[cooperthedog]

From an investment perspective, speculative bubbles (and the resulting declines) are excellent trading opportunities.

Since real-estate is relatively illiquid and has high carrying costs, timing that market can be hazardous. Of course, with the advantage of hindsight the entry & exit points seem “obvious” now, but to enter the housing market at that time (2002-03) without such knowledge carried a substantial amount of risk.

If you already owned a house at that time, then selling when prices were “overvalued” on a fundamental level reduces your potential profits. No one knows when the bubble will pop, or how high it will go, but history shows that the mania around the peak is extreme. Generally, its best to ride the price wave to the top, and then sell when it starts to break down. This way you don’t miss out on all those irrational profits, even though you don’t catch the exact top. Of course with RE the exit isn’t a mouse click away, but it also doesn’t crash overnight, so during the bubble one would develop a plan to sell when things start to breakdown (e.g. house is prepped for market, relation with realtor already established, willing to accept pricing sligtly under market to move quickly, etc.). Thus, I think someone who sold too early might have a little regret (though they still made out very well), I don’t think it is reasonable for a renter at the time to feel bitter about “missing out” since the risk/reward ratio was also high at the time, with the threat of prices breaking down at anytime. Also, contrast the potential lost opportunity of prudent renters (with zero cost), with the very real loss of those that bought at the peak.

On the flip side, those who knew about the bubble and waited patiently whilst developing trading strategies for the inevitable crash, thus getting in at the optimal time for shorting the new losers of the mania (mortgage lenders, builders, etc.), made out like bandits with little risk.

The good news is that many readers who didn’t participate either way are much more aware of these opportunities in the future, and can plan accordingly and profit greatly. Such a lesson itself might be more rewarding to the prudent renter then picking up a deal on a house when the market bottoms.

[cooperthedog]

From an investment perspective, speculative bubbles (and the resulting declines) are excellent trading opportunities.

Since real-estate is relatively illiquid and has high carrying costs, timing that market can be hazardous. Of course, with the advantage of hindsight the entry & exit points seem “obvious” now, but to enter the housing market at that time (2002-03) without such knowledge carried a substantial amount of risk.

If you already owned a house at that time, then selling when prices were “overvalued” on a fundamental level reduces your potential profits. No one knows when the bubble will pop, or how high it will go, but history shows that the mania around the peak is extreme. Generally, its best to ride the price wave to the top, and then sell when it starts to break down. This way you don’t miss out on all those irrational profits, even though you don’t catch the exact top. Of course with RE the exit isn’t a mouse click away, but it also doesn’t crash overnight, so during the bubble one would develop a plan to sell when things start to breakdown (e.g. house is prepped for market, relation with realtor already established, willing to accept pricing sligtly under market to move quickly, etc.). Thus, I think someone who sold too early might have a little regret (though they still made out very well), I don’t think it is reasonable for a renter at the time to feel bitter about “missing out” since the risk/reward ratio was also high at the time, with the threat of prices breaking down at anytime. Also, contrast the potential lost opportunity of prudent renters (with zero cost), with the very real loss of those that bought at the peak.

On the flip side, those who knew about the bubble and waited patiently whilst developing trading strategies for the inevitable crash, thus getting in at the optimal time for shorting the new losers of the mania (mortgage lenders, builders, etc.), made out like bandits with little risk.

The good news is that many readers who didn’t participate either way are much more aware of these opportunities in the future, and can plan accordingly and profit greatly. Such a lesson itself might be more rewarding to the prudent renter then picking up a deal on a house when the market bottoms.

[cooperthedog]

From an investment perspective, speculative bubbles (and the resulting declines) are excellent trading opportunities.

Since real-estate is relatively illiquid and has high carrying costs, timing that market can be hazardous. Of course, with the advantage of hindsight the entry & exit points seem “obvious” now, but to enter the housing market at that time (2002-03) without such knowledge carried a substantial amount of risk.

If you already owned a house at that time, then selling when prices were “overvalued” on a fundamental level reduces your potential profits. No one knows when the bubble will pop, or how high it will go, but history shows that the mania around the peak is extreme. Generally, its best to ride the price wave to the top, and then sell when it starts to break down. This way you don’t miss out on all those irrational profits, even though you don’t catch the exact top. Of course with RE the exit isn’t a mouse click away, but it also doesn’t crash overnight, so during the bubble one would develop a plan to sell when things start to breakdown (e.g. house is prepped for market, relation with realtor already established, willing to accept pricing sligtly under market to move quickly, etc.). Thus, I think someone who sold too early might have a little regret (though they still made out very well), I don’t think it is reasonable for a renter at the time to feel bitter about “missing out” since the risk/reward ratio was also high at the time, with the threat of prices breaking down at anytime. Also, contrast the potential lost opportunity of prudent renters (with zero cost), with the very real loss of those that bought at the peak.

