Beginning of the end?

n=e9bc032df8f4ec49&ei=5094&partner=homepage

So, anybody shorting REITs and housing stocks? I sold mine at the end of
2002 when the price started dipping, but this one could be real. But,
apparently, less educated are still clamoring while the savy are getting
out. While the stock bubble affected more affluent people, I think the
housing bubble will have devastating effect on middle/working class who
jumped in while hot.


htm

htm

Re: Beginning of the end?

"TK Sung" <> wrote
>

> n=e9bc032df8f4ec49&ei=5094&partner=homepage
>
> So, anybody shorting REITs and housing stocks?

Not non-mortgage based REITs, no.

Mortgage based REITs are a concern because of the effects of interest rate
rises. Which of course do tie into lower home prices yada.

> I sold mine at the end of
> 2002 when the price started dipping, but this one could be real. But,
> apparently, less educated are still clamoring while the savy are getting
> out. While the stock bubble affected more affluent people, I think the
> housing bubble will have devastating effect on middle/working class who
> jumped in while hot.

It will have an effect, but only on the few bubble areas (mostly coastal),
and it won't be devastating. I suspect middle/working class people don't buy
houses with the intent of moving in a few years.

Re: Beginning of the end?

"Elle" <> wrote in message
news:lmx0f.6328$
>
> It will have an effect, but only on the few bubble areas (mostly coastal),
> and it won't be devastating.
>
Tho, coast is where most people live. And rent/price ratio in most metro
areas, coastal or not, are out of whack.

> I suspect middle/working class people don't buy
> houses with the intent of moving in a few years.
>
Interestingly enough, I suspect entry levelers move more often than
mcMansionites. In any event, there will be a tremendous pressure to
sell/foreclose if/when the payment baloons and price drops. Large portion
of mortgages are variable and/or interest only.

Re: Beginning of the end?

TK Sung wrote:
>
> n=e9bc032df8f4ec49&ei=5094&partner=homepage
>
> So, anybody shorting REITs and housing stocks? I sold mine at the end of
> 2002 when the price started dipping, but this one could be real.


I have two shorts FRE and ICF, started last week. FRE short is doing
well and ICF is about even. Waiting for a re-enntry point for XLE.

Kaspa

Re: Beginning of the end?

"TK Sung" <> wrote
snip stuff thrown into the fray whose validity I don't know but one can
check
> Interestingly enough, I suspect entry levelers move more often than
> mcMansionites. In any event, there will be a tremendous pressure to
> sell/foreclose if/when the payment baloons and price drops. Large portion
> of mortgages are variable and/or interest only.

Yes, this is a concern of mine, too. Way too much credit out there.

I cashed out of my S&P 500 index mutual fund position on Sept. 9. My
previously mentioned concerns about a major stock market correction remain,
with Katrina and all this darned credit, and interest rates rising to stem
inflation. So here I am timing a part of my stock allocation. David W. will
be happy. I'm not sweating with a 3+% money market rate.

Re: Beginning of the end?

Elle wrote:
> "TK Sung" <> wrote
> snip stuff thrown into the fray whose validity I don't know but one can
> check
>
>> Interestingly enough, I suspect entry levelers move more often than
>>mcMansionites. In any event, there will be a tremendous pressure to
>>sell/foreclose if/when the payment baloons and price drops. Large portion
>>of mortgages are variable and/or interest only.
>
>
> Yes, this is a concern of mine, too. Way too much credit out there.
>
> I cashed out of my S&P 500 index mutual fund position on Sept. 9. My
> previously mentioned concerns about a major stock market correction remain,
> with Katrina and all this darned credit, and interest rates rising to stem
> inflation. So here I am timing a part of my stock allocation. David W. will
> be happy. I'm not sweating with a 3+% money market rate.
>
>
I will be happier still if you time the rest of your investments as
well. While B&H is the optimum strategy in a bull market it can
seriously damage your wealth when the market falls. Let's face it, the
main B&H protagonists are the fund company managers like Bogle, who have
a vested interest in investors remaining invested to keep their fees
rolling in, and the academics who have been on a collective EMH/CAPM
bandwagon for so long they can't admit it has only three wheels.

Even the supposed B&H fan Jeremy (Stocks for the long run) Siegel shows
that a simple 200-day MA timing rule equals B&H for the S&P500 and beats
it by miles for the Nasdaq. For the S&P500, timing would have won as
well instead of drawing except for the whipsaws in year 2000. As he
says, timing is much easier on the nerves as it would have kept the
investor out of all the major bear markets over the years.

This is the problem with B&H, that you need nerves of steel and brains
of pure custard to sit there and do nothing while the market falls 10,
20 or even 50%. Once you accept that there are definite trends and that
prices can fall as well as rise then you become a timer and need to
decide on a set of rules to use to indicate which way things are going.