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@beakychew wrote:

It you look at it from a purely money-making point of view, times of recession and other changes are when big fortunes have been  made or started. Businesses and homes are usually undervalued and few people have enough currency to buy them. So for those who are prepared, and can recognise it, a recession can be an opportunity.

 

And it won't last forever. We tend to have long slow booms, and shorter more drastic busts.

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I,ll let you in on a little secret, so long as you promise not to tell anyone else. ( you might find it handy when the next stock market collapse happens )

We traded shares full time for the most volitile six months of the crash. We had two systems we used. One was conventional charting techniques to buy and sell stable companies that where regularly oscillating  YAWN BORING YAWN.

The gold miners where good for this as they had the added safety of a gold hedge against inflation and economic uncertianty.

The other game we played was much more profitable, reliable and a little more unconventional.

At the time of the crash, cash was king and money was simply unobtainable for individuals or companies. We had just sold a number of rental houses before the crash and where reasonably cashed up. We purchased $1000 parcels of shares in around 30 companies that looked stable but needed capital. ( mainly blue chips ) This included companies such as the big four banks, Qantas, Lend Lease, AMP, Westfarmers etc. etc.

We waited until they had a capital raising at heavily discounted prices and then purchased the maximum $15,000 lot of shares that we where legally able to buy. These where often purchased at a 30% - 40% discount to the last trade. In most cases the stock price would decline on the capital raising, but rarely to the full extent of discount. As soon as the shares where alloted we dumped them onto the market, usually making $1500 - $3000 per trade, but made over $7000 on the best trade.

We only got caught once and that was with Elders shares. We held them for four weeks and still managed to get out with a $600 profit. We made 17 capital raising trades all up and made a profit on each one.

Whilst not for the faint hearted, this system proved to be almost fool proof and worth thinking about if we ever experience another crash. Like everything though, big rewards require big risks and you could easily lose the lot.

Like I said though, ITS OUR LITTLE SECRET, dont tell anyone else