[4plexowner]

I’ve spent lots of money on seminars and books and software and newsletters in the elusive attempt to strike it rich day-trading

In my journey I’ve arrived at these conclusions:
– serious day-traders eventually end up trading the eMinis (because of the leverage) so why not focus on them from the start
– I’m not likely to make money on a trade if I don’t understand why I am in it and what my objective is (ie, I am blindly following the advice of some newsletter or ‘friend of a friend’ instead of thinking for myself)
– serious day-traders have to spend money on a decent trading platform and learn how to use it – I chose Tradestation because of its strategy automation capabilities – this lets the trader play ‘what-if’ games and test a trading idea without putting capital at risk – I believe this ability to test an idea prior to trading it is critical
– nobody is going to sell a ‘sure-fire’ trading system for $3000 – I’m trying to develop the proverbial ‘money-machine’ for trading the Russell eMini and I can assure you that if I succeed I won’t be selling it at any price much less $3000)
– to succeed at day-trading I will have to expend the same level of energy/dedication/drive that it took to get my engineering degree – the difference is $600K/yr as a trader vs $100K as an engineer

My current focus is on Jeffery Katz’s book, The Encyclopedia of Trading Strategies – he presents the idea of allowing an optimizer to pick not only the parameters for the trading rules being used (MACD, moving average, etc) but also to pick the trading rules themselves – Katz implies that a genetic optimizer (which is available for Tradestation) has the power to develop a profitable trading system using this methodolgy – I hope he is right – he also analyzes different entry and exit strategies in a very thorough manner

I’ve made about 5 attempts to trade the eMinis so far – my best trade was a position I took by accident – my worst trade cost me $3000 in 10 minutes (I know I’m right, I know I’m right, I know …, darn, get me out of this trade quick! …)

[4plexowner]

LOL! my favorites are “the bottom is near” and “it’s only a correction”

[4plexowner]

LOL! my favorites are “the bottom is near” and “it’s only a correction”

[4plexowner]

Q: What do you call a realtor going over a cliff in a golf cart?

Ans: A good start

[4plexowner]

Q: What do you call a realtor going over a cliff in a golf cart?

Ans: A good start

[4plexowner]

How were sales going in this project?

They have been on the market for several months – it would be interesting to see how many, if any, of the units have closed escrow

IMO, this project is poorly located and horribly over-priced for the location

Perhaps the investors/builders realized what a horrible decision they made in building this project and decided,

“there’s nothing wrong with this project that a good coat of fire wouldn’t fix”

[4plexowner]

How were sales going in this project?

They have been on the market for several months – it would be interesting to see how many, if any, of the units have closed escrow

IMO, this project is poorly located and horribly over-priced for the location

Perhaps the investors/builders realized what a horrible decision they made in building this project and decided,

“there’s nothing wrong with this project that a good coat of fire wouldn’t fix”

[4plexowner]

I am surprised that anyone refers to these people (or others like them) as ‘investors’

An ‘investment’ provides a return on the money invested

If you are taking money out of your pocket on a monthly basis for the right of owning real estate, you are speculating NOT investing

OK, you want to argue that the capital gains provide the return on investment – let’s go down that road

What you are saying is that you don’t need monthly income because you are going to make so much money on capital gains that the monthly alligator in your shorts is OK

Isn’t counting on capital gains speculation? What happens if the capital gains don’t occur? How long will you let that ‘investment’ drive you towards the poor house?

Assuming that there are any capital gains, how are you going to access them? Sell? Refi/cashout? Transaction costs? Tax consequences?

Anyway, my point is that we are flattering these people by calling them investors.

[4plexowner]

I am surprised that anyone refers to these people (or others like them) as ‘investors’

An ‘investment’ provides a return on the money invested

If you are taking money out of your pocket on a monthly basis for the right of owning real estate, you are speculating NOT investing

OK, you want to argue that the capital gains provide the return on investment – let’s go down that road

What you are saying is that you don’t need monthly income because you are going to make so much money on capital gains that the monthly alligator in your shorts is OK

Isn’t counting on capital gains speculation? What happens if the capital gains don’t occur? How long will you let that ‘investment’ drive you towards the poor house?