On the flip side, those who knew about the bubble and waited patiently whilst developing trading strategies for the inevitable crash, thus getting in at the optimal time for shorting the new losers of the mania (mortgage lenders, builders, etc.), made out like bandits with little risk.

The good news is that many readers who didn’t participate either way are much more aware of these opportunities in the future, and can plan accordingly and profit greatly. Such a lesson itself might be more rewarding to the prudent renter then picking up a deal on a house when the market bottoms.

[cooperthedog]

From an investment perspective, speculative bubbles (and the resulting declines) are excellent trading opportunities.

Since real-estate is relatively illiquid and has high carrying costs, timing that market can be hazardous. Of course, with the advantage of hindsight the entry & exit points seem “obvious” now, but to enter the housing market at that time (2002-03) without such knowledge carried a substantial amount of risk.

If you already owned a house at that time, then selling when prices were “overvalued” on a fundamental level reduces your potential profits. No one knows when the bubble will pop, or how high it will go, but history shows that the mania around the peak is extreme. Generally, its best to ride the price wave to the top, and then sell when it starts to break down. This way you don’t miss out on all those irrational profits, even though you don’t catch the exact top. Of course with RE the exit isn’t a mouse click away, but it also doesn’t crash overnight, so during the bubble one would develop a plan to sell when things start to breakdown (e.g. house is prepped for market, relation with realtor already established, willing to accept pricing sligtly under market to move quickly, etc.). Thus, I think someone who sold too early might have a little regret (though they still made out very well), I don’t think it is reasonable for a renter at the time to feel bitter about “missing out” since the risk/reward ratio was also high at the time, with the threat of prices breaking down at anytime. Also, contrast the potential lost opportunity of prudent renters (with zero cost), with the very real loss of those that bought at the peak.

On the flip side, those who knew about the bubble and waited patiently whilst developing trading strategies for the inevitable crash, thus getting in at the optimal time for shorting the new losers of the mania (mortgage lenders, builders, etc.), made out like bandits with little risk.

The good news is that many readers who didn’t participate either way are much more aware of these opportunities in the future, and can plan accordingly and profit greatly. Such a lesson itself might be more rewarding to the prudent renter then picking up a deal on a house when the market bottoms.

[cooperthedog]

From an investment perspective, speculative bubbles (and the resulting declines) are excellent trading opportunities.

Since real-estate is relatively illiquid and has high carrying costs, timing that market can be hazardous. Of course, with the advantage of hindsight the entry & exit points seem “obvious” now, but to enter the housing market at that time (2002-03) without such knowledge carried a substantial amount of risk.

If you already owned a house at that time, then selling when prices were “overvalued” on a fundamental level reduces your potential profits. No one knows when the bubble will pop, or how high it will go, but history shows that the mania around the peak is extreme. Generally, its best to ride the price wave to the top, and then sell when it starts to break down. This way you don’t miss out on all those irrational profits, even though you don’t catch the exact top. Of course with RE the exit isn’t a mouse click away, but it also doesn’t crash overnight, so during the bubble one would develop a plan to sell when things start to breakdown (e.g. house is prepped for market, relation with realtor already established, willing to accept pricing sligtly under market to move quickly, etc.). Thus, I think someone who sold too early might have a little regret (though they still made out very well), I don’t think it is reasonable for a renter at the time to feel bitter about “missing out” since the risk/reward ratio was also high at the time, with the threat of prices breaking down at anytime. Also, contrast the potential lost opportunity of prudent renters (with zero cost), with the very real loss of those that bought at the peak.

On the flip side, those who knew about the bubble and waited patiently whilst developing trading strategies for the inevitable crash, thus getting in at the optimal time for shorting the new losers of the mania (mortgage lenders, builders, etc.), made out like bandits with little risk.

The good news is that many readers who didn’t participate either way are much more aware of these opportunities in the future, and can plan accordingly and profit greatly. Such a lesson itself might be more rewarding to the prudent renter then picking up a deal on a house when the market bottoms.

[cooperthedog]

Is it a good time to get out of the market? What an excellent question! It really depends on your timeframe.

