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March 27, 2007 at 7:21 PM in reply to: millionaires moving in keeping prices flat in high-end markets? #48585
Happy renter
Participantno_such_reality,
The future earings will only be worst! From real estate & financial then spread over the whole market. Even with Gov’t or Fed’s influence, it will only slow down the crash, but not getting better.
Do whatever you feel comfortable!
ParticipantYes jg, I am prudent. I’m sure the bal. of your portfolio is up at least a few % today right?
I don’t know which funds do you have. I would avoid fund has restriction for holding period and redemption fee for shorting position.
Good Luck!
Participantno_such_reality,
1. In the absence of serious negative news? (There are a lot of negative news to the real estate already. And it will be more & more.)
Negative news:
http://biz.yahoo.com/ap/070326/economy.html?.v=82. Unless the stock is fundamentally weak and produces disappointments with earnings. (Stock price does not only base one the past earngins, investers look at potential future earnings more.)
FYI:
Shares of home builders were lower in late-morning trading, with KB Home (KBH, news, msgs) down 2.6% at $45.23 and Lennar (LEN, news, msgs) down 2.5% at $44.45.ParticipantFormerSanDiegan,
For example, if most investers buy long to one stock, it will go up right? If most investers sell short to one stock, what happen to that stock? It will go down.
If the real estate stocks crash, what do you think about the real estate market? It’s the psychology and they are all related!
Do you know why the subprime crashes so hard? Some hedge funds shorted them since end of last year already, so it crashed harder. The hedge funds made a lot of profits from the crash. I read that article, but I could not find it now.
Here is another related article (Subprime Collapse Helps Short Sellers):
http://www.nysun.com/article/50975I have a BA degree in Finance, and started to invest for long time. I never short since I am happy with my return. Plus I did not have time to monitor the market! Before I invest a stock, I look at all the data, realted news and finanical statement.
I never lost money in long term because I did not buy during the .com bubble. My friends laughed at me not buying the .com stocks with 100 PE ratio. She eventally lost most of her money. The same thing I insist not buying the house now. She laughed at me again. But that’s OK. Time can tell.
Shorting is very risky if you don’t understand the theory, companies and market. I can’t guarantee and you have to make your own decision!
ParticipantHi jg,
I am interested in shorting the market also, but I may only invest a portion of my money. My main goal is to speed up the “housing bubble” to pop faster and harder before the Gov’t bailing out. Bailing out will damage our economy more. So, I may be shorting real estate only!The flippers inflated the housing market and it’s time for us to fight back. But we do it Legally with Real cash.
Thank you!
ParticipantHere is the article:
ParticipantNice Cover bub!
ParticipantIt’s the tansition for correction, so you have to hand on it. You will find bargin when the market turns over. One day, the flippers will be the losers and we will be the winners.
Good Luck
ParticipantI disagree bailing out the REIC either! People should be responsible for what they signed and borrowed.
I disagreed with the low 1% fed funds rate a few years ago, not only now. We had NO vote since the Fed made the decision. I assume all the Fed’s memebers were ones of the smartest and most knowelgageable people in finance. Most of us here could predict the housing bubble, but the Fed’s members could not. Do you think they were qualified being the Fed’s memebers?
We can’t go back to the past, but we can’t forget the past. If we don’t realize the cause of the bubble, we will let the policy makers (few people) to commit the same error and create another bigger bubble for the whole population. We have not vote, but I hope they can hear our voices.
I know a lot of people support Greensapn. My friend said he was the “King of Enocomy” and the “best chairman” in the history. He lowered the interest rate and made all Americans had better lives and got rich from their houses!
I totally respect people’s own opinions! We all have the rights to express our own thoughts.
ParticipantI know Greenspan was not the only one who made the decision for the interst rate, but his vote was very influential to other Fed’s memebers. Greenspan WAS the ONE who represented the Fed to claim that there was no “housing bubble” in the public:
http://www.jsonline.com/story/index.aspx?id=42398&format=print
http://www.realtor.org/realtororg.nsf/pages/bubblerefute?OpenDocument
http://www.ultimateonlinemortgage.com/data/Newsletters/Greenspan%20sees%20no%20housing%20bubble.htm
Later, people realized that there was housing bubble, but Greespan claimed the housing bubble was not caused by the 1% Fed rate:
http://www.dailyreckoning.co.uk/article/101020062.html
He encouraged people to take advantage of the low interest rate to borrow more money. His goal was using the housing market to support the economy. But he went too far and completely ignored the long term damage since he knew that he would retire!
Now, Greenspan is commanding $100,000 for an hour-long speech. he’s averaging about one speech a week, meaning that he likely earned more than $4 million in speaking fees last year after leaving office:
http://money.cnn.com/2007/03/20/news/newsmakers/greenspan/index.htm?eref=rss_topstories
ParticipantFYI
Between July 2005 and July 2006, 42,034 more people moved from San Diego County to other places in the country than came here from elsewhere in the nation, according to county population estimates released today by the U.S. Census Bureau. That put San Diego eighth in the nation among counties with high domestic out-migration.
Since 2000, the net number of people who moved out of the county is even more staggering – 119,636, a figure greater than Carlsbad’s population.
http://www.signonsandiego.com/news/metro/20070322-9999-1n22census.html
ParticipantLA_Renter,
I agree with you! The Fed’s policy created 2 bubbles: 1 stock and 1 housing. Unforuntely, a lot of people never realize they are at risk for borrowing too much! They think the US economy is very good. Most of my friends still insist no housing bubble and it won’t crash.
This time, Fed will do everything to stop the housing bubble. I’m so excited to see what Fed’s going to do this time. That’s good that most of us here are knoweledgeable, rational and realize the threat. We are well prepared.
ParticipantFed concerns about the inflation a lot and wants to keep it at 2%. It is 2.2% right now. Fed tended to increase the interest rate, but it worried about the real estate market. So, it kept it 5.25% for now. I think Fed will look at the future data & housing market to determine the interest rate in the next meeting!
Participantjg,
I was trying to tell you double inverse fund is very risky, but you seem to be very confident and knowledgeable about the market.
If your return was 100% over last 2 years, you have enough principal to take the risk.
I admire you have the gut to be so aggressive. My return was 17% last year and I am happy about it. I speculate the market may decline due to the housing market slows down. But it should bounce back within 6 months – 1 year. I always have diversified portfolio and never buy short. But I like know and learn the products in the market. Thank you for sharing your portfolio and strategy with us.
Good luck!
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