[Coronita]

.

[Coronita]

[quote=carlsbadworker]
Chinese’s government’s biggest fear is its own citizens not foreign countries. It spends more money on “social stability” than on military each year.[/quote]

Bingo.

[Coronita]

[quote=kev374][quote=flu]
I call bullshit on that one. [/quote]

what exactly is bullshit about it? I bought at 251 sold when it reached 260… not rocket science. I did not sell my international holdings or my bonds which are both negative but they will eventually rebound.

My buddy bought $100,000 worth of AMZN 2 years ago at 620, he clocked in a profit of $150,000 in just 2 years for doing virtually nothing… he sold a few shares and bought a new car, GIFTED by Amazon thanks!

Making money in an upmarket, especially the last 2 years with zero volatility was stupidly easy.

The biggest mistake was trying to attempt in buying homes which is a losers game. Should’ve spent more time researching the stock market.

Making money in the stock market is easier than one thinks.. you just need to know how the game is played, much much easier than housing and you don’t need the kind of ridiculous capital that you need to get into housing.

Btw, Huntington Beach is way more expensive than Irvine depending on the exact zip, but even in other parts it’s on par with Irvine. There is no cheap place in Orange County… if you want cheap you have to go to the real ghetto, City of Commerce which is where the nation’s drugs are peddled. The neighborhood is so disgusting that if this was Detroit houses would be selling for $5 or even free, but since it is LA the asking is “only” $500,000 LMAO![/quote]

no one said OC or socal in general is a cheap place. But come on now. $800k is a “starter” home? Yes it’s expensive in prime locations, especially since you waited that long. just like how stock prices were expensive waiting to Jan 2018. But there are plenty of places in decent hoods at the sacrifice of a longer commute.

2/2 townhome in Torrance for example is nowhere near $800k and about 1 hour commute southbound (been there, done that)

and, yes I call bullshit on you selling with a gain…But if you say so….

[Coronita]

[quote=kev374]

You do realize that securities can be bought and sold right?? I did buy those shares but I sold them all when it hit 260 for a handsome gain and bought back in around 236-245, even Warren Buffet himself could not have timed it more perfectly. While my timing in the housing market sucks looks like it does not quite suck in the stock market, perhaps I should become a trader LMAO! Actually it was a mistake to get out of the market, as the long term philosophy is to stay in which is what I learned from bogleheads.

This time I am in permanently, I am not selling anything even if it goes up![/quote]

I call bullshit on that one.

Of course everyone always talks about the time they bought and scored, no one likes to talk about the times they bought and got screwed….

Second, in continuing my idiocracy of trying to understand your home ownership logic…. I’m not following the relevancy of you not being able to afford an $800k home in Irvine as a starter home…
Yeah, I don’t think I would be able to afford a $1.0million starter home in Del Mar either, if I were in the same situation. In fact, I don’t think I would be even able to afford living in Del Mar as a renter if I wanted to eventually be a home owner.

BTW: just curious, I thought you mentioned you rented in Huntington Beach or something like that. not Irvine. So why are you mentioning home ownership in Irvine, which is considerably more expensive than where you currently rent? Doesn’t seem to be an apples-apples comparison.

[Coronita]

[quote=kev374][quote=flu]futures way down with trade war escalation.

stabilization of the markets my ass.

Gold on the other hand….[/quote]

S&P is up as we speak and it has bounced off the 200 DMA which is a key technical.

As for buying a home..i’m not against real estate in general but I am against buying it at these prices as it represents a greater risk than the stock market.

Your thinking is not accurate in my opinion that the stock market has risk… stocks have wild gyrations in the short term but over a long period 10-15 years stocks have always been a super bet…infact Case-Shiller analysis has documented that investing in equities is far superior than investing that capital in a house.

Buying a home at a 40-50% DTI which people very frequently do these days is exceptionally risky. There used to be a reasonable DTI in the past decades, 28% Front end ratio, all that is blown out of the water these days because banks themselves don’t follow it. There are plenty of people who blindly sign anything the banks give them, then they cry like victims saying the bank made them do it. No personal responsibility for guaging affordability on their own… a ton of people think they can afford it because the bank told them so which does make them idiots.