This market is showing lots of mixed signals. The volatility in prices that generally accompany market tops is present, but the euphoria is not. In fact, there has been so much negativity in the general press (corporate profits down, recession a possibility, credit crunch, weak dollar, etc. etc.), yet the markets are flirting with all time highs, exclude the financials, and we would be above record highs. Maybe the gov’t bailout, rate cut, and expected year-end rally will be enough to offset all the gloom & doom, then we can have a serious sell-off…

Of course, the market will do whatever it pleases. I think the rally off off ~12800 (DJIA) tells the bears that we have some more time. If the market breaks below that, it could get ugly. Assuming a 1/2 pt rate cut, the markets could rally to their previous highs, or even beyond, though I’m betting that prices bounce between 14300 & 12800 for the next few months, until the other shoe drops in the credit markets, recession sets in, etc. Of course, the markets could blow past 14000 and never look back…

If I was a LT investor (hold for years), I would wait until the market really starts to break down, if it indeed does, otherwise your trying to catch the top, which goes against the definition of a LT investor… If intermediate, sell/short at the top of the range and buy/cover at the bottom, reversing quickly should any break occur & re-evaluate from there. The above pertains to US index funds/ETFs, not individual stocks. Also, these are my opinions, not advice.

Let’s hear some other opinions and ideas. Does anyone think that oil has had its run, at least in the next 6 months? Consumer spending over the holidays abyssmal or strong? Has China had its run for now?

[cooperthedog]

Is it a good time to get out of the market? What an excellent question! It really depends on your timeframe.

This market is showing lots of mixed signals. The volatility in prices that generally accompany market tops is present, but the euphoria is not. In fact, there has been so much negativity in the general press (corporate profits down, recession a possibility, credit crunch, weak dollar, etc. etc.), yet the markets are flirting with all time highs, exclude the financials, and we would be above record highs. Maybe the gov’t bailout, rate cut, and expected year-end rally will be enough to offset all the gloom & doom, then we can have a serious sell-off…

Of course, the market will do whatever it pleases. I think the rally off off ~12800 (DJIA) tells the bears that we have some more time. If the market breaks below that, it could get ugly. Assuming a 1/2 pt rate cut, the markets could rally to their previous highs, or even beyond, though I’m betting that prices bounce between 14300 & 12800 for the next few months, until the other shoe drops in the credit markets, recession sets in, etc. Of course, the markets could blow past 14000 and never look back…

If I was a LT investor (hold for years), I would wait until the market really starts to break down, if it indeed does, otherwise your trying to catch the top, which goes against the definition of a LT investor… If intermediate, sell/short at the top of the range and buy/cover at the bottom, reversing quickly should any break occur & re-evaluate from there. The above pertains to US index funds/ETFs, not individual stocks. Also, these are my opinions, not advice.

Let’s hear some other opinions and ideas. Does anyone think that oil has had its run, at least in the next 6 months? Consumer spending over the holidays abyssmal or strong? Has China had its run for now?

[cooperthedog]

Is it a good time to get out of the market? What an excellent question! It really depends on your timeframe.

This market is showing lots of mixed signals. The volatility in prices that generally accompany market tops is present, but the euphoria is not. In fact, there has been so much negativity in the general press (corporate profits down, recession a possibility, credit crunch, weak dollar, etc. etc.), yet the markets are flirting with all time highs, exclude the financials, and we would be above record highs. Maybe the gov’t bailout, rate cut, and expected year-end rally will be enough to offset all the gloom & doom, then we can have a serious sell-off…

Of course, the market will do whatever it pleases. I think the rally off off ~12800 (DJIA) tells the bears that we have some more time. If the market breaks below that, it could get ugly. Assuming a 1/2 pt rate cut, the markets could rally to their previous highs, or even beyond, though I’m betting that prices bounce between 14300 & 12800 for the next few months, until the other shoe drops in the credit markets, recession sets in, etc. Of course, the markets could blow past 14000 and never look back…

If I was a LT investor (hold for years), I would wait until the market really starts to break down, if it indeed does, otherwise your trying to catch the top, which goes against the definition of a LT investor… If intermediate, sell/short at the top of the range and buy/cover at the bottom, reversing quickly should any break occur & re-evaluate from there. The above pertains to US index funds/ETFs, not individual stocks. Also, these are my opinions, not advice.

Let’s hear some other opinions and ideas. Does anyone think that oil has had its run, at least in the next 6 months? Consumer spending over the holidays abyssmal or strong? Has China had its run for now?

[cooperthedog]

Is it a good time to get out of the market? What an excellent question! It really depends on your timeframe.

