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Old 07-13-2008, 12:20 PM   #21
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Now that's optimism. Where I live nobody shows up at open houses with prices 15% below what Zillow is currently listing. One is even throwing in a new car with the purchase. According to the media, (and Zillow) prices have fallen about 10 or 15%. I'm wondering what the true market price is if houses were sold "at the best bid" by the banks and the banks do own quite a few of them here. I hope the decline stops also, but I doubt it is has bottomed or will anytime soon. Mortgages money is really not available except at the mid to lower end of the market and even that may be a problem soon with Freddie and Fannie. If the upper end is in decline, everything will adjust down with it. I'd sell mine for 10% below what Zillow has (Zillow looks reasonable compared to what the media has for our area), which is $100k less than I have into it. Want a good deal, buy low sell high!
Obviously, all real estate is local. At some price, the market is going to begin clearing. I know a guy that has raised about $100 mil to begin buying properties in some of the more distressed areas of California. He made a fortune during the S&L crisis and sees this as his second once-in-a-lifetime opportunity.
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Old 07-13-2008, 12:26 PM   #22
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Obviously, all real estate is local. At some price, the market is going to begin clearing. I know a guy that has raised about $100 mil to begin buying properties in some of the more distressed areas of California. He made a fortune during the S&L crisis and sees this as his second once-in-a-lifetime opportunity.


I hope you are right. I just cannot see how it can bottom without some new system to get mortgage money flowing but things can happen. IMO bailouts will not help, just delay the process and that seems to be where we are headed. In the early 90's the problem wasn't lack of available mortgage money.
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Old 07-13-2008, 12:32 PM   #23
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Psst - Wellesley!
heh heh heh
Uncle Mick, my friend, as long as you are still pssst-ing Wellesly and ending your posts with your trademark "heh heh heh", then all is right with the world and I'm not going to panic.

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Old 07-13-2008, 02:02 PM   #24
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I hope you are right. I just cannot see how it can bottom without some new system to get mortgage money flowing but things can happen. IMO bailouts will not help, just delay the process and that seems to be where we are headed. In the early 90's the problem wasn't lack of available mortgage money.
You don't need new systems to get mortgage money flowing, you need to get rid of the recently new systems of getting mortgage money flowing to people that shouldn't get it. It's still not difficult to get a mortgage, all you need is a decent (provable) income, low debt, and a relatively good credit rating. Just the sort of people who should be able to buy. No tricks, no floats.

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I'm going to buy probably in 2010 when they're down 50% in California. May be lower, markets often overshoot on the downside as much as they do on the upside.
Until a couple months ago I lived in the DC Metro area. House sales were down a tad, but prices were up a percent or two over the previous year. Some houses in our neighborhood were priced too high, and took a long time or a big cut to sell. Others, priced reasonably (but not lower than last year) sold faster. We sold ours in less than two weeks. We're in the high-end market, and from what I've read there's more of an inventory in the lower cost homes, but they still sell and at a decent price. A house I sold 15 years ago for $225K just sold a month ago for $620K. How could anybody complain about that?

Real estate is local. California always overdoes things, so when it all goes to h*ll, it goes a long way. But it will still end when things get to a natual balance. I doubt very much you will see any 50% price drops. But I'm an easterner, so I may be wrong.

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Old 07-18-2008, 09:21 PM   #25
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Dow Jones when contrary thread started: 11,100.54
Dow Jones as of end of day 7/18/2008: 11,496.57
Change: 396.03 (+), 3.6%

So far so good
(Actually, If I had to bet, I would bet a re-test of the low will happen)
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Old 07-19-2008, 12:31 PM   #26
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The metaphor that stands out the most in my mind is Want2Retire's epic "Record Dow! Whee!" post and the subsequent kabuki-theater play of events. Don't blame her for the stock market's reversion-- just appreciate that she managed to call the top, just as others have, but in a particularly eloquent manner. In a few months (hopefully) others will be calling the bottom. Or not.

As for your prescience, Danm, in 2003 a guy on FundAlarm.com (Jughead) sold his "overvalued" house and went to a portfolio that was 25% gold, 25% oil, and 50% cash. He was eventually proved correct, too, but I'm not sure how his (or your) returns stack up against those who rode the tsunami and its subsequent landfall.

Our predictions are all 100% accurate, it's just that some of us have had to wait longer than others for our prescience to prove itself. The real question should be what the timers are going to do next. Is it time to time the market again? Luckily the asset allocators don't have to make that series of decisions. Perhaps all asset allocators are former (or reformed) timers.

As for the rest of the thread titles mentioned at the beginning of this one, I think that they generally reflect the sentiment of whatever's running on CNBC and headline news of the day. Especially now that the board has a number of posters whose sole interest seems to be amplifying, not interpreting, those headlines.