I think you fail to understand that a starter home (1500sqft with 2 car garage in Irvine) costs $800,000, even with a 20% down (which is a ridiculous $200k and would consume most people’s entire savings if they even have such a down.. everyone does not have rich Chinese parents!) with the plethora of fees HOAs, Mello Roos, City taxes etc. the increased expenses for maintenance, furnishing the home, fixing other stuff etc. etc. with such leverage you are one step away from bankruptcy if you lose your job. And since all your savings is now in your home (downpayment) you lose that as well.

With stocks at least I can sell my stocks even at a loss… and for the record, I am diversified, I have bonds as well which is the beauty of investing in stocks, I can buy any amount I want. I can’t buy half a house.

Buying a home in the current environment is an extremely bad financial move, just my opinion, of course you have yours. Just because I waited for things to come down and they didn’t does not mean I was wrong on concept, overvaluations and bubbles can last a very long time.

Yes, eventually your home will come back up in value through a severe downcycle but it’s much more likely you will lose your home and will not be able to ride out a hard time than having your money in stocks and being able to ride it out. As I said I have six figures in bonds which could tide me over for a few years in an absolute emergency. If I put all my money down for a home I would be seriously F-ked![/quote]

So just one question….

So your argument is, that you were better off to speculate in the stock market in January by putting a large portion of your net worth all into the stock market on one index fund

…better than if you were to have speculated in the stock market this month, by doing the same thing with the same amount of money this month?

or

…better than if you were to have put 20% down on a $300k condo and left the remaining amount in cash as an emergency fund, possibly in ladder of CD’s, with a smaller percentage in SPY (with that smaller SPY purchase taking an 11% hit)….

I’m sorry, I’m an idiot, I’m just not following why going all in (or at least mostly all in) into the stock market seems to be a safer route….

[Coronita]

[quote=SK in CV][quote=flu]futures way down with trade war escalation.

stabilization of the markets my ass.

Gold on the other hand….[/quote]

Gold has another thing causing influence that it never had before. Global instability always has meant a rush to gold. Probably still the case, but the crypto tank has coincided with the run up the last 90 days.[/quote]

Funny thing is. I was looking at ebay, and noticed that the purchasing of gold bullion has seen a lot of uptick… Some folks purchasing 100+count 1-ounce bullion sets in one shot.

I guess folks are trying to convert their under-the-table crypto currency gains into hard currency (still under the table more or less, I guess)

[Coronita]

futures way down with trade war escalation.

stabilization of the markets my ass.

Gold on the other hand….

[Coronita]

[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.

[Coronita]

[quote=kev374]market is stabilizing nicely today, looks like we bounced off the 200 DMA and now heading higher.

The brief period of consolidation on Monday was perhaps healthy as it took off some excesses caused by Trump’s ridiculous nonsense and now the market has had Trump fatigue so they can tune him out and we can focus on earnings season coming up driving the markets to recapture the old high and go higher.

The original forecast that most had was S&P 3000 by year end and that still looks likely given fundamentals.[/quote]

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.

[Coronita]

[quote=kev374]market is down only 11%, hardly a house of cards crashing… when we lose 30% then we can talk about a crash, but right now it’s bullish.[/quote]

Huh?????

In the past you’ve complained so much about the affordability of housing and put off buying thinking if you bought, home prices might correct and if I remember were fretting over a decline of anything 10+% or more.

I don’t get it. You worried about home prices falling for so long, despite it would have been your primary home and part of that would have been an alternative to paying rent….But losing 11% in the stock market in just a 3 month period is no big deal???? Perhaps the rationale is that since one hasn’t sold the stock index funds, technically one didn’t lose money yet. Ok fine… by the same note, technically if one doesn’t sell a primary home with a declining price , one hasn’t lost money either….and at least in the later case, you aren’t paying a làndlord anymore too. How fast do you think SoCal home prices would correct 11+%?

Also, what is the average annual return of the stock market for the past 20 years? it isn’t double digits, if I recall.

