Is there an investment in the world today more risky than housing?
February 25, 2008
HousingPANIC Stupid Question of the Day
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78 comments:
Sure. There are plenty. Shortly after becoming an accredited investor, I bought into a private placement offering with a company I used to work for (because I know firsthand, having been in management there, that they're solid). But, despite my knowledge of the company, it's still a risky investment. Lots of things can change.
Plenty of already-public stocks are riskier than housing.
The difference, though, is that these risky investments have a HUGE upside if they pan out. Housing on the other hand doesn't have much of an upside.
If your house appreciates, you can't really take advantage and use it to buy a bigger house, because if your house went up, so did all the others in your city.
No benefit there.
If your house appreciates, you can take out home equity loans, but as Suze Orman frequently mentions, they're a scam and you'd be better off taking out credit card debt.
No benefit there.
The only thing that really happens when your house appreciates is your property taxes go up.
No benefit there.
So, in the end, there is no real upside to housing as an investment. When people realize that you're paying for A PLACE TO LIVE and NOT AN "INVESTMENT," maybe things will return to normal.
Gold
Silver
Oil
As crappy as housing may be right now, at least you get to live in it. When metals and oil crash from their current bubble highs, you end up with nothing.
Gold and Euros
Well I've got my money tied up in a new venture, it's the "Mad Mullah" brand bacon factory in downtown Tehran.
The way I see it, and I've done my research here, 63 million people in Iran, not one single bacon factory anywhere to be seen. I'm floating my company "Commodities and securities holdings" on the London stock exchange next Friday, so if anyone wants to get in on the ground floor of this new venture, send a cheque for a minimum of £2000 with the acronym CASH to PO.box 32 London W1 3XJ.
Marriage
One word - Hillary
There is no risk to housing today. Risk means that I MIGHT lose money but housing is a guaranteed loss if I sell within the next 10 years - therefore no risk!!
I'm not sure if 'risky' is the right word. Investopedia says that risk is "The chance that an investment's actual return will be different than expected."
By this definition, I don't believe there is much risk in housing at all. Housing is guaranteed to decline, reverting to well below its long-running historical average price relative to income.
If you expect, as I do, that house and condo prices will decline greatly then there is very little risk at all.
Sure. Donating to Ron Paul's quixotic campaign.
"Is there an investment in the world today more risky than housing?"
Yes there is. Believing in America is the WORST thing anyone anywhere can do. The country is bankrupt financially and more importantly morally.
There is NO WAY OUT.
America is Doomed and Dying.
F*ck You, Mozilo. You should be executed at once.
What about homebuilder stocks and bond insurers.
For some reason I think they will take a beating in the next year or so.
Danny
Anything that requires credit to buy will be a bad investment for the next 2-3 years as we digest the fecal soup that the banks cooked up.
Hey Keith,
Just saw Bill Gross (of PIMCO) in another interview [bnn.ca] still talking about decoupling, government intervention in housing marker (several hundred billion dollars) and monolines being 'saved'etc. Do they ever think about knock on (secondary and tertiary) effects.
Is this guy nuts or willingly delusional?
The amount of real money to bail all of these bastards does not exist on the face of earth. Even all of the governments on the fact of this earth cannot stop this ponzio scheme from unravelling.
I say gold.
Many years ago, my old boss bought gold when it was at peak.
It took several years for him to even break even.
I think investing in pharmacuticals tends to be very risky
Housing is a risk free investment, It will definately go down.
"Is there an investment in the world today more risky than housing?"
Being long on AAPL. Good call, Keith!
As crappy as housing may be right now, at least you get to live in it. When metals and oil crash from their current bubble highs, you end up with nothing.
Really? Gold, silver and oil will be free?
You're a real bright one.
No, housing is most dangerous because of the degree of leverage available
yes sir.. the Euro
Oh, now is a great time to buy. I have friends and relatives who sat out from the housing bubble and now this spring they believe that they will get some good bargains. I have a cousin who bought a house in Bensenville, IL for 550K (a McMansion that is 3000 square feet, four bedrooms, a nice basement, etc...) and the listing price was originally 775K and the final asking price was 639K and they negotiated a deal down to 550K. They think they are getting a good deal, I beg to differ. Just wait around until an average home is selling for what the median wages can afford. Those times are not here yet.
Anonymous America is Doomed said...
"Is there an investment in the world today more risky than housing?"
Yes there is. Believing in America is the WORST thing anyone anywhere can do. The country is bankrupt financially and more importantly morally.
There is NO WAY OUT.
America is Doomed and Dying.
F*ck You, Mozilo. You should be executed at once.