This market is showing lots of mixed signals. The volatility in prices that generally accompany market tops is present, but the euphoria is not. In fact, there has been so much negativity in the general press (corporate profits down, recession a possibility, credit crunch, weak dollar, etc. etc.), yet the markets are flirting with all time highs, exclude the financials, and we would be above record highs. Maybe the gov’t bailout, rate cut, and expected year-end rally will be enough to offset all the gloom & doom, then we can have a serious sell-off…

Of course, the market will do whatever it pleases. I think the rally off off ~12800 (DJIA) tells the bears that we have some more time. If the market breaks below that, it could get ugly. Assuming a 1/2 pt rate cut, the markets could rally to their previous highs, or even beyond, though I’m betting that prices bounce between 14300 & 12800 for the next few months, until the other shoe drops in the credit markets, recession sets in, etc. Of course, the markets could blow past 14000 and never look back…

If I was a LT investor (hold for years), I would wait until the market really starts to break down, if it indeed does, otherwise your trying to catch the top, which goes against the definition of a LT investor… If intermediate, sell/short at the top of the range and buy/cover at the bottom, reversing quickly should any break occur & re-evaluate from there. The above pertains to US index funds/ETFs, not individual stocks. Also, these are my opinions, not advice.

Let’s hear some other opinions and ideas. Does anyone think that oil has had its run, at least in the next 6 months? Consumer spending over the holidays abyssmal or strong? Has China had its run for now?

[cooperthedog]

Is it a good time to get out of the market? What an excellent question! It really depends on your timeframe.

This market is showing lots of mixed signals. The volatility in prices that generally accompany market tops is present, but the euphoria is not. In fact, there has been so much negativity in the general press (corporate profits down, recession a possibility, credit crunch, weak dollar, etc. etc.), yet the markets are flirting with all time highs, exclude the financials, and we would be above record highs. Maybe the gov’t bailout, rate cut, and expected year-end rally will be enough to offset all the gloom & doom, then we can have a serious sell-off…

Of course, the market will do whatever it pleases. I think the rally off off ~12800 (DJIA) tells the bears that we have some more time. If the market breaks below that, it could get ugly. Assuming a 1/2 pt rate cut, the markets could rally to their previous highs, or even beyond, though I’m betting that prices bounce between 14300 & 12800 for the next few months, until the other shoe drops in the credit markets, recession sets in, etc. Of course, the markets could blow past 14000 and never look back…

If I was a LT investor (hold for years), I would wait until the market really starts to break down, if it indeed does, otherwise your trying to catch the top, which goes against the definition of a LT investor… If intermediate, sell/short at the top of the range and buy/cover at the bottom, reversing quickly should any break occur & re-evaluate from there. The above pertains to US index funds/ETFs, not individual stocks. Also, these are my opinions, not advice.

Let’s hear some other opinions and ideas. Does anyone think that oil has had its run, at least in the next 6 months? Consumer spending over the holidays abyssmal or strong? Has China had its run for now?

[cooperthedog]

One reason to use a MM is accessibility & no penalties for early withdraw. I assuming most people use a MM in a brokerage account inbetween investments/trades, including IRA’s, and do not want their money tied up.

With that said, the yield on those CD’s are great, especially considering the looming rate cut.

It also shows the desperation for funds that CFC is offering such a high rate, of course its better than paying 11% and it doesn’t convert into equity… 🙂

[cooperthedog]

One reason to use a MM is accessibility & no penalties for early withdraw. I assuming most people use a MM in a brokerage account inbetween investments/trades, including IRA’s, and do not want their money tied up.

With that said, the yield on those CD’s are great, especially considering the looming rate cut.

It also shows the desperation for funds that CFC is offering such a high rate, of course its better than paying 11% and it doesn’t convert into equity… 🙂

[cooperthedog]

One reason to use a MM is accessibility & no penalties for early withdraw. I assuming most people use a MM in a brokerage account inbetween investments/trades, including IRA’s, and do not want their money tied up.

With that said, the yield on those CD’s are great, especially considering the looming rate cut.

It also shows the desperation for funds that CFC is offering such a high rate, of course its better than paying 11% and it doesn’t convert into equity… 🙂

[cooperthedog]

One reason to use a MM is accessibility & no penalties for early withdraw. I assuming most people use a MM in a brokerage account inbetween investments/trades, including IRA’s, and do not want their money tied up.

With that said, the yield on those CD’s are great, especially considering the looming rate cut.

It also shows the desperation for funds that CFC is offering such a high rate, of course its better than paying 11% and it doesn’t convert into equity… 🙂

[cooperthedog]

One reason to use a MM is accessibility & no penalties for early withdraw. I assuming most people use a MM in a brokerage account inbetween investments/trades, including IRA’s, and do not want their money tied up.

With that said, the yield on those CD’s are great, especially considering the looming rate cut.

It also shows the desperation for funds that CFC is offering such a high rate, of course its better than paying 11% and it doesn’t convert into equity… 🙂

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