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Thread: The best advice...

  1. #1
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    The best advice...

    Buy low, sell high!

    Does anyone have a statistical program to predict when these times occur for any given stock?
    What you say can and will be used against you.
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  2. #2
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    Quote Originally Posted by jim's trucking
    Buy low, sell high!

    Does anyone have a statistical program to predict when these times occur for any given stock?
    WSJ, brokerages peddling equity stocks/funds and con artists. Wait, I'm being redundant with that last one.

    An astute day trader can do very well by predicting short-term circumstances on selective issues, but that's a 24/7 job. Unless you're a day trader, insider or fund manager churning that narrow band for commissions, the best way to view equity stocks in our economic decline with no demand for domestic expansion capital is the historical 6.1% return on common stocks.
    These are my principles. If you don't like them I have others. ~Groucho Marx~

  3. #3
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    Quote Originally Posted by georged
    WSJ, brokerages peddling equity stocks/funds and con artists. Wait, I'm being redundant with that last one.

    An astute day trader can do very well by predicting short-term circumstances on selective issues, but that's a 24/7 job. Unless you're a day trader, insider or fund manager churning that narrow band for commissions, the best way to view equity stocks in our economic decline with no demand for domestic expansion capital is the historical 6.1% return on common stocks.
    ...and sometimes a day trader loses his shirt and goes on a killing spree. (That happened here not too many years ago. I forget the guys name, but he squandered his wealth, his wife's wealth, his home, his retirement...everything...then started killing people...got a full page color photo and several pages of news printed about him.)
    What you say can and will be used against you.
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  4. #4
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    Quote Originally Posted by jim's trucking
    ...and sometimes a day trader loses his shirt and goes on a killing spree. (That happened here not too many years ago. I forget the guys name, but he squandered his wealth, his wife's wealth, his home, his retirement...everything...then started killing people...got a full page color photo and several pages of news printed about him.)
    There are always winners and losers.
    These are my principles. If you don't like them I have others. ~Groucho Marx~

  5. #5
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    Quote Originally Posted by georged
    WSJ, brokerages peddling equity stocks/funds and con artists. Wait, I'm being redundant with that last one.

    An astute day trader can do very well by predicting short-term circumstances on selective issues, but that's a 24/7 job. Unless you're a day trader, insider or fund manager churning that narrow band for commissions, the best way to view equity stocks in our economic decline with no demand for domestic expansion capital is the historical 6.1% return on common stocks.

    Time and research, with an eye for doing the opposite of the masses.

    I prefer longer cyclical trends like oil, and the way the Auto industry used to be. Look at a 20 year chart of the major oil companies stock price compared to the oil price. If you would have bought some of the majors around 1999 when oil was in the low teens, and held untill now you would have made a killing. ( Now would be the time to sell the majors).

    The Auto industry used to follow the same trend of strong sales and a strong stock price, follow by weak sales and a low stock price.


    Then you can also look for distressed stocks or bonds. Elan Corp a drug company from Ireland recently had a huge drop on some FDA problems, buying at the drop, selling on the bounce. Or South Korean bonds during the Asian currency crisis, when short term interest rates skyrocketed (if only I had the money to invest in them back then)
    Admittedly, the concept of the Straussian text is one susceptible to intellectual mischief in the form of wild claims about the esoteric meaning of texts, not to mention rather off-putting for anyone who doesn’t like know-it-all elites.
    Orthodox Judaism, not to mention other religions: there is a small number of men who know the detailed truth; the masses are told what they need to know and no more

  6. #6
    Hunter Guest
    Quote Originally Posted by jim's trucking
    Buy low, sell high!

    Does anyone have a statistical program to predict when these times occur for any given stock?
    NO!!!!!!! Invest in real estate. Don't trust those rats on Wall Street. Proper investing in real estate is far better than shooting craps with most stocks.

  7. #7
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    Quote Originally Posted by Hunter
    NO!!!!!!! Invest in real estate. Don't trust those rats on Wall Street. Proper investing in real estate is far better than shooting craps with most stocks.
    Key word is "proper". Most will concede that we are now sitting on a RE bubble.
    Quote: "Mark Zandi, chief economist at Economy.com warns us of a possible real estate bubble: "The day of reckoning will come. The longer the housing boom lasts, the deeper the eventual downturn.”

