April 18, 2007

Really smart guy at PIMCO sold his house and rents. And tells anyone who'll listen to keep renting during the crash

Don't listen to HP. But do listen to REAL portfolio managers and businessmen like Mark Kiesel at PIMCO (unlike The Incompetent & Corrupt David Lereah). Especially if they graduated from REAL schools like Michigan (vs. the REIC-corrupted Harvard and Wharton)

Kiesel points out that it makes no sense to own today, unless you're a masochist. Just rent (like he does). And down the road, when the blood is in the street, and the fundamentals make sense again, it'll be time to buy again. And for much, much, much lower than today's stupid prices.


One question my friends and colleagues have asked me repeatedly over the past six months is: Are you still renting? Yes!

I sold my house over a year ago and continue to rent. Back in late 2005, I became anxious about my investment in the “American Dream,” after spending a considerable amount of time and effort researching several factors that I felt would influence housing prices.

At the time, I was nervous about housing and ended up selling my house in early 2006 after owning for eight years, and then, upon closing, published For Sale, our U.S. Credit Perspectives, June 2006 publication. A year ago, I suspected housing prices were set to take a sharp turn for the worse and more “For Sale” signs were coming.
Based on the current outlook for housing, I will likely be renting for one to two more years. While many factors that influence housing prices have turned negative, I suspect we have not yet hit bottom. In fact, housing prices should head lower throughout the rest of this year and next year as well.

For renters and potential homebuyers, my advice is to still rent. The housing market has turned for the worse but the unwinding of this bubble will take more time.

Unfortunately, this is not good news for the U.S. economy, job creation or corporate profits. Nevertheless, investors who are patient and adopt a conservative investment strategy should prosper over the next few years.

18 comments:

JimCareyRules said...

Everyone should see the movie 'Fun with Dick and Jane' 2005 with Jim Carey.

Its HILARIOUS =its about a couple that lose thier job at enron type of company and face losing the house then turn to robbing liquour stores, pretty slapstick lighthearted. Foreclosure...weeeeee.

schizoid said...

Another bitter virgin who still lives with his parents. Everyone knows renters are loosers.

Hayley said...

Keith, is that the entire article by MK. My google search turned up nada.

Hayley said...

Isn't it wonderful, Serin's bragging that he owes no taxes for last year. He basically got to live in the US for free - of course he got to drive on the roads, get clean water from the municipal water system, had confidence that the guy selling him gas wasn't screwing with the weights and measures on the pump, had access to a public hospital and emergency services if he and his beloved wife got sick,the list goes on and on....

The only thing I can say is that at least he hasn't had/victimized his children (or us) by taking advantage of a free public education, bus transportation, special education services, etc.

Look around you. Roads, schools, fire fighters, police, courts, water, hospitals, sidewalks, street lights,libraries .....

That's what Carl Rove wants to drown in a bathtub....

And the Dems want to pimp out as hush/guilt money for the unfortunate (read: people who consistently make bad life decisions without consequence).

Maybe it's time to start over...

Anonymous said...

Truth - I love this guy

trapped in AZ no more said...

Just finalized a rental deal yesterdday in Palm Beach county, Fl. 2 yr. lease at $2.700 per month includes landscaping and pool service.In a gated "upscale community,house built in 2004 over 3,900 sq.ft livable under roof, one level home, plus 3 car garage,pool, lake front,custom huge kitchen and the owner is even leaving a massive pool table for our use. (hard to move that stuff).
Thank you HP
Thank you housing bubble
Thank you dumb greedy American sheeple for killing the real estate market.
And most of all,THANK GOG, I'm finally moving out of the Phoenix/Scottsdale AZ. SHITHOLE metro area!!!

anonymous wimp said...

For high end homes in a suburban county south of Baltimore, MD, there is currently a ten month to six year supply of homes in houses valued from $600k to 3Million.

Thank god house prices never go down or the people who have bought the last several years could be screwed.

Anonymous said...

Well OK, but isn't there a conflict of interest here? How's this any different than Lereah saying buy buy buy. Lereah has a vested interest in people buying. This dude has a vested interest in people selling and renting so he is saying sell sell sell and rent rent rent. It's no different than if he were short a stock and was giving advice against buying that stock.

I'm not saying he's wrong, just that he is not impartial and should be looked upon through those glasses. His word shouldn't be taken as gospel just because you happen to agree with him. That would make you a huge hypcorite every time you slam Lereah for doing the exact same thing.

Anonymous said...

"Maybe it's time to start over..."

Agreed- and if you read the Declaration of Independence, it is man's inalienable right.

Anonymous said...

Mark Kiesel has no incentive for people to sell their homes and rent. I am a hedge fund manager who works two buildings over from him. I, too, rent. Orange County will see at least 25% pull backs in price.

Ben Franklin said...

schizoid said...

Another bitter virgin who still lives with his parents. Everyone knows renters are loosers.


Sure, schizoid is a troll, but clearly he's NOT someone who owns rental properties. Probably a flipper caught in the market reversal, a looser (sic) debt owner.

Frankly, this news is good for ANYONE who's in the rental business: telling people to RENT is a blessing for a would-be landlord. The market has been so biased for buying for decades now, even when it didn't make any sense using any standard market indicators, that it's time for the market to cycle back to rental investors and first-time buyers.

Markus Arelius said...

Go Blue!

Anonymous said...

How dare him? Talking truth. This is really something I am not accustomed to.

Anonymous said...

A 17 year secular bear market in housing nickel and dimed to the downside with rising taxes, insurance, maintainence,ect,ect,ect will put the orchards into containers or fall behind

Anonymous said...

Anonymous said...
Mark Kiesel has no incentive for people to sell their homes and rent. I am a hedge fund manager who works two buildings over from him. I, too, rent. Orange County will see at least 25% pull backs in price.


HUH? Who can you say that with a straigh face. Of course he has an incentive for people to sell their home. He sold his home and rented and has been crying CRASH CRASH CRASH ever since. If housing doesn't fall he'll look like an idiot.

As for working two buildings over, good for you. 25% in OC? With the bailout on the way, you're both dreaming.

Frank said...

But if you rent you can't artificially inflate your ego and pretend to be better than renters. And for the ego-oriented homedebtors, the ones in places like Vegas, Scottsdale, and SD, vanity and pretentiousness are far more important than anything.

Apparently being able to say "I own so I'm better than you" is worth going to bankruptcy court over.

Anonymous said...

'Apparently being able to say "I own so I'm better than you" is worth going to bankruptcy court over.'

Most of the homedebtors and trolls here loved the housing bubble because they've spent most of their failed lives yearning for some slight excuse to pretend that they belong anywhere but the bottom of the socioeconomic outhouse. It'll hurt when the world returns to normal, but at least they had their moment.

simisteve said...

15 minutes of Flame ;-)