Doesn't it feel kinda contrarian (and nuts) to go out and buy up a bunch of beaten-down stocks and houses today?
June 29, 2008
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36 comments:
Yes and yes
It is possible to profit in a down market. You need to have the energy to properly research your investments, however. There are some way oversold stocks out there. And yes, there are some nice neighborhoods where the rent vs own ratio for houses makes it potentially cheaper to own.
Why would you buy at the top?
You want to see the next millionaires and billionaires being made? Watch the next 2-4 years in real estate. The smartest, contrarian investors are going to buy up RE at pennies on the dollar.
Why does contrarian investing work? Because when the masses all move in one direction, the richest investors move in the opposite.
See: tech bubble/burst...real estate bubble/burst...commodities bubble...hmm...
Not yet, both are still expensive.
Would you commit to an huge expense without knowing for certain if you're going to have a job next quarter? These are current headlines:
* Siemens to cut 17,200 jobs
* Unemployment on the Rise throughout the Peach State
* Triangle unemployment jumps to highest levels in three years
* Unusual jump in Illinois unemployment causes worry
* Florida Unemployment At Highest Rate Since Early 2003
* California's May unemployment rate was the fifth-highest in the nation, behind Michigan, Rhode Island, Alaska and Mississippi
* Nevada Unemployment Surges to 6.2-percent in May
* United to lay off 950 pilots
Buh buh it just happens to others, right? Right?
Both have farther to fall, houses especially, but there are good deals to be had if you look hard enough I'm sure...
It's the P/E stupid, don't forget...
Both have farther to fall, houses especially, but there are good deals to be had if you look hard enough I'm sure...
It's the P/E stupid, don't forget...
Hmmm...and P/B and Dividend Yield. By those metrics, it's still hard to find good deals. But I can't complain; been getting a 16% return during the meltdown.
Houses - massive inventories and people can't get loans to buy.
Stocks - declining profits and people don't have cash to invest
Silver bullets
- a wall of money being created by the oil bubble. Watch for the arabs and russians to swoop in and buy up the US's distressed assets soon
- massive government intervention
- More fed tricks
Fuel for the fire
- Oil hits $200
- Layoffs
- Iran attack
- Assassination
- Terrorist attack
- Big bank failure
Lets see: In order to get rich buying real estate for pennies on the dollar?
Step 1: Prices need to go back to "normal" trend. Say 250K for a California home listed at 700K.
Step 2: Offer 70K for the 250K prices home?
Good Luck with that! HA HA HA HA.
Speculator Retard Types Never Learn, Do They?
Stocks other than financials, yes.
However, "they" will bring the Dow back up to 12800 and then ratchet it back down to below 11000. They will continue with the lower highs and lower lows until 9500-10000. So, yes, you can buy, but you also need to sell at the right time as well.
Houses, not a chance.
What could make stocks unattractive even at these levels?
The magic 8 ball says... Big bank failures.
Keith
Don't start dipping your toe in piranha invested waters except as a quick trade. There is not enough fear out there yet(see the Vix)
For a quick trade,buy some spider call options.
WWW
The stocks are ready for some kind of relief rally . . . the fuel is there, just waiting for the fuse. The housing market, right now? No. It's had to sell a house for a quick in-and-out trade.
It's the P/E stupid, don't forget...
It's more than just the P/E Keith. Homebuilders had miniscule P/E even though housing was falling off a cliff. Forward looking earnings are also important. If this was so easy, none of us would be here blogging.
There is absolutely no point in buying distressed assets at this point in time. The great deals will be had in the future, not now. Let the idiots buy now. I will wait to buy a house and to get back in the stock market. It is a no-brainer.
Good question... very good. As usual.
But are you itching for the Bull, again?
IMHO - you're barking up the wrong tree.
Wait/Watch a little.
Eventually it will be back. But not now...
The fireworks ain't over yet. We haven't even seen the finale.
Your money - your choice.
YFN Sandman
I thought you said you weren't gonna talk about stocks on here after your screaming buy recommendation a few weeks ago when the DOW was at 12,800
I'm buying all the BAC below $30, and C below $20, that I can get my hands on the next few years. I have no idea what the bottom is, none whatsoever.
I never thought Congress would pass the $300B bailout, but from what I read, it is all but done, w/ a guaranteed veto override. It minimizes the lender's loss to 15%. Best of luck to all investors, and for the love of God, never, I mean never... listen to me.
