January 22, 2006

Question for HP readers: Anyone catching a falling knife?


Anyone tempted to buy stocks Monday morning at the new lower prices (btw where is "the banker" now that stocks have collapsed?)

Anyone tempted to put low-ball offers in on houses?

41 comments:

Anonymous said...

Hell, I can barely afford to go to the store. Grab your ankles America, it's a looong way down.

the_banker said...

I'm doing just fine, thank you. In Dec, I increased my positions in the Housing Panic portfolio (the one where I do the opposite of what this blog reader picks), and I am ahead in 4 of the 5 stocks. The Housing Panic index is still down 1% since inception (meaning I am up 1%). Thanks to Housing Panic, this has allowed me to stay at even for the year (my brethren round here are getting killed though).

I am a little worried though......the condo unit next to mine sold last week for 1.3MM......that is just a little more than what mine was appraised 6 months ago.......I might have to raise the rent on my rental property to get some additional income.

Anonymous said...

O BABY WHAT I COULDN'T DO WITH PLENTY OF MONEY AND YOU!!!!

Just where WILL the cute crowd squeeze the bucks from this time??? The MIDDLE class is tapped out with mega credit card debt and mega mortgage debt........ Just where are the money pits? Pensions? Social Security? Retirement Homes?

And just as those 2000 stockmarket memories fade.... FRIDAY had to come.... BUT YOU KNOW WHAT THEY WILL SAY!!!!!


ITS A BUYING OPPORTUNITY!!!!
[B]So MR. Franklin Roosevelt says NOWS THE TIME TO BUY! SO LETS HAVE ANOTHER CUP OF COFFEE,and LETS HAVE ANOTHER PIECE OF PIE!/[B]

Those old depression era songs really play well today!

Anonymous said...

hey the_banker -

Why aren't you charging market rate already? Anyway, the rental market is finally improving (at least in sf), but no way can you cover the mortgate at current prices by renting out the unit.

Think about it - even with the uptick, you can rent a 2br house in sf for, say 2500/mo (that's a pretty bad deal for the renter, but I want to make the numbers look good for a buyer). $2500/month buys about a $400K house - and that's assuming you put down 80K. There is a tax write-off that improvest his somewhat... but keep in mind that the 2br house that rents for $2500 probably sells for closer to 800-900K. You're bleeding money, figuring that the market will keep going up. Hey, if it works, then hats off to you. Personally, I'd look for other investment opportunities by this point (unlike Keith, I'm willing to go with stocks - all that housing money has to go somewhere).

Anonymous said...

Heck, I'm living in Pasadena, CA in a 2 br older Spanish style apartment complex. Gated, 1200 sq ft, pool, koi pond and hot water included - $1250! Houses of similar size around me are $600k to $800k.

I'll take that $2000k per month I'm saving by not buying put it into the stock market and keep taking some fat surf vacations. Why anyone would buy at the top of this market is beyond me.

Out at the peak said...

I tell my dad to not look at RE right now, but he has been looking at vacant lots for about a year now. None of them have impressed him.

Tomorrow he is going to look at 20 acres. If he likes it, then he will make a "dirt" offer.

Bake McBride said...

I don't worry about the day to day fluctuation in the stock market....Just make sure you're diversified and consistant in buying...Made 14.8% last year.

The housing market is another issue....To jump in now is insane. The fundamentals just aren't there....

Anonymous said...

You think the BIG bubble is just in California or Florida.... Try dinkly little Twin Lakes, Wisconsin where the average lake front home has gone from $400,000 just 4 years ago to $1,200,000 today. Now those lovely Wisconsin RE taxes on that 1.2 home are .....$38,000! All you Arizona, California, and Florida people think about the joy of those kind of taxes!!!!! But when you are focusing on mortgage payment, who cares about the taxes!

urbania said...

No way am I touching the stock market Monday..Existing Home sales come out wed Jan 25, and new Home sales Jan 27. It should not be pretty..Im sure in some areas existing inventory is going to hit a 6 month supply or better. Ouch!

Dogcrap Green said...

I think Monday is a great time to buy. Of course though I was fully back in housing by Wendsday's close

Anonymous said...

I think the banker guy is full of crap. I've been doing the opposite of this blog too but just paper trades and it's been a losing proposition.

keith said...

COP re-approaching an all time high, homebuilder stocks crashing again last week, down 50% from their highs, and people say this blogs stock recommendations haven't panned out?

Laughable.

Check back in a year too, Mr. Banker. We'll be interested to hear about the Chapter 11 process.

Dogcrap Green said...

Kieth in all fairness using onepoint as your entry point and another point as your point of reference is just wrong.

I'm up a few percent from my point of entry, but you don't see me using last years low to pond the table saying I'm blowing out the S&P.

You did not tell people to short at the top. You told them to short at a point lower than today.


by the way, how is London? Are you having a hard time getting drunk with the beer bubble?

keith said...

dogcrap - couldn't agree more. My point is the folks who were shooting their mouth off a january 8 are looking like fools on january 22.

however, i believe my picks are sound long term - builders in trouble, lenders in trouble, fannie in trouble, and oil stocks golden

london's been great so far - sunny and a bit chilly. looking for a flat full time for five days - the most inefficient system you could imagine - retail storefronts of listing agents, with signs in the windows for flats to rent. they don't share listings, they charge up to 400 pounds if you go through them.

just waiting for disintermediation - no reason homeowners have to go through these guys - just need one website for direct owner/renter contact. their systems keeps rents high though

tipped back some guiness and watched the steelers trounce denver at a local pub, but not gonna make it up for the car/sea game.

Dogcrap Green said...

some guiness, as in more than one? you must be rich. Or did forget which direction the currency exchange goes?

Wes D said...

I'm not in the market to buy right now, and wouldn't buy in the next 24-36 months. Winning a lowball bid now just means that I'm 20% overvalued instead of 33%.

Another complex down the road just went to condo. So the local condo idiot owners now have another 1100 units of competition. This is going to get ugly very quickly.

Anonymous said...

Last anon.....if you want to make some money, check out Keith's stock picks since 11/23/05 (when he put his stock picks on the line).....if you do the opposite, you will be in the money.

Dave in CA said...

If something falls to a point where it cashflows with prevailing fixed rates I would be tempted to buy. In California nothing is close to that yet, but the number of distressed properties in my area has begun skyrocketing in the past four months, so I expect there will start to be opportunities in 2007.

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