Assuming that there are any capital gains, how are you going to access them? Sell? Refi/cashout? Transaction costs? Tax consequences?

Anyway, my point is that we are flattering these people by calling them investors.

[4plexowner]

or, because of the ‘risk risk risk’ surveyor mentions you could end up without a pot to piss in because you tried to play the leverage game at the absolute worst time in history

[4plexowner]

or, because of the ‘risk risk risk’ surveyor mentions you could end up without a pot to piss in because you tried to play the leverage game at the absolute worst time in history

[4plexowner]

“I fully anticipate the pendulum will continue to swing towards conservative lending criteria – probably to an extreme equal in severity to the degree of anarchy that fed this last boom.”

What is the opposite extreme from “fog a mirror and I’ll give you a loan”?

How about “prove to me that you DON’T need a loan and I might consider granting you one”

This is one of the factors that could drive us to a 70% decline vs the 50% decline that more and more people are talking about

[4plexowner]

“I fully anticipate the pendulum will continue to swing towards conservative lending criteria – probably to an extreme equal in severity to the degree of anarchy that fed this last boom.”

What is the opposite extreme from “fog a mirror and I’ll give you a loan”?

How about “prove to me that you DON’T need a loan and I might consider granting you one”

This is one of the factors that could drive us to a 70% decline vs the 50% decline that more and more people are talking about

[4plexowner]

I’m expecting 1998 prices pretty much across the board – all areas of town, all property types

I am hoping for lower prices (the overshoot Bugs mentions) but this may only happen on selected areas or property types

~

I think even real estate bears are hesitant to talk about 70% declines in public – as you have pointed out Bugs, we have friends and family who will be hurt by this housing correction so we might filter what we say out loud

When I was selling property and the buyer asked why, I would say “I’m expecting a correction and I believe it will be more than the typical 10-15%.”

This is an honest answer and it doesn’t put the other person on the defensive

I maintain a list of all the negatives facing the US economy going forward – when I look at this list it is easy for me to imagine 70% declines in real estate prices but along with the reduced prices comes a depression that will make the 1930s look like a summer holiday at the beach

~

It makes sense to me that the market will find a bottom when rental quality houses are selling near rental value

This is when the investors will step in and buy

To me, this means a 3/1 SFR in Clairemont or North Park is worth no more than $275K (and probably only $225K)

I use ‘Clairemont at $275K’ as my starting point to consider prices in other areas

A view property in Bay Park / Bay Ho won’t cost more than twice the lower end house in Clairemont so I think these view properties will be available for $600K

View property in nicer areas (Mission Hills, Pt Loma, OB, Sunset Cliffs) will cost more but they won’t be twice what a view property in Bay Park is going for – this means there will be view properties in these nice areas for under $1 mil

[4plexowner]

I’m expecting 1998 prices pretty much across the board – all areas of town, all property types

I am hoping for lower prices (the overshoot Bugs mentions) but this may only happen on selected areas or property types

~

I think even real estate bears are hesitant to talk about 70% declines in public – as you have pointed out Bugs, we have friends and family who will be hurt by this housing correction so we might filter what we say out loud

When I was selling property and the buyer asked why, I would say “I’m expecting a correction and I believe it will be more than the typical 10-15%.”

This is an honest answer and it doesn’t put the other person on the defensive

I maintain a list of all the negatives facing the US economy going forward – when I look at this list it is easy for me to imagine 70% declines in real estate prices but along with the reduced prices comes a depression that will make the 1930s look like a summer holiday at the beach

~

It makes sense to me that the market will find a bottom when rental quality houses are selling near rental value

This is when the investors will step in and buy

To me, this means a 3/1 SFR in Clairemont or North Park is worth no more than $275K (and probably only $225K)

I use ‘Clairemont at $275K’ as my starting point to consider prices in other areas

A view property in Bay Park / Bay Ho won’t cost more than twice the lower end house in Clairemont so I think these view properties will be available for $600K

View property in nicer areas (Mission Hills, Pt Loma, OB, Sunset Cliffs) will cost more but they won’t be twice what a view property in Bay Park is going for – this means there will be view properties in these nice areas for under $1 mil

[Author]

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