U.S. stocks are still way too expensive. Call me when they drop 50%. If they drop 50%, the S&P 500 won't be cheap, but it won't be bad.
The P/E of the Russell 2000 is like 80 now.
"The smartest, contrarian investors are going to buy up RE at pennies on the dollar."
LOL!
The market tends to crash on Thursday and Friday more frequently.
It will probably rally by 20-80 points on a Monday. This will not be based on anything....just cause the fed feels like it.
Crap is crap no matter if it is cheap or expensive.
Contrived indices like the Dow suck. Energy stocks, commodities, green, nuclear, energy services, foreign utilities, foreign infrastructure, russia, I could go on...
Do your research. Think about what $140 oil means
And if anyone sees any house or condo in America that you could buy today and get positive cash flow on the rent, post it here. There's got to be one house out there where the fundamentals make sense, right? Just one?
No.
DOPES!!!
On a lighter note, have you seen this sh*t?
www.youtube.com/watch?v=4-dHl0c9S98
For stocks the answer is HELL YES! I have been buying up stocks like crazy. Yeah I might not buy at the absolute bottom, but anyone who thinks they can time a bottom is fooling themselves. Last year around this time I was selling. I missed the top by a little, but oh well, I still came out well ahead. Same thing on the down side. What I bought last week could well go down 5-10%. But long term I'm sure I will be very happy with what I've bought.
For housing...the answer for me is almost yes. While I'm not ready to go out and buy just yet, I am a lot closer to that point than I have been since any time in the past 3 years. It does look as if the feds are hell bent on propping up housing prices. If that's the case, I won't fight them, but line up at the trough and get every penny I can myself.
Qweefie,
You want a true contrarian investment...short oil.
Rewatch Serin Video said...
"The smartest, contrarian investors are going to buy up RE at pennies on the dollar."
LOL!
============================
My great grandfather and his brothers and sisters did exactly that during the Great Depression. They never trusted banks thanks to a major bank failure in the late 1800's, and really did have the cash to buy at "pennies on the dollar."
However, I don't see this happening this time. Even if GW vetoes the BBBB (Big Banking Bailout Bill) it will eventually pass with some modifications or a veto override! It's an election year, and the PTB are going to intervene, to death and beyond, to prop up the artificially high housing prices.
Also, during the Depression, we had DEFLATION, instead of the roaring INFLATION we have now. If you had cash (actually backed with gold back then!) it was worth more during the Depression than either before or since.
as we're like 8 years from the bottom, it'd be cool if we could short sell this crap into IRA's.
anyone with ideas on how to structure that?
not at all. If 15 years ago someone suggested that you go out and buy up U.S. Steel and Peabody Coal and railroad stocks, some might have said "you're nuts" but what was old is new again as indicated by the demand for what those types of companies deliver to the marketplace.
Smug Bastard
Bushco - Cheneyburton 4th of July patriotic attack of Iran.
Bet on it.
Goodnight and Goodluck.
America is DEAD
Anon June 29, 2008 11:41 PM:
Your Googling is one-sided. Try "adding jobs".
'Buh-buh-buh, I can keep my telegraph operator's job forever. Right? Right?'
Watch for phony-PPT-induced rally before the holiday. Then back to nosediving.
Have I ever failed you guys? I'm the "Attention, attention! Calling all morons" dude.
I'm going to make simple for all of you. Look at this graph,
http://tinyurl.com/6p2nx4
especially how far down it went after the tech bubble burst in 2000. In the past few years, we went through a much bigger bubble and look how much down the S&P still has to go, when compared to the tech bubble period.
No only that, now we have high inflation, credit market is shot, financials are a mess, mass unemployment, skyrocketing energy and commodity prices all over the world. Things are much worse now but the graph shows that everything is still way up, far away from the bottom. We're not even half-way through.
WHAT WOULD MAKE 70,000 ATTRACTIVE ENOUGH TO BUY THAT 700,000 APPRAISED ONCE HOUSE?
Why is it that the nicer neighborhoods (say La Jolla, Del Mar, Coronado in San Diego) have not gotten price punished? Do they have a sustainable price bottom or will they too experience retracings? And when?
Real estate, banks, airlines...these are some of the contrarian plays we've covered recently, including today's financial musings...
http://www.contrarianprofits.com/articles/bank-stocks-good-bet-or-big-gamble/4233
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