October 05, 2006
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A time capsule of the greatest financial mania in the history of mankind, told in real-time by regular folks and patriots. May future generations better understand the madness of crowds, and how power and money corrupt.
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42 comments:
sucking the sheeple in for the slaughter
Keith,
Did you see the nice graphic showing % ownership at 69.1% with 26% of the population below poverty level?
Can we infer that there is almost no room to sell to people now renting?
does 26% population = 26% households?
if so less than 5% left of households to buy houses. I know it is not perfectly logical but I had no idea that that many were in poverty.
Classic sucker's rally.
When the Dow goes back below 8K within the next couple years, nobody is going to want to invest in stocks anymore, having been duped again.
If you made out in the hosuing bubble flipping houses, they want to take it from you by giving the appearance of a bull market in stocks. The lambs will file into the Wall Street slaughterhouse and come out with their bones picked clean.
meet the new boss, same as the old boss
Pete Townshend
I'm jealous of people who have the time and energy to babysit their freaking stock and mutual fund portfolio. More power to you.
Can I hire you to watch my investments too?
So far the brokers I know seem all too kean to get you on board the train, but keep forgetting to tell you when to get off before the massive derailment.
the upturn in the DOW & NAS is strictly related to the downturn in housing, IMHO. the money has to go somewhere, despite the fact that all fundamentals point to slowing US economy and possible recession.
still sitting in cash here.
So Keith.....how bout a solid reco to short stocks then?
Something like "on 10/06, I am buying 10k of DJIA put options".
or
Something like "on 10/06, I am buying 10k of DJIA call options".
Something.....anything....
Didn't think so.
cash.
Johnny Cash!
Nope. Puts on builders.
All was well with this New Jersey builder and then 30 days later, bankruptcy. Buy the Jan 2008 or Jan 2009 homebuilder puts.
NOTE THE DATES:
09/10/06
"At Kara Homes, we've just completed the two most profitable quarters in the
history of our company," Karagjozi said. "We've taken advantage of this
temporary lull to reevaluate our business plan, streamline our operation and
prepare for the market recovery which some experts are predicting will begin
either later this year or in the first part of 2007."
http://www.ocobserver.com/apps/pbcs.dll/article?AID=2006609100347
10/5/06
EAST BRUNSWICK: Kara Homes, Inc. one of the state's largest private home
builders of condominiums and active-adult communities, is anticipating filing
for bankruptcy.
http://www.thnt.com/apps/pbcs.dll/article?AID=/20061005/NEWS/61005001
Cash is for those who say they want to put a stake in the sand but don't have the strength to drive the stick in.
People sit on the sidelines and hold cash when they are afraid, unsure, don't know the $%#( what will happen, waiting to see which way the wind blows. If the signs said, "Hurricane Katrina headed toward NO" do you think the smart folks just sit on their roofs and say, "We'll wait to see what happens before we move?" If you know the housing market will crash, sell. If you know the housing market is going up, buy. If you know that certain stocks are going to take a crap, short, sell, or whatever.
What happened to Keith's recommendations to buy gold?
smart military leaders gather their forces and wait for the right moment to attack
that moment is coming
patience
deflation confuses everything by the way - including gold
Markus Aurelius:
Brokers don't know anything about the economy. Even if they did know something about the economy, it would not do much good since they cannot predict the future anymore than anyone else did.
If you don't make the future, how can you have any ability to make predictions? You can only predict your own actions only so far, since conditions change and so do your plans.
It was either Peter Lynch or Warren Buffet who said something like this, "If you spend 10 minutes per year trying to predict the market (or future, I don't remember which), then you've wasted 8 minutes of your life.
All you can do is just buy things that are good values, like silver at 5-7 dollars an ounce or stocks when they throw off good yields and wait to be rewarded. Different asset classes have their day in the sun at different times. Buy them cheap and don't expect "professionals" to look after your best interest. Especially financial professionals.
There is no "smart money" or "dumb money" anymore, it's all "other people's money". Bonus time again!
I can only imagine how much money Keith has lost in the past year....
"deflation confuses everything by the way - including gold"
Keith, I'll be ice skating in hell long before deflation ever takes hold in the west!!
Well said bake.....stock pickers and market timers are only fooling themselves if they think they can beat the market.
cant get a quote on sheeple or politicans
smart money: that which you have
dumb money: the money you owe on materialistic crap!