    The Coming Real Estate Collapse?
    .... Right now, housing prices are rising far more rapidly than personal incomes. The gap between housing prices and what a home can be rented for is rapidly widening as well. These are both ominous trends ... and history shows us that neither of these trends will go on forever.

    All bubbles – including real estate bubbles – happen when the price of an asset accelerates beyond its underlying value. Then a price correction is guaranteed."
    Using leverage to purchase RE is fine in a growing market, but can bite you if conditions change. As in all investments, do your homework and realize the risks.
    Dono

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    Currently, real estate investment is a pretty poor idea. The only debate currently re: real estate bubble seems to be whether it is a $2 tillion bubble or a $3 trillion bubble. Withe interst rates projected to rise through the end of the year to at least 4.5%, it seems likely that we will find out which in the not to disatant future.

    Best advice for US stock market? Stay out of it. There are still bargains to be had on intl markets, and if you invest in non dollar currencies, you get the added bonus of benifiting from the decline of the dollar.
    If ye love wealth greater than liberty, the tranquility of servitude greater than the animating contest for freedom, go home from us in peace. We seek not your counsel, nor your arms. Crouch down and lick the hand that feeds you; May your chains set lightly upon you, and may posterity forget that ye were our countrymen. —Samuel Adams

  9. #9
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    Quote Originally Posted by daewoo
    Currently, real estate investment is a pretty poor idea. The only debate currently re: real estate bubble seems to be whether it is a $2 tillion bubble or a $3 trillion bubble. Withe interst rates projected to rise through the end of the year to at least 4.5%, it seems likely that we will find out which in the not to disatant future.
    The cyclical nature of residential real estate, when that market is hot, provides very attractive short-term investments financing contractor cash flow with first trust deed security. When it cycles and property values crash, picking up foreclosures, not section 8 or low/mid-income properties, for pennies on the dollar as portfolios write them down and turning them over to property managers as rentals is equally profitable as rental ROIs then rise to acceptable levels on low cap costs. When the market recycles, equity gains more than cover depreciation recapture and provide capital gain profits.

    People I know who use those investments, including myself, are going to pull our money at the next inevitable cycle, a crash, wait, and see what happens. Our concern is what can make real estate recycle; wages certainly aren't going up and interest rates are, which will make for a saturated rental market with what looks like could be an extended period of time.

    Anyone have any thoughts on recovery period of a potential crash? What's going to drive a recovery? The potential decline in GDP from what is our largest positive industry in our poorly balanced, internal transaction dominated economy could prove interesting. Any historical examples or just classic recession?
    These are my principles. If you don't like them I have others. ~Groucho Marx~

  10. #10
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    Quote Originally Posted by georged
    People I know who use those investments, including myself, are going to pull our money at the next inevitable cycle, a crash, wait, and see what happens. Our concern is what can make real estate recycle; wages certainly aren't going up and interest rates are, which will make for a saturated rental market with what looks like could be an extended period of time.

    Anyone have any thoughts on recovery period of a potential crash? What's going to drive a recovery? The potential decline in GDP from what is our largest positive industry in our poorly balanced, internal transaction dominated economy could prove interesting. Any historical examples or just classic recession?
    I am not a real estate guru by any stretch of the imagination. I own a doxzen or so residential properties (rentals) and a half dozen commercial properties (long term lease), and a couple of subdivisions, which were strictly follow the leader then pick up your check at the end.

    I have been speaking recently with a friend of my fathers who is the president of a fairly large banking chain about just this topic, though. Internally, they are predicting a 40% default rate on mortgages over the next 2 years (worst case, 32% IIRC was viewed as most probable). They are concerned that there will not be people standing in line waiting to snatch up these defaulted properties as has been the case in the past.

    According to him, the biggest question is one of quality of the newer homes. Everybody who can afford one has been buying a mcmansion (bland house of poor quality and no real distinction). Masonite (cardboard) siding and OSB (what used to be called chipboard) for roof sheeting and subfloor. While masonite performs GREAT in a lab, real world application tells us we cannot expect such great results on your house. A real cottage industry has popped up doing nothing BUT residing homes that were build 15-20 years ago using masonite siding. CPVC theoretically is just as good as copper. Again, though, real world application tells a different story.

