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(former)FormerSanDiegan
ParticipantBased on the current available information, the title of this thread should be changed to
“2001 prices plus 25% – sold in Del Mar”
Yawn …
That’s about 4% per year.
ParticipantThese two guys lived rent-free in San Diego …
From a CNN Summary of 9/11 commission report …
The report singles out as the intelligence community’s “best chance” to unravel the plot connections that two of the hijackers, Nawaf Alhazmi and Khalid Almihdhar, made as they settled in the San Diego area in January 2000. Both men were among the hijackers who flew American Airlines Flight 77 into the Pentagon.
CNN previously reported Alhazmi and Almihdhar, while in San Diego, lived in a house belonging to a man who was an FBI informant but who, sources have said, had no information about the men’s intentions.
But one FBI agent who was responsible for the informant in San Diego told the joint inquiry that he was unaware that intelligence information was available on the two hijackers before September 11.
“It would have made a huge difference,” the agent said. “We would have immediately opened … investigations.”
ParticipantThe poo-poo head post will be impossible to top, but I’d like to nominate a couple threads as runners-up:
1. In the “Officially turned into a nut-job” category, I’d like to nominate …
http://piggington.com/off_topic_did_this_really_happen?
It is best summed up by the last statement of the last post, which follows … “maybe the CIA hypnotized the space aliens to make them zap the Pentagon from orbit.”
2. In the “Best reaction to a mis-guided solicitation” category, it has to be …
Participantdavelj –
Thanks.
I tend to agree that investors are not accounting for risk properly in recent years (one look at sub-prime mortgage market tells us that). Certainly, a decline in earnings and subsequent shunning of stocks by investors could result in the scenario you laid out.Modest increases in interest rates, economic slowdowns and earnings recessions are likely to come our way at some point and result in a change (decline) in stocks.
However, by one simple measure, stocks have reverted to the mean. According to Bob Brinker …
S&P 500 P/E as of beginning of May * : 16.1
50-year average of S&P 500 P/E : 16(* Forward-looking P/E assuming 5% earnings growth from actual 2006 levels)
Participantf_l_u –
Of course we didn’t. The primary post was discounted by many at the outset. Recently, this has become the most convenient place to post ramblings about where stocks might be headed … or not.
ParticipantCritter –
“Did you say soiled? heh, heh, .. Thats. Awwwwwwsome LMAO
ParticipantI occasionally check her site for content. She posted a similar thing on her own website, using similar words. The posting on voiceofsandiego says some of the same things she posted on hers.
Some excerpts and the link below …
One more thing: some people on the piggington forums ask what happened to powayseller. After I wrote that “Rich and I missed the boom”, which is true, he really lost his cool, and frankly I did not like contributing to a site where now the host was calling me some bad names. That was on top of having to deal with personalities like jg and others who often put me down, for no reason. I just got tired of dealing with them.
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I also lost respect for the low level of reporting on that site, and the host’s reluctance to learn from others. I had sent him referrals, realtors he could interview, and they all told me he never called. I sent him emails with corrections to stories in the last few months, but no corrections were ever issued. So there is an air of super sensitivity, and that goes to the clash we had: Rich allowed all name calling in the forum, but absolutely would not tolerate any critique of his reports.
Sounds similar to the post on VOSD.
The unspoken rule over there is “do not disagree with the God”. The worship over there went against my sensibilities.I hope that nobody worships me like that. I would never want that. Please always use your common sense, and don’t blindly believe people who try to teach you about real estate from behind a desk. I stopped reading Rich’s reports, because he uses data to speculate, instead of using facts/interviews to understand. So he comes up with some colorful graphs, but some of them frankly are wrong and misleading.
I realize he dropped me from his RSS Feeds for his website, so my reports are no longer posted over there. This was likely because he did not like that I corrected his story that NODs are must-sell inventory, leading to price drops. He was also mad, as I said above, that I wrote that ” I and he missed the real estate boom”.
I have no problem admitting that, or acknowledging any mistakes. I constantly question other people, so I can keep learning. Demand that of your advisors! Be careful getting your real estate advice from people who do not want to learn, who refuse to disclose their own real estate investing history, or who have a need to be worshipped rather than understood.
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A big difference you will find here is that I welcome your comments, no matter how much you disagree with me.
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Participantdavelj –
I did not say that stocks were cheap, particularly at this stage of the economic cycle. But they are not as overvalued as the uber-bears lead us to believe. Earnings growth dropping below 10% in the first quarter (down from double digits) and potentially dropping further and potential rise in interest rates are definitely concerns.
I would not be surprised with a 10-20% decline in stocks sometime in the next 12 months.
If one is expecting interest rates as high as the late 70’s/ early 1980’s, then I’d definitely shy from stocks.
I don’t expect that.Now, about that risk premium. How does your current assessment of a risk premium of 1.5% compare to history ?
Below is a chart showing the S&P 500 P/E and inverse yield on the 10-year bond.
There are definitely periods (e.g. before 1964) where a risk premium appears, but it tends to be small or non-existent most of the time.
