The second time happened about 2-weeks ago when my letter box was filled with the same advertisements. Although there were agents seeking sellers every now and then it was not so frequent. They even went the extra miles to drop their business cards on my doorsteps (not sure how they managed to do so with the security features in place). The economy must be pretty bad that they thought residents in my area are equally desperate to dispose of their properties. It also means that there are still groups of rich people who are starting to accumulate properties – at cheap price. In reality you still can make good money if you’re able to patiently comb and nail the unfortunate and desperados to dispose of his / her properties at fire-sale price regardless of property locations – Mont Kiara or Kepong.

We’ve yet to see sell-down in property sector and let’s hope it won’t happen because if it does then the chances of a prolong recession is inevitable. In fact we’re lucky that people are still spending (but for how long?) as if nothing is happening when the rest of the world is facing recession *grin*. So far only an estimated 5,000 workers will be affected by retrenchment in the next three months, mostly from the manufacturing industry *applause*. The Japanese economy is worsening with record trade deficit of 223 billion yen ($2.5 billion) in Nov 2008 and a whopping 99.3 per cent of leaders at Japan’s 137 major corporations believe the domestic economy is deteriorating.

It was also the first time Japan has incurred a trade deficit for two straight months since October-November 1980, when the nation was reeling from an oil crisis. November shipments of automobiles plunged 31.9 percent and electronic components plunged 29 percent. U.S. and European Union bound exports tumbled 33.8 and 30.8 percent respectively. If you think Malaysia is not affected, think again because Japan’s export to Asia fell 26.7 percent. While the Japan is struggling to stay above water let’s hope that $700 billion taxpayer bailout money will not go into dustbin. The disturbing fact is there’s no transparency and nobody knows as to where the estimated $350 billion disbursed has gone.

So, will we hear the good news – fire-sale in property sector? Unless you’ve too much money to spend sometimes it’s hard to decide where you want to park your investment, stocks or property? However at this stage we need to experience panic sell-down before the effect can drag the property sector. And we’ve yet to see that so there’re ample of time to accumulate the bullets for an assault – provided the situation will indeed turns for the worst. Of course there’re analysts or advisers who wrote that we should start buying now lest we wish to bang our head against the wall for missing the boat. But they forgot (or rather refuse) to tell the readers if the current crisis will see a recovery in V, U or L shape. What do you think?

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