February 25, 2008 2:37 PM
FUCK YOU ASSHOLE!!!!! How dare you say that about America? America is the greatest country in the world and the greatest nation to grace this planet. We have the most freedom and we have the highest standard of living in the world. Oh I know someone will mention Sweden, Denmark, etc.... But they get taxed very high. We don't. America, love it or leave it. I usually don't get this emotional, but when someone criticizes this country I will defend her. I would even die for my country, that is how strong I feel.
.
Being Britney Spears manager!
.
The answer is buying U.S. government debt (also Fannie and Freddie feces). And foreign governments are still slurping it up like a slush puppy. How are we going to get out of our 55 trillion foot hole that's getting deeper every day?
The only way oil, gold, and silver crash, is if the government stops printing money at once and raises rates to 20%. Oil will be $150 within 2 years and gold will peak at $5000-$6000 an ounce within 10 years.
cabbies were giving .com stock tips, strippers were becoming realtors.
i ask 10 random people on the street where they get their gold coins, and every one of them will look at me funny. gold in a bubble? it sure as hell isn't 2/25/08.
qualified investor ratings mean loss of funds gambled, higher taxes mean the foreign banks will not want the properties back unless they "own" the rule making government
Greenbacks, Ralph Nader,
CDO bond insurers, and
Florida beachfront.
............................
Builders are still building houses that were contracted for, with the land bought, and penalties for nonperformance.
The pressure to cut costs beyond the bone must be intense.
So homes built in 2007-2008, on average, might be the worst in
many decades, or longer.
Northern Rock / Citi / other random bank shares?
CDO / CDS ?
Anything denominated in USD?
Internet startups in China?
Spending time listening to anonymous "know it alls" telling me what investment is worse than housing.
I would say that is the worst investment of all.
Risky how? I think there is little risk that it won't be increasing in the next 3-5 years. I give it 90% probability of going down from where we are at today and 10% to remain flat and 0% to increase.
Banking?
FUCK YOU ASSHOLE!!!!! How dare you say that about America? America is the greatest country in the world and the greatest nation to grace this planet. We have the most freedom and we have the highest standard of living in the world. Oh I know someone will mention Sweden, Denmark, etc.... But they get taxed very high. We don't. America, love it or leave it. I usually don't get this emotional, but when someone criticizes this country I will defend her. I would even die for my country, that is how strong I feel...
Are you the shining beacon of freedom on the hill guy? Here is your highest standard of living:
http://tinyurl.com/2terwv
Anything involving Don Lapre (remember his initial "making money" 900-number scam and later his "greatest vitamin in the world" scam?)
Anonymous said:
"FUCK YOU ASSHOLE!!!!! How dare you say that about America? America is the greatest country in the world and the greatest nation to grace this planet. We have the most freedom and we have the highest standard of living in the world... "
Somebody needs to step away from the Kool-Aid punchbowl.
"America, love it or leave it. I usually don't get this emotional, but when someone criticizes this country I will defend her. I would even die for my country, that is how strong I feel."
I'm reminded of the saying which goes, "One man's freedom fighter is another man's terrorist". So, Anonymous, which are you?
denying gold is in a bubble today is like denying housing was in a bubble in 2005.
same arguments:
1. It's different this time.
2. Gold (silver, oil, whatever) is special and will not go down.
3. They don't make any more of the stuff so price can't go down.
Substitute the words gold and r/e and you are making the Gregg Swann argument from 2 years ago.
Housing is not an investmaent its where I live.
Anon (who cares when) said: "How dare you say that about America? America is the greatest country in the world and the greatest nation to grace this planet. We have the most freedom and we have the highest standard of living in the world. Oh I know someone will mention Sweden, Denmark, etc.... But they get taxed very high. We don't. America, love it or leave it. I usually don't get this emotional, but when someone criticizes this country I will defend her. I would even die for my country, that is how strong I feel."
That's odd. I don't see you over in Iraq fighting to keep the middle east American. Hypocrite.
ALL investing is made dangerous by leverage. Leverage can multiply your gains or put you in a hole. The problem with buying single housing units is that nearly everybody needs leverage.
Anyone interested in seeing the exposure....na the truth hurts to much.
http://boombustblog.com/content/view/182/2/
HP calls
Is there an investment in the world today more risky than housing?
=================================
Beach front property in Wisconsin.
"Is there an investment in the world today more risky than housing?"
The Greatest Real Estate Agent in the World says, what do you mean, risky? Housing always goes up... over time.
I agree with several other posters here..... houses are the least risky investment (or non-investment) right now. Isn't there a high degree of certainty which way home prices will move in the next few years? On the other hand, I have no idea where gold and oil will be in a couple of years.
Collateralized Debt Obligations, Mortgage backed securities, Stocks in Bond-insurers, Stocks in mortgage brokers, and
Stocks in Certain banks are more risky than houses.
