[quote=kev374][quote=flu]
it’s just interesting to observe one transform from being an uber bear in the housing and stock market for so many years (close to a decade) suddenly is a stock market permabull, at precisely the moment when the stock market was at an all time high, when a sizeable speculation was made.[/quote]
??? the market is what it is… I still don’t believe in housing, I think housing is in a bubble. There is a huge difference between investing in stocks and buying a home. Buying a home is done with debt which I may not be able to repay if there is a huge recession. If stocks tank I will still be ok and will be able to ride it out.
Given the cost of homes and the burn rate required even for a shack these days unless you are a wealthy SOB you will lose everything in a major recession – this is fine with most people but not with me. Most people are idiots who did exactly that and lost it all in 2008 but they will never learn and make big bets that they cannot sustain and then think they are doing great… wait till all of them lose their homes.[/quote]
But that’s the rub… You aren’t “investing” in the stock market, at least based on your January actions.You are speculating. You speculated, by putting a large portion of your total investment capital into one basket (the stock market), all at one time, with the hope of a big score.
There’s nothing wrong with speculation, just like folks who go to vegas and want to bet a large portion on one hand of blackjack…
I just don’t follow that you think the stock market is a “safer” way of speculating then say real estate, especially when it would be also providing you shelter that you pay every month to someone else.
You keep railing against those folks that portion of the population who bought homes who lost homes as “idiots”, which is only part of the population that overleveraged with a loan they normally won’t qualify for. But at the same time, you’re glossing of all of those equivalent folks that speculated poorly in the stock market back in 2001 by moving a huge portion of their assets into the market (after sitting out of it for a long time) right before that market tanked too, something that could be similar to the situation you find yourself in a few months or a few years from now. Especially since you committed to a significant portion of your capital all on one hand, which puts your capital at a much larger risk to your (correct) market timing, and limit your ability to take advantage of any future correction and purchase/re-entry at a lower price, should such a correction occur.
In a recession, your stock picks (unless you shorted the markets, which clearly ou didn’t) gets hammered. So, if you’re really planning for the gloom and doom, the worst case scenario would be, you lose your job just like during the time when the tech bubble burst, and you need to sell your stock at a loss to pay for rent that you still need to pay for.
Also, assuming you didn’t put all your money into a downpayment for a house (I believe you said you had a working capital of $250k), I would assume you would have left yourself a cushion to pay mortgage+interest+tax etc for 3-4 years, in case you did lose your job…
So I’m not sure I get how the stock market is “safer” in your case.
