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powayseller
ParticipantTry Great Bear Funds . I think only a few companies offer inverse funds.
ParticipantMy recession call is early. However, I am earning over 5% in my CD, and when the market does tank, it won’t take me down with it. I purposely exited the market early, expecting it to start dropping this fall. It looks now like I was 1 – 2 quarters early. However, I am in good position earning risk-free over 5%. Soon, these markets will tank, and when markets tank, they don’t give any warning.
Is there any doubt the market will tank? The last 10 housing busts on record have led to recessions, except the two busts occurring during the Korean and Vietnam Wars (wars are good for the economy). Now, the Iran war is just causing more debt, so it is not stimulative as the other wars were. I’ve always admitted I’m not a market timer, but a long term investor. If you want to do some good short term trading, check in with Chris Johnston. He’s very good at that.
ParticipantI had a bad experience with a Profunds inverse fund. Neither Profunds’ website nor their prospectus described how they invest the money. I communicated via several e-mails, and still had no answer, and ended up reporting them to the SEC for failing to disclose their holdings. At the time I checked them out this spring, I noticed their fund was not the inverse, as it was supposed to be. I didn’t realize Rydex existed, and forgot all about bear funds until I read America’s Bubble Economy.
Shortly after my debacle with ProFunds, I came across this story from OutatthePeak.
Partial quote: “I am closing out on all Profunds because they have mismanaged my money. They refuse to even give me an explanation of what happened. SRPIX’s goal is to be the inverse of the Dow Jones Home Builder’s Index. Over the last 12 trading days, DJ_HOM dropped 10%. This should result in SRPIX being up 10% or close to it. Instead I’m down! What the f**k did the fund manager do? This person is obviously terrible with our money.” – OutAtThePeak
Josh, just google “bear fund” or “inverse fund”.
Participantjg, you rock! Great chart once again…
Participant4plex, I understand the concept of shorting and puts, and am very confident the homebuilders and lenders have much further to fall, but am clueless about the entry and exit points. However, I would love to learn more about this, so could you tell us more about how you decide on your entry points on puts? Do you have puts now?
I think I’m causing too much problems with my questions about shorting WaMu and homebuilders. I thought it would be an interesting discussion, and maybe I would make a final decision and jump in myself. I even bought a book about options. But then I realized it is too risky for me.
Do you guys really think that everybody who reads this forum should be buying options or they are idiots too? This is maybe off-topic, but I find the personal insults toward me interfere with the discussion, and makes me enjoy this forum less and less. And you know what happens when people have had enough – they just find better places to hang out.
ParticipantWhat is really mind boggling is the insults you send my way. I’m not even sure what to say to a comment like yours, other than wondering why you are so hostile?
October 19, 2006 at 10:56 AM in reply to: Differences Between The Tech Bubble and the Real Estate Bubble #38037ParticipantNov 18, 4pm, Today’s Pizza in Sorrento Valley.
ParticipantI don’t have an options account, so I didn’t short WaMu. Instead, I bought shares in Rydex Dynamix Inverse Dow and S&P500 funds. I know nothing about shorting and options, so I decided to play it safe.
ParticipantGreat post from Barry at the Big Picture about the follies of reading too much into the headline numbers, Delving Deeper Into Housing. He explains that the housing starts of 6% have a margin of error of +- 9%, thus making the starts figure meaningless (since they could be -3% to + 15%, and include zero). What is significant is the 17% drop in starts from last September.
ParticipantEric at iTulip.com made a good post yesterday about why he is shorting the market now. (Thanks, Perry for that tip on how to open a new window.)
He writes, “mostly I try to dump the asset class de jour near–not at–the top of the current bubble cycle and go to cash while looking for the next one to ride. I do take sometimes take some short positions in the transitions, but these are never more than 10% of my portfolio. Two reasons. One, as Jeff points out, hardly anyone gets the timing right to pull it off. Two, if you buy and sell trend changes near the top and near the bottom, you don’t have to.”
ParticipantGood post. Prices are set by the few sellers, demand weakened at the low end due to exhaustion and the ripple effect is working up the chain, and buyers get more fearful as prices drop because the prices could drop even further. Add to this the theme of inventory glut. Inventory must be worked through, and all the construction in the pipeline is making it worse. (Roubini talked about inventory glut in capital goods as a reason that the Fed cannot save us from the recession.)
Participantsdcellar, I’m still here, but have been busy with family visits and some volunteer work.
October 19, 2006 at 2:19 AM in reply to: Year to Year price changes for Ventura and Los Angeles real estate #38028ParticipantYou can buy this from Dataquick, as I have done. They have monthly data going back to 1988. You can get the latest month for free on their website. My website will have sales and median prices for all So. CA except San Bernardino County, so you’ll have it in a few weeks.
ParticipantThe price goes down 50%, but you doubled your money. Yup, you’re right. I was too quick to admit I was wrong. But how would it work if you bought Put options or a bear fund? My dynamic bear fund is supposed to return 200% of the movement in the index, so a move from $5 to $2.50 should yield a 100% gain. Maybe North County Jim can set this straight.
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