Unlike these things, land will not go all the way to zero.
30 year treasuries.
I usually don't get this emotional, but when someone criticizes this country I will defend her. I would even die for my country, that is how strong I feel.
You know... your country doesn't exist anymore. If you're forefathers we're alive today, they'd start another revolution to kick out everyone who who is in power now.
America was never about protecting land - it was about defending an ideology of freedom for the common man.
What's ironic is that you would be the first to fight and kill the people who actually created your country. You've become the British redcoat fighting for your slavery. And no one better say a word against the empire!
doesn't risk imply there is an upside?
housing seems to be, for the next few years atleast, all downside
Fuck you, anonymous at 5:29 PM.
Look at you. All emotional, scratching your jock itch, telling no one how much you LOVE America.
What does that have to do with the price of a house on your street?
Nothing. The answer is nothing, zero.
Zero, just like you. Who cares about your emotions? Your wife stopped caring years ago, trust me.
Yes - Buying AAA rated junk bonds from Goldman Sachs is a sure fire loser. At least with housing you can strip the fixtures and the copper to recoup some of your losses.
Dear Mr. Patriot poster:
You're a douchebag and a coward.
Your 'patriotism' is a Bad Joke.
You sound Perfect for the utterly corrupt, materialistic, drugged out obese dishonest America you love so much.
After you fill up your gas guzzling SUV, Have another Beer with your NASCAR you phony loser.
Burp, Belch, Fart. The New National Anthem...
George Washington was RIGHT. The American bird SHOULD BE the turkey, NOT the Eagle...
IMPEACH BUSH NOW
"I would even die for my country,
that is how strong I feel. "
Is this a setup ?
.
Dying is for sissies.
Try living for 60 years with
one eye, one arm, and maybe
half your lower jaw.
Oh, and throw in burns, divorce,
and pathetic aftercare from the VA.
You would die ?
Wow.
Buying GWB's autobiography: "I Did It My Way, And Failed Miserably - Bankrupting The USA In The Process And Bringing The Entire World To The Brink Of Apocalypse"
Risky bets? Short of casinos or horse races, try the broadcast networks and the digital-only transition. I've been carrying out experiments with homebrew UHF antennas and I live only 10 miles from the transmitters.
I live on the "wrong" side of an apartment building (the leeward-of-the-transmitters side) and catching the signals can be a pain in the arse. My antenna rig in my living room is an array with 4 bow-tie antennas in phase feeding two signal booster amplifiers in series - a total of 26dB gain over an unamplified single bowtie. Precipitation does destabilize the signal.
Unless the on-air broadcasters crank up the transmitters 100-fold (20dB) there are going to be a LOT of unserved homes! Estimates vary, but 13 million homes will go dark unless the residents get cable or satellite. Personally, I think that's low-balling it. That means a lot of advertising money lost!
You want a risky investment? Invest in on-air broadcasters. The digital conversion will make Y2K look trivial. Especially since the consumer, not techies must do the remediation - and most people don't know the black art of antenna design.
Any sort of leveraged investment is terribly risky right now, and housing involves the most leverage the average person will ever assume. So in that respect, yeah, housing.
Really? Gold, silver and oil will be free?
You're a real bright one.
If someone leveraged themselves to obtain a large amount (and what else do speculators ever do?) then, yes, it would only take a moderate decline in value to make his own gold, silver and oil worthless to him.
Yes, marriage with kids.
According to the agent trying to get me to buy a house - in PHX no less - his last email states that even though it may seem to good to be true, RE is a great investment right now! AND he goes on to say that any home purchased now in PHX is guaranteed to double in value over the next 10 years.
What exactly do they put in that Ramen stuff anyway???
I would even die for my country, that is how strong I feel.
Please do, we don't want your kind in this country.
I usually don't get this emotional, but when someone criticizes this country I will defend her. I would even die for my country, that is how strong I feel...
Sure, "brave" douche, that's why you play macho only on blogs and behind computers, instead of fighting in Iraq. You're nothing but a sissy girl. Pussy.
Housing is not only the riskiest investment but also the DUMBEST. One of the reasons is that you meet nothing but crooks on every single step of home purchasing: realtors, mortgage officers, bankers, appraisers, inspectors, contractors, etc. And the slimest of them all, Realtwhores. Who in the right mind wants to go through all these crooks and still pay premium for a devaluating asset that nobody knows the right value in the next 10 years? If you want to be a debt slave and a realthwore's bitch, go ahead and buy a home.
Gold and oil will be worth nothing according to ediot.
Exxon will go out of business. Cars will run on water. People will throw gold away like it is trash. Muslims and Jews will become buddies.
Hedge Funds are the riskiest investment out there...