    There are simply not enough folks out there paying for quality. New homes are 30 yr homes, not 150 yr homes. It is making real investors shy away.

    I don't think a historical model really exists for the current situation. This is a larger housing bubble than we have ever been on before, and at the base is a bunch of cardboard and sawdust houses.
    If ye love wealth greater than liberty, the tranquility of servitude greater than the animating contest for freedom, go home from us in peace. We seek not your counsel, nor your arms. Crouch down and lick the hand that feeds you; May your chains set lightly upon you, and may posterity forget that ye were our countrymen. —Samuel Adams

  11. #11
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    Did your conversatons include any crystal ball recovery thoughts?
    These are my principles. If you don't like them I have others. ~Groucho Marx~

  12. #12
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    No doubt. Real Estate. Works for me.

  13. #13
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    Quote Originally Posted by georged
    Did your conversatons include any crystal ball recovery thoughts?
    Not really, just a lot of "too many factors" and "worse than anything we have seen to date".

    I gave him my current asessment of the situation, which is not pretty, and he said "it is far, far worse than you realize". He suggested switching to protected investments (even non dollar based) by the end of they year, and making sure that I have plenty of liquidity to make sweetheart buys when they come up (he knows my primary interest is ag land, which is different that buying up residential or commercial real estate).

    In other conversations I have had with some folks I know who are real estate moguls, they seem to have the same attitude, namely keep liquid, be ready to strike when the iron is hot, and don't get mired down in any kind of pre-concived notion as far as how low the market is going to drop. There does seem to be some disagreement about when the best time to cash out of the current cycle is. A couple of guys are selling RIGHT NOW. A couple more are waiting for a couple of months to see how the market develops.

    The one thing I have not heard is "I think that everything will be fine".

    Nobody is buying right now (at least not the pros, the american public is continuing forth with their normal ignorance)


    There is simply not any precedent for sucha large bubble, and definatly not a precedence for such a large bubble based on junk housing to begin with. Additionally, there seems to be a lot of speculation regarding other economic factors that will almost certainly have an effect on the market, like the de-industrilaization of our nation. Many who I consider to be knowlegable (and have the assets to back it) seem to be afraid that the real estate burst will be the start of a nasty slide for the whole economy. They are concerned that the stock market will go badly south in the wake of such a bubble bursting, since people will almost certainly liquidate investments in a last ditch effort to save their bloated lifestyle.

    The real wild card seems to be to most I have spoken to how US government will handle the situation. If, as our economy comes crashing down around our ears, they handle things by lashing out internationally, things could get very nasty very fast. It seems apparent that the rest of the world is about fed up with us using our military as a trade negotiation tool. As much Us debt as other naitons are currently holding, and as dependant as the dollar is on their continued good will to retain any value at all, the crystal ball really needs to be focused on the white house.
    If ye love wealth greater than liberty, the tranquility of servitude greater than the animating contest for freedom, go home from us in peace. We seek not your counsel, nor your arms. Crouch down and lick the hand that feeds you; May your chains set lightly upon you, and may posterity forget that ye were our countrymen. —Samuel Adams

  14. #14
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    Quote Originally Posted by daewoo
    Not really, just a lot of "too many factors" and "worse than anything we have seen to date".

    I gave him my current asessment of the situation, which is not pretty, and he said "it is far, far worse than you realize". He suggested switching to protected investments (even non dollar based) by the end of they year, and making sure that I have plenty of liquidity to make sweetheart buys when they come up (he knows my primary interest is ag land, which is different that buying up residential or commercial real estate).

    In other conversations I have had with some folks I know who are real estate moguls, they seem to have the same attitude, namely keep liquid, be ready to strike when the iron is hot, and don't get mired down in any kind of pre-concived notion as far as how low the market is going to drop. There does seem to be some disagreement about when the best time to cash out of the current cycle is. A couple of guys are selling RIGHT NOW. A couple more are waiting for a couple of months to see how the market develops.

    The one thing I have not heard is "I think that everything will be fine".

