Next downturn "severe"

Former remisier king in an interview with the Business Times said:

"Today's bull run can get cut short by a number of things. Just like our recent experience with Sars, ... the least expected thing can happen at the wrong time. I got a feeling the next downturn will be very severe."

But don't sell everything yet. Peter Lim also said that the stock market still has 2 good years to go.

His advice:

"(One) has got to start to think how to exit at the end of 2-3 years - 2009, before the casino starts operating."

On property prices, he said that the current demand is driving the redevelopment projects - buildings are knocked down to build more apartments - hence explaining the temporary supply shortage. But when these projects are completed, there will be 3 times more apartments.

"When the supply comes out, property prices will drop."

I think I said something to similar effect too at Property now "underweight" but of course I'm no remisier king.

But I think the true gem of advice from Mr Peter Lim is this:

"A lot of people get it wrong. When the bull market is here, they build debts. Bull market is the time to build cash. Because today's market turns very quickly. When the market turns, you cannot sell, especially for the property market. You can only sell when things are going up."

There you go...

http://www.salary.sg/2007/next-downturn-severe/

I read the article too and the last words resonated with me.

My friends and I are planning to save up now and build up our war chest and buy properties in 5 years time when the property cycle is low.