1974 – 1980 was the only period I can find where the risk premium re-appeared after 1964.EDIT: Today 100/10-year yield is 21.4.
[img_assist|nid=3322|title=Stock Market P/E and Inverse Rates|desc=|link=node|align=left|width=466|height=315]
ParticipantFSD, what have you indexed since ’00? S&P 500 and Russell 2000, 50%/50%, like I did until 2 1/2 years ago? S&P has been dead flat since ’00. Russell is up 60% since ’00. 50% at 0% + 50% at 60% over six years = 6% per year. How can you call that “…worked out OK…”? 6% okay? Up your standards, sir.
Yes, I will take that 6% per year in a period that included an 80% decline in some tech stocks, a recession, a terrorist attack on US soil, two wars, the worst stock market performance in a a couple generations, and a period in which cash paid about 2% up until the last 2 years.
Yes, I’d call 6% per year working out OK.
TO answer your quesiton :
I have used SPY (S&P500) and VTI (Wilshire 5000) as my primary stock holdings since 2000. However, I don’t blindly index. These make up the primary portion of my stock holdings, but not all of them. I occasionally buy stocks, funds, and ETFS, including international (e.g. EFA, EWJ) to balance risk and move to/from cash on occasion.For example, today S&P 500 and Wilshire make up about 35% of my total (over half of my stock allocation). In 2004, these indexes accounted for 45% of my portfolio, which was ~80% stocks.
Participantjg –
And, liquidating a portion of the portfolio to fund a downpayment on a second home is not foreseeing a bubble, moving out everything, and watching the carnage from the sideline.
It’s kind of like me saying that, yes, I missed the upcoming ’06-’10 housing crash (without adding ‘because I lost my job in ’03 and had to sell my McMansion’).
Forthrightness, FSD.
I did not liquidate and sit on the sidelines in 2000. I simply moved my funds to what I thought would be a better investment based on the relative valuation of stocks and rental real estate. What’s wrong with that ?
That said, the funds liquidated were only my non-retirement assets. My retirement accounts stayed primarily (but not close to 100%) in stocks.
I believe in porfolio balance, not putting eggs in a single basket, but that’s just me. Probably too conservative.
ParticipantDid any of you foresee the pop of the NASDAQ bubble back in ’00? Or the fall of the S&P 500, then, too?
I began liquidating stocks in March -April 2000 in order to generate a down payment to buy a second house. SO, yes, I did. Of course it was mostly luck as I didn’t see stocks falling as much as they did.
That said, I’ve always kept a healthy chunk of my investments in stocks (between 50-80%) primarily in index funds. It has worked out OK. I have trimmed it down to ~65% over the last 12 months (unfortunately, at least in the near term).
Stocks are not nearly as overvalued as some here are led to believe. P/E ratios in the 17-20 range for S&P 500 in a 5-6% interest rate environment is nearly properly valued IMO. That is based on fundamentals, not psychology.
Sure stocks are vulnerable to a slow-down in the economy and could easily fall by 20% should we hit recession. But, in general stocks are not as overvalued as housing was in 2005.
May 3, 2007 at 8:13 AM in reply to: “Those who say the prices are going to go down 50 percent are just yahoos who are not looking at the whole picture,” #51688ParticipantFWIW – I partly agree with the quote.
I’m guesstimating a ~35-40% real decline from the peak for Central SD SFRs, most likely a 20-25% drop in nominal price and 15-20% inflation spread over 5-6 years. Just my opinion.
A 20% nominal price decline would leave most of this board waiting for more.ParticipantThe reports were kind of surprising to the up-side.
Actually, if you exclude the effect of transportation factory orders rose 1.9%, which is greater than 50% of 3.1%.Also, note that non-defense capital goods orders excluding aircraft jumped 4.8 percent.
Overall a surprisingly good report. Not what I would have expected either.
WASHINGTON (Reuters) — New orders at U.S. factories rose a greater-than-expected 3.1 percent in March on a rise in civilian aircraft orders, a Commerce Department report showed on Wednesday.Analysts polled by Reuters were expecting factory orders to rise 2.1 percent. February orders were revised to show a 1.4 percent gain.
Decline in business spending raises alarmsExcluding transportation orders, factory orders rose 1.9 percent after being unchanged in February. February orders excluding transportation were first reported as a 0.4 percent decline.
Orders for durable goods, items meant to least three years or longer, also rose a bigger-than-expected 3.7 percent in March. Analysts were expecting durables orders to gain 3.3 percent.
In a sign sluggishness in business investment may have been short-lived, nondefense capital goods orders excluding aircraft, considered a proxy for business spending, jumped 4.8 percent, the first gain in three months and the largest rise since September 2004.
Transportation orders jumped 9.5 percent on a 38.1 percent increase in civilian aircraft and parts. Orders for metals, machinery, electronic products and electrical equipment all rose.
ParticipantIt’s May 2. The S&P 500 is up another 3.5% since the first day of Spring.
It is time to prepare to “sell in May, then go away” ???
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