    Nobody is buying right now (at least not the pros, the american public is continuing forth with their normal ignorance)


    There is simply not any precedent for sucha large bubble, and definatly not a precedence for such a large bubble based on junk housing to begin with. Additionally, there seems to be a lot of speculation regarding other economic factors that will almost certainly have an effect on the market, like the de-industrilaization of our nation. Many who I consider to be knowlegable (and have the assets to back it) seem to be afraid that the real estate burst will be the start of a nasty slide for the whole economy. They are concerned that the stock market will go badly south in the wake of such a bubble bursting, since people will almost certainly liquidate investments in a last ditch effort to save their bloated lifestyle.

    The real wild card seems to be to most I have spoken to how US government will handle the situation. If, as our economy comes crashing down around our ears, they handle things by lashing out internationally, things could get very nasty very fast. It seems apparent that the rest of the world is about fed up with us using our military as a trade negotiation tool. As much Us debt as other naitons are currently holding, and as dependant as the dollar is on their continued good will to retain any value at all, the crystal ball really needs to be focused on the white house.
    Same conversations I'm hearing. If RE dumps with a massive spread there's nothing on or over the horizon to drive the economy other than another phony war. With a bunch of history desperate, irresponsible characters in charge. Everyone I know is staying liquid other than good bonds, commerical property (medical) and short-term stuff.

    Those holding RE having negligible or negative equity with debt are going to be holding an empty bag.
    These are my principles. If you don't like them I have others. ~Groucho Marx~

  15. #15
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    Quote Originally Posted by daewoo
    According to him, the biggest question is one of quality of the newer homes. Everybody who can afford one has been buying a mcmansion (bland house of poor quality and no real distinction). Masonite (cardboard) siding and OSB (what used to be called chipboard) for roof sheeting and subfloor. While masonite performs GREAT in a lab, real world application tells us we cannot expect such great results on your house. A real cottage industry has popped up doing nothing BUT residing homes that were build 15-20 years ago using masonite siding. CPVC theoretically is just as good as copper. Again, though, real world application tells a different story.

    There are simply not enough folks out there paying for quality. New homes are 30 yr homes, not 150 yr homes. It is making real investors shy away.
    Man, is this the truth.

    My experience -

    Calgary is the center of Canada's oil patch, and with oil riding high, Calgary is seeing an unprecedented real estate boom. (When oil went in the tank in the mid-late 80s, you could buy entire subdivisions in Calgary for $1, just take over the mortgages and they were yours.)

    They can't build the houses fast enough. My brother, and my best friend both recently bought new houses, my brother's was about 2 years old, my friends was brand new. Both are way out on the outskirts of the city.

    I wouldn't pay half of what they paid, because the houses aren't worth it. They're structurally poor, sloppily built, and carelessly finished. They're modern, and they look great, from about 25'. Two year old houses on stable, well drained soil and bedrock, with cracks in the walls, and don't even get me started on the quality of the interior finish work.

    I've actually talked to several people in the trades, a couple of them lifelong friends, that will no longer work for the big home builders, their consciences won't let them, and nor will their pocket books. Cut every corner, work 16hrs/day for 10hrs pay, and be treated like dirt for your trouble. They've all moved into residential renovation or small commercial companies.

    I renovated the basement of our place myself, completely gutted it - 50 year old concrete, and not a single crack. The entire place is built out of 2X4 and 2X6 Fir, actual plywood, and real plaster and brick. The house will easily stand for another 50 years, with ZERO problems.

    Not to XXXX my own horn, but I bought in an inner city neighborhood, a 5-10 minute commute to downtown. I searched it out thoroughly and found a neighborhood that was just on the cusp of a major rejuventation. The houses are bungalows, modest homes from around 800-1200 sq ft, on 60'x120' lots, built in the mid '50s. The area is zoned R2, both good and bad. It will never be "prime", but the lots can be subdivided, and houses can be rented. As it stands, the homes in our area have increased at an approx. 20% higher rate than the average, and the tide of new infills is rapidly marching my way - $$$$$$..

    I'm relatively new to the game, but I've heard a lot of the horror stories from the guys that lived through the oil crashes of the 70's and 80's, and IMHO, it's not if, it's when will it happen again. There'll be a lot of people with some serious problems.

    Waxy

    P.S. - I've got a cousin that owns a hardware store/lumber yard, and he'll swear up and down that today's OSB is actually superior in every way to plywood.

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