One thing I can say,
They aren't making any more of THEM.
Remember the Million dollar minimum to get into them?
Remember when you could not even get INTO them due to the ultra rich taking all the money?
I think the average hedge fund returned something like a billion percent per year? until they stared letting in the little guy (million dollar minimum)...
Listen for the wailing of the upper middle class when all these hedge funds go to ZERO..
THEY WILL CRY LIKE A SPANKED INFANT!!!
Those statements are coming....
the other trader
America Sucks big time! I cannot wait for it to collapse. Although I must admit I like the idea of the Government giving us all $600.
But really what will $600 buy? Nothing not a dam thing! Still I want to encourage the idea. I would also like to get to the point they did in Rome at the end you know 200+ holidays and feasts. All I have to say is the Government had better start pacifying me or it is going to get ugly fast.
Burn Baby Burn
Ed,
I would like to take this opportunity today to say yes sir, you are an idiot.
That troll really got the dailykooks in a bubbly froth. I bet it was one of their fellow kooks with a sarcastic post
To Ed:
"3. They don't make any more of the stuff so price can't go down."
Guess what? This is actually a true statement for gold. The planetary reserves are known to be dwindling and mineable gold will be depleted at some point. How far in the future is not known, but it is a concern. Thereafter the total amount of worldwide gold will be fixed or declining due to industrial uses.
You might want to have some idea of what the hell you are talking about before opening your big mouth.
Send me $500 and you'll find out... =)
Quote:
#####
FUCK YOU ASSHOLE!!!!! How dare you say that about America? America is the greatest country in the world and the greatest nation to grace this planet. We have the most freedom and we have the highest standard of living in the world. Oh I know someone will mention Sweden, Denmark, etc.... But they get taxed very high. We don't. America, love it or leave it. I usually don't get this emotional, but when someone criticizes this country I will defend her. I would even die for my country, that is how strong I feel...
#####
This nation and most of its citizens, residents, dwellers have no ethic, no moral, no responsibility. What it has in plenty is greed, self-centerness, ignorance, pompousness.
The housing bubble is a shiny mirror in which the Americano can look at itself and ponder upon what may the future brings upon this land of the Snapper Turtle.
A nation that mostly comprises of pigs feeding, tearing, roosting, chomping at the trough.
A nation with most of its dwellers obese, fat, diabetic, and plain ugly like a chimpanzee.
A nation where a Walmart cashier can buy a house for $500K.
A nation in which its citizen's brain IQ is lower than a snapper turtle.
A nation which rules by turkey and skunk.
The Americano nation is as toasted as a roasted armadillo skewered from mouth to ass sizzling, popping, oozing with melted golden fat over a bed of white hot charcoal.
" Anonymous said...
Gold and oil will be worth nothing according to ediot."
Dude you need to relax. Re-read my post, maybe 3 or 4 times and you might understand what I said.
Now don't you have an Obamagasm to take care of?
Not making any more gold, just like they're not making any more land. Buy gold now before you are priced out. Hmmm where have I heard that before? Oh yea buy real estate now before you get priced out. Oh but it's different this time I forgot.
Yes....
CHINA!!!
600 buys me 4 months of food eaten frugaly
It's a shame that so many people on this message board are anti-American. I am a patriotic American fundamentalist Christian. I truly believe that America is a special country and God has special plans for us. I shouldn't have lost my cool and got too emotional. I strongly believe that America is a force for good in this world. If you disagree, then fine, but don't say things like: coward, douche bag, idiot, ass hole, etc... because I am none of those. I am a strong believer that America wants to help others around the world and we are a beacon of freedom, a shiny city on top of a hill. P.S. if you have nothing positive to say, then keep it to yourself.
4 Months of food for $1,000 (frugally) will soon be a wish.......
Find Mr. Bill, take spot, and do to "it" what some people here think turtles are good for. Nice white heat.
Bye, Spot, Bye!!!!
I am a strong believer that America wants to help others around the world and we are a beacon of freedom, a shiny city on top of a hill.
Bwahahahaha...you should be a comedian. What a dumba$$. Is that the new crowd hanging around here now, Keith?
FUCK YOU ASSHOLE!!!!! How dare you say that about America?
Ladies & gentlemen, here's your typical American Christian, "conservative with values". When they're not doing gay porn at public bathrooms around the country or involved with corruption, they're cursing more than a crack whore.
"I am a strong believer that America wants to help others around the world and we are a beacon of freedom, a shiny city on top of a hill."
Dude, the 'City on the Hill' is Boston, the center for Unitarianism, Christian Science, and other non-mainstream ideas of the 19th century. The days of the "Scarlett Letter" are over.
You're talking about backwater locales like Birmingham and Baton Rouge.
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