Can someone vouch for the authenticity of the data? I have never seen anything like this before, with a breakdown of option interest among different "types" of owners.
Any pointers?
If someone had taken $1000 in 1971, bought 30 oz of Gold, held until 1980 and sold those 30 oz for $24,000, then promptly bought 24 shares of the Dow Jones Index, held until 2000 and sold those 24 shares for $240,000, then promptly bought 800 oz of Gold, they would now have a nice little nest egg of $480,000.
Not bad for a total of 5 trades.
Makes all those active traders out there seem a little silly, no?
The Fed was formed in 1913, since then it has devalued the US dollar 94%. While the Fed deflates the dollar, it inflates other stuff.
From 1913 until 1929 it was paper assets (stocks, bonds), from 1929-1945 it was hard assets (real estate, commodities), from 1945-1965 it was paper assets, from 1965-1981 it was hard assets, from 1981-2000 it was paper assets, and from 2000-approx 2016 it's hard assets again.
Investing is as simple as choosing paper or plastic at the grocery store. Choose the right asset class, paper or hard, hold it until it's time to switch. We've got about 10 years left in the current cycle.
Notice, the US$ is not a part of either of those asset classes.
And yes, we are seeing real estate crash in the midst of a hard asset cycle. But in 1987, stocks and bonds were in the midst of a paper asset cycle, too, and as I remember, they had a nice little crash of their own.
Deflation? To quote the elder Bush...na...ga..hapn.
so tabasco jenkins, say I have $15,000 lying around in cash ..where would you be dumping that when deflation hit's or do i stay cash.
thank you
Anybody who is seriously paying attention knows that we are in the opening stages of a nasty slowdown. If someone says different they very likely have an agenda.
Can't buy options in RothIRA. Thinking about this:
http://www.profitspi.com/stock-chart.aspx?id=DOG&ca=1175033462
borkafatty,
Deflation isn't going to happen.
If I had 15K laying around, I'd dollar cost average it into some nice hard assets that have already corrected like gold, oil, or silver. All 3 are down at least 20% off their last peaks. They may correct further, but trying to time a bottom is tough. They are alot closer to a bottom than real estate, though. Dollar cost average, buy a little bit every week or every month for the near future. Don't leverage yourself too much. Hold for 5-10 years. Then shift to stocks and bonds. Rinse, repeat.
Tobasco,
You the man. I would just add Ted
Butler's comments re silver. This
on top of the existing trend.
-Maha
tabasco jenkins
thank you sir I already have a vast colletion of Silver, as I am a coin colletor also, but thank you very much for the input it is much apreciated.
I buy here if there are any folks interested, never had any problems as far as transaction go smooth.
http://apmex.com/
Tobasco, If you invested in a single family home in many cities in calif. 1971, your $1000 would be worth 450,000 plus all the tax benefits and monthly cash flow of 1500 per month. House would have been paid off in twenty years because average rents have risen 4% per year since 1971. Tax deferred exchange into 4 plex throwing off $2200 per month net. No Debt. Your 5 trades would I assume have transaction costs and capital gains tax. Real estate clearly outperformed.
Anon, Friday, October 06, 2006 2:02:06 PM
Citing some cities in California as an example is not very good evidence to support your thesis that the entire asset class of real estate has "clearly outperformed". That's like saying because Microsoft is up a gazillion percent since it went public that stocks clearly outperformed. It's anecdotal. What if you had bought a single family home in Buffalo, NY...or Grand Rapids, MI?
The fact is, one asset class will never clearly outperform another by that much over a 35-40 year stretch because their inflation is in the end all based on dollar deflation and GDP increase. However, due to generational shifts in investment views, paper assets and hard assets have tended to alternate in outperforming each other in 15-20 year cycles.
If you had bought real estate in 1981 and held until 2000, you wouldn't have fared very well compared to inflation. But if you had bought an index of stocks in 1981 and held until 2000 you would have achieved at least a 1000% return. And vice versa for 1965-1981 (real estate, commodities outperformed) on down the line from 1945-1965 (stocks, bonds outperformed), 1929-1945 (real estate, commodities outperformed) until the first cycle after the Fed was created 1913-1929 (stocks, bonds outperformed).
The rally on Wall Street is cash coming in from oil, gold, silver, housing, etc.
If you listen closely enough you can hear the sheeple increasing their 401K witholdings since they're filling richer these days.
It still might be worthwhile to buy into this rally until the end of October, but I'd definitely sell before elections when the Dems gain control of the House and Senate.