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Originally Posted by copyright1997reloaded View Post
Dow Jones when contrary thread started: 11,100.54
Dow Jones as of end of day 7/18/2008: 11,496.57
Change: 396.03 (+), 3.6%
So far so good
That summary kinda skips the excursion into the 10,000s, doesn't it?

I don't know whether we've hit a bottom or not. I will say that all of the euphoria & hysteria over the last six months is pretty amusing considering that market volatility has only been a fraction of the VIX experienced during 2000-2002. How short and corrupted our insitutional memory seems to have become...
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Old 07-19-2008, 12:42 PM   #27
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I take heart in the results of this poll http://www.early-retirement.org/foru...e-37136-3.html. The tone of the threads has been so negative lately despite this being "barely a bear" yet, suprisingly, the bulk of us are staying the course (as we should if we have an appropriate plan). I have to thank the many wiser, and cooler, heads here and at Bogleheads for continuing to pass on there wisdom and experience from the past against the prevaling winds of doom and gloom...

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Old 07-19-2008, 01:18 PM   #28
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That summary kinda skips the excursion into the 10,000s, doesn't it?
<lol> It sure does.

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I don't know whether we've hit a bottom or not. I will say that all of the euphoria & hysteria over the last six months is pretty amusing considering that market volatility has only been a fraction of the VIX experienced during 2000-2002. How short and corrupted our insitutional memory seems to have become...
Neither do I. My methodology (for better or worse), has been to keep to a "reasonable" asset allocation and then play "market timer", country specific bets, or "macro economic trends" around the fringes, say with 10% (maybe 20% at most) or so of my portfolio, and then only in baby steps. For instance, my %equity was about 67% last April, and I took "bold moves" and moved it all the way down (over a series of months) to 60%. Wow, now that's aggressive. [sarcasm intended.] (Part of that has been my s-l-o-w-l-y getting ready to FIRE. I think I am there, just haven't made that jump.)
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Old 07-19-2008, 01:45 PM   #29
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The metaphor that stands out the most in my mind is Want2Retire's epic "Record Dow! Whee!" post and the subsequent kabuki-theater play of events. Don't blame her for the stock market's reversion-- just appreciate that she managed to call the top, just as others have, but in a particularly eloquent manner.
See, that's the REALLY nice part about being a new mod. All you have to do is shriek out "Whee!", and people say you are eloquent.
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Old 07-19-2008, 01:53 PM   #30
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See, that's the REALLY nice part about being a new mod. All you have to do is shriek out "Whee!", and people say you are eloquent.
Now you need to call the bottom!
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Old 07-19-2008, 01:59 PM   #31
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Now you need to call the bottom!
"Giant Drop in the Dow!!! Doggone It!!"

Like that?
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Old 07-19-2008, 02:20 PM   #32
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"Giant Drop in the Dow!!! Doggone It!!"

Like that?
I have my calender marked!
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Old 07-19-2008, 02:53 PM   #33
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"Giant Drop in the Dow!!! Doggone It!!"

Like that?
You didn't say when!!!

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Old 07-19-2008, 03:04 PM   #34
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You didn't say when!!!

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Old 07-19-2008, 03:05 PM   #35
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You didn't say when!!!

DD
Let's hope it's not Monday.
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Old 07-19-2008, 05:43 PM   #36
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Use of thread titles as a contrarian indicator is a good idea. We should tally up the bearish to bullish threads.

But how should this current one be classified? Neutral?

By the way, I don't mind being called chicken or a market timer. If the market turns around, and goes up, I will feel bad for being a chicken. If it keeps going down, I become a successful market timer. Either scenario is likely, and I still feel OK either way.

I just don't have the "fortitude" to have a higher stock exposure than 50%, being so close to total ER with no pension, and SS is still a decade away. Everybody has a different situation.

PS. If the market really really went down the tube (again, little chance of that), I can cut out extravagant travel, and the cash I have will let me live for 10 years, assuming I can get enough interest to offset inflation. That's when both of us can get SS to continue to live our life in misery. See how conservative I am, having faced business failures in both startups I was involved in.
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Old 07-19-2008, 06:22 PM   #37
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Uncle Mick, my friend, as long as you are still pssst-ing Wellesly and ending your posts with your trademark "heh heh heh", then all is right with the world and I'm not going to panic.


Well, on the other hand, if I use unclemick as the ultimate contrarian indicator, when he stops psst, that's when I would fully deploy my cash to buy every and any stock under the sun.

But unclemick would never stop, would he?
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Old 07-19-2008, 07:34 PM   #38
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Use of thread titles as a contrarian indicator is a good idea. We should tally up the bearish to bullish threads.

But how should this current one be classified? Neutral?
This one would indicate a false bottom, i.e. a bear market trap. :confused:
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