This is why I was very surprised you put a huge chunk back into the market after sitting out so long, all at once. it just seemed like it was inconsistebt with the aversion you had to risk in real estate, when imho both are have roughly the same investment/speculation risk.

[Coronita]

[quote=carlsbadworker]Of course, I don’t know anything about what’s going to happen in the future, but I am just trying to make a more educated guess.

I completely agree with you that if the trade war happens, stock market will crash from here. The discussion is ONLY to assume that it won’t happen, as both China and US do not really want escalation in the trade war.

With that, I quote Jeremy Grantham in one of his recent writing:

The fundamentals are improving. The global economy is in sync for the first time in a dozen years and global profit margins are at a high; in the US, a corporate tax cut is on the way, which in today’s sticky, more monopolistic world, is unlikely to be quickly competed away as theory suggests, but very likely to further fatten the corporate share of the GDP pie.

There is just no sign of corporate future earnings to decline, excluding a big external shock such as trade war. Therefore, I am just presenting the argument that the decline may not be sustainable.

Yes, interest rate is rising, but the corporate debt to equity is at its lowest level in the past decade (the data itself, however, doesn’t prove anything, as 2007 corporate debut to equity level is also very low but we all know what happened in 2008).

What’s your side of argument of corporate earning decline except the trade war? Trump’s tweet on FANG stocks isn’t going to have a long-lasting effect.[/quote]

My only argument is the trade war or at least the fear of it, causing a stock selloff, which makes shareholders upset, which causes companies to cut back/layoff people, which then leads to a cut in consumer spending. And I agree, if that happens, the markets are in big trouble.
But to some extent, I already think there’s already some damage done.

Me thinks the markets and economy in general has a lot more to do with how people feel than how it really is, followed by perception turning in reality. But who knows. Interesting times though. Long term, this will just be a blip, so drip drip drip invest away.

Personally, I don’t think rising rates are really that big a deal. but that’s just me.

[Coronita]

[quote=carlsbadworker][quote=flu]I’d say we are finished for the rest of the year. trade war looms. s&p ends negative this year[/quote]

Unless the trade war indeed materializes, I find it hard for S&P to trend negative continuously if the corporate earning still trends upward. Not that they don’t deserve to go lower based on its sky-high PE10 ratio.[/quote]

Doesn’t corporate earnings reflect what happened in previous quarter. I am.just looking at this from the tarriff perspective. So China just decided to impose tarriffs on farm goods. What if it escalated to other things like auto and aerospace, and then those things trickle.down to parts supplier.

meanwhile seems like trump is hell bent on attacking FANG companies and it looks pretty effective.

seems to me the markets are just looking for an excuse to sell off.

I’m sorry, but things just seem pretty out of wack and pretty overinflated especially in tech. A home we’re trying to rent out we got interest from a bunch of folks, and the comp packages being thrown around is just mind boggling, I don’t see how it can be sustainable…For example, a Tesla engineer applying to lease reported his annual comp is…..$600k…this is from a company that is bleeding cash…. I don’t see how this is sustainable.

[Coronita]

I’d say we are finished for the rest of the year. trade war looms. s&p ends negative this year

[Coronita]

[quote=kev374]very bearish sentiment around here when it comes to stocks and very bullish on housing.. seems strange to me as I think if equities do poorly it will affect housing but this is a housing forum so…[/quote]

Not really bullish on housing….but…all else being equal, if one wanted to speculate and put a big sum of money on one hand between the stock market and housing when both are high beginning of this year, I would picked housing if I was still paying a làndlord each month . At least if both declined, one would still be able to live in the later. Can’t live in stocks. and I doubt housing would fall as hard and fast as the stock market can.

In fact, I would have tried to have my cake and eat it too by doing housing instead of rent, and then slowly drip whatever I had left into basket of indexes, both foreign and domestic. You know, that dollar cost average “scam” as some say, lol. Although it certainly wouldn’t allow one capture a big whale, it would have reduced exposure to a sudden in fall in the market if my timing was off

[Coronita]

still think folks would have been better off buying a home to live in so they don’t need to pay rent instead of speculating in the stock market starting in January of this year.

[Author]

Posts