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powayseller
17 years ago

The author makes several
The author makes several false assertions:
1. “And now over the past four years the media has warned of a housing bubble, …”
What media has warned of a housing bubble? Soft landing articles started in December, bubble talk started early February. The past 4 years, the media has propelled the RE bulls.
2. He portrays Kennedy as a logical investor who used facts and statistics, but then uses the shoeshine boy story, which is totally not based on any logic. Was he a logical, or an emotional or intuitive investor?
3. He defines a contrarian as someone who buys when the market is most pessimistic. Ok, who is pessimistic about RE, other than those of us who are on this web site? Books, seminar, late night informercials are touting the benefits or RE. The market is optimistic, and the doubters are only slowly growing in number.
4. “Housing starts coming out with a bang this week…” A spokesman for the builders association said the strong numbers were due to warm weather, and the builders getting started in January with the spring time orders, and we should expect lower numbers for the spring months. There was no bang at all.
5. “Demand for housing is still strong…” Actually, inventory has doubled, and sales are half of what they were last year. Demand is way down. Prices are still up, but demand is down.

Who published these lies anyway? This guy is just a liar, and an example of how salespeople twist the truth to sell their product. What’s the guy selling?

Bugs
17 years ago
Reply to  powayseller

The reason for the big jump
The reason for the big jump in starts in January is that the developers are holding a lot of projects (in the form of entitled land) right now and they need to try and finish their projects and get out before it’s too late. If the inventory is going up and the volume of sales is going down it doesn’t take much to deduce that the developers don’t have the luxury of time on their side right now.

4plexowner
17 years ago
Reply to  Bugs

Here’s a link to an
Here’s a link to an interview with Mr. Templeton. In it he states that US real estate prices could drop by 50%. The article is worth reading.

http://www.newsmaxstore.com/newsletters/fir/reports/FIR_16_Templeton.htm

Mr. Templeton also states that he has NEVER held a mortgage on a house.

privatebanker
17 years ago

Please share who the
Please share who the financial genius that wrote this article was. This was the epitome of everything that has disgusted me with the real estate sales crowd. I think this person read two good books one day, went out that night and got drunk and returned home to create the most contradicting article in the history of the world. They clearly have absolutely no concept of value investing. And the anecdote regarding the shoeshine boy, that plays true to how real estate squawkers are right now. Simply amazing.

http://www.theprivatebanker.blogspot.com/

barnaby33
17 years ago

I have seen this article as
I have seen this article as well, are we sure that it is actually serious? I have a hard time believing this simply because it is so poorly written. There isn’t a single thing in this rag that doesn’t contradict itself. Maybe its a joke? Hey I suppose it could be; the article we all agree the author is.

Josh

NotARocketScientist
17 years ago

Five or six years from now
Five or six years from now when real estate trauma has set in and top-of-the-market investors are chewing off their own legs to get out of the overpriced investment traps they have sprung — in other words, when it really *will* be a good contrarian time to invest in RE — this guy will be off trying to sell people the next played-out thing.

smfj
17 years ago

The funny thing is that I
The funny thing is that I have used that same Joe Kennedy quote about the shoeshine boy more than once to describe the current real estate market: “When even the shoeshine boy has turned into a “flipper…”.

And one more thing – how many of these “investors” who have seen “sizeable gains with their real estate investments” have seen a *realized gain* – not just on-paper appreciation, or worse yet, “cashed out” on the “equity” that accumulated during the run-up. I mean, Enron investors had a sizeable gain on their investment for a while as well – they just never became realized gains as investors held onto their stock betting on even greater appreciation and, once the stock dipped, a comeback. In fact, Ken Lay took multiple loans out using his stock as collaterol, sending him spiraling into greater and greater debt that he was unable to pay after the collapse – sound familiar?

Anonymous
Anonymous
17 years ago

This still seems too
This still seems too hilarious to be true. Are you sure this isn’t part of the same satire/hoax barrage o late, like

http://thereisnohousingbubble.blogspot.com/

and

http://www.fantasylandmortgage.com/

Although I’ll have to admit, the “contrarian letter” is the best of the satire/hoaxes so far.

EDIT: I stand corrected. It is actually being published as parts of lending newsletters. Here’s one:

http://www.middletennesseehomeloans.com/ on the front page (for now)