Source
Let's take a look at the out of the money option bets on the Diamonds, the ETF that tracks the Dow Jones Industrial Average. Why use the out of the money numbers? Because that's where the criminals would make the most money on an October surprise.
From today's option action on DIAMONDS Trust, Series 1 (DIA):
Open Interest in Out of the Money PUT OPTIONS, Expire at Close Fri, Oct 20, 2006:
189295
Open Interest in Out of the Money CALL OPTIONS, Expire at Close Fri, Oct 20, 2006:
15842
189295 puts / 15842 calls = 11.95 times more puts vs. calls.
So, on this historic day, with the triumphant Dow "soaring" to a glorious, record high, the amount of money being placed on very speculative bets that the Dow is going to decline substantially by October 20 is nearly 12 times the amount of money being bet that the Dow will rise substantially by October 20.
tobasco, I did buy in 1981. 15,000 down 145,000 price, sold in 2004 for 850,000. refinanced out my 15,000 investment in 1991. Zero investment since 1991. Positive cash flow since day one. What is my rate of return? infinity?
Anonymous, Friday, October 06, 2006 4:15:16 PM
I said "If you had bought in 1981 and held until 2000".
You sold in 2004.
What could you have sold it for in 2000? What was your rate of return from 1981-2000 compared to 2000-2004?
If you don't see the difference, you're missing my point.
1981-2000 was not a good time period to hold hard assets like real estate and commodities. 2000-2004 was.
Yep he is the guy the poor little sucker---
I am the one who popped his wife.
Sent her to the abortion clinic.
Dumped her on her ass.
Flipped houses to her and hubby.
Banged his wife for fun when he lost the house.
Kept money in cash got the 20 year old beautiful wife.
Tobasco, could have sold it for approximately 500K. Still had nothing invested, zero. I ultimately exchanged that property into 8 apartment units netting 3200 per month. Free and clear. You evidently have never studied real estate investment. I have been investing and exchanging for 30 years. I have never paid a capital gain tax using IRC 1031. I learned a long time ago that if I could borrow 1,000,000. and have tenants pay it off for me I would end up with the underlying asset yielding cash flow for as long as I maintained (using tenants money)the property. These properties can be handed down through the generations if the government doesn't change the laws to drastically. I started investing with 10,000 in borrowed money and I am now retired at 51 with a mid six figure income. Leverage (secured loans)if used wisely and paid for by someone else can be extremely profitable. I cannot give you all the details in this forum but I have tried to give you some general idea about the potential of investing in income producing real estate. Yes even investors in Buffalo can make money in real estate. Buy when interest rates are high and exchange up when interest rates decline. Invest in economies that have long term job opportunities (i.e. agricultural and state capital cities). Pay down the debt as soon as possible. Look at the rents for a 2 bedroom apartment in 1981 vs 2000. Research the value of four unit apartment complexes in 1981 and 2000. Then perform an investment analysis assuming you bought in 1981 with 20% down and 12 % interest ( I think 12% was going rate then but not positive)use your own city as a test case. I would be interested in your findings. Worst case, your four plex would be paid off if cash flow from incresed rents over the years was used to pay down the mortgage. Sorry this is not more definitive but It would take a few hundred pages to explain everything I've experienced as a real estate investor.
zillons on borrowed money, yet the bank only nickel and dimes you and your hard assets? whats the zink in the saved penny worth as a commodity, like gold and silver? if its all manipulated, why not monkey the price of zink
sheep, monkeys dogies, fish and turkeys, and tomatoes at 2.99 a pound
anonymous Saturday, October 07, 2006 4:30:19 AM
You bought a place for 150K in 1981 that had above average appreciation until 2000, but then lagged the market until 2004?
Baloney.
You were cash flow positive in 1981 with double digit interest rates and after real estate values had boomed in the late 70's?
Double Baloney.
Please take your lies to another forum with some people who are much more gullible.
Tobasco, Sad that you had to stoop to that level to justify your opinion. There are an infinite number of ways to grow capital. Your theories may create prosperity. And mine have worked for me. But to close your mind to new opportunities that exist limits your horizons. I have purchased and exchanged approximately 65 properties over the years and I am trying to share the information so others may benefit. If you choose another path after learning of the possibilities with real estate investing fine. But you first have to open your mind to the fact that maybe someone knows more than you about certain business opportunities. I wish you the best of success. No hard feelings just a difference of opinion.
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