Predicting the Future

petrfitz- Congrats on your prediction and I wish you a speedy recovery of lost assets in the years to come.

The stock market and the real estate market differ in many important ways, so I wouldn't try to draw too many parallels. Consider the following:

** The stock market is a discounting mechanism that ultimately reflects the relative eagerness of buyers and sellers based on their probabilistic assessments of the future state.
** Utility functions are fairly consistent across investors
** The stock market is liquid.
** Individual investors are limited to 2x leverage by law.

** The real estate market is primarily a backward looking pricing mechanism that moves up and down in fairly slow cycles resulting from credit expansion (or contraction) and optimism (or pessimism).
** Real estate valuations are influenced by idiosyncratic factors, personal preferences, intangibles and varying utility functions
** Physical real estate is illiquid
** Individual investors in real estate can use much greater leverage
** The real estate market tends to lag the stock market, sometimes by years

I predict that Steve will post non stop on this board until it is obvious to everyone that the RE market has turned around. He will then make arguments that he single handedly saved the world.

"** The real estate market is primarily a backward looking pricing mechanism that moves up and down in fairly slow cycles resulting from credit expansion (or contraction) and optimism (or pessimism)."

Then we're fucked.

"** The real estate market tends to lag the stock market, sometimes by years"

Hope you're right.

Love it,

Behaving just like all those DotBust permabulls (RIP). The moment the market started shifting, they came out in force and said "we knew, of course we knew! who didn't know?".

LMAO.

All bubbles are the same. So are their cheerleaders.

But, man, MMAfia - you can't imagine the money you make in the middle of them. Bring on the next bubble.

the next bubble is oil.

It should be high and will be forever but the current market prices reflect a huge amoiunt of speculation. unless we attack Iran there will be an Oil bubble burst.

wow petrfitz, you *really* think OIL is the next bubble?

brilliant!!!

who on earth would have "thunk" it?

another post where MMAfia attacked and added no value. Still waiting for you to make some comment that adds any amount of value

I'm done with that with the previous generation of perma-bulls.

You n00bs don't interest me the way spunky did. Back in those days, I did post, and what did I post last year?

I said:

If you are a first-time home buyer, you should put your savings into Gold instead of plunking it down on a downpayment for an overpriced apartment in Manhattan.

I also that you should wait to buy and rent instead since the same money will get you more apartment in the near future.

Then all the perma-bulls of the previous generation came attacking back then.

Now the new crop has sauntered it, albeit a little late in the game. With all the negative headlines and reality staring down at your eye, I can understand the super defensiveness. But it's only going to get worse.

Soon, there will be an even newer crop, except they will be the angry ones.

hmm MMAfia so as proof of your genius you came up with "i said to buy gold and not RE?"

you truly are a genius!

Since you are agreat market timer, can you tell us about your experience and investments that made you your fortune?

Exactly petrfitz,

That's EXACTLY why I was so frustrated back then... it is NOT rocket science, yet people blasted me last year for saying exactly that.

and my, if you look at the archive, you will see how many people blasted me for something so... obvious, yes?

Thanks for proving my point.

"If you are a first-time home buyer, you should put your savings into Gold instead of plunking it down on a downpayment for an overpriced apartment in Manhattan."

Buddy, the true sign of a loser is one who preumes everyone else is a loser. But thanks for your gold *tip*. Seriously though, are you a million plus a year guy? Please divulge as you seem to dole out financial advice with the best of them.

and your experience and investments that made you your future? or are you a monday football quarteback?

I'm sure he weekended a few million in gold for today's pop and sold around 12:30 today or so (considering how its been down about 9% in the last couple of months.

"considering how its been down about 9% in the last couple of months."

um, and what planet are you from? can't be earth, since over here, Gold is up 11% YTD for the first half of this year.

http://www.marketwatch.com/news/story/metals-stocks-gold-futures-fall/story.aspx?guid={921C59DD-66A2-4F8E-B0D5-9EBA8CCBA57E}&dist=hplatest

totallyanonymous, and what would me posting about how much I'm worth have anything to do with anything on this board? you'd actually believe what people would post on an anonymous board when it comes to personal wealth? in that case, my wife is an ex-model/actress with a trust fund worth $34 million.

I believe totallyanonymous said last 2 months, not the last six month, in regards to gold.

Of course kgg- that's a convenient time frame for him to pick. As it was for Spunky, as it was for... the list goes on and on. A quick search will take you down memory lane late last year where you can read many many similar posts.

I stopped the Gold bantering because there was too much focus on volatile, short-term fluctuations, and people were using the data to conveniently prove their point (down one week, one month etc). Moreover, I was starting to talk too much about trading principles in what is really a real estate forum!

Instead, just understand that:

1. Nothing ever goes up in a perfectly straight line
2. Gold is still in an upleg cycle in what has been a long bull market (about 7 YEARS now)

Just to put this into perspective, look at the following chart:

http://www.the-privateer.com/g-bottom/gold98-l.gif

Given the situation in the current real-estate market, my point still stands that Gold as an curency inflation-hedge asset class is a much more compelling investment option.

"um, and what planet are you from? can't be earth, since over here, Gold is up 11% YTD for the first half of this year." "Of course kgg- that's a convenient time frame for him to pick."

Now I know you are a loser. I know what Gold did because I OWNED it at 880 and sold it at 940 (prior to its run up to near 1000, which it scaled back from to the tune of about 9%. You have no idea what you are talking about.

And I'm noit a big guy. I;m just a schmuck. What does that make you.

"in that case, my wife is an ex-model/actress with a trust fund worth $34 million"

so the fact that you have a magic cock makes you an authority on gold and real estate markets? IMHO, it makes you an authority on magic cocks.

"totallyanonymous, and what would me posting about how much I'm worth have anything to do with anything on this board? you'd actually believe what people would post on an anonymous board when it comes to personal wealth? in that case, my wife is an ex-model/actress with a trust fund worth $34 million."

Because I and we are all sick of internet know it alls who it turns out are worth 43,000 plus a 1999 honda civic. If you're worth millions kindly let all us peons know and we'll adjust our cynicism accordingly. Until then you're another internet troll.

totallyanonymous,

I've appreciated and respect Juice's attempt to get me to stop with the garbage posts, since he actually does remember. It's unfortunate that you feel the way you feel about me, but it is what it is and there's no need for me to personal attacks or to prove myself to you or anyone here.

"...personal attacks or to prove myself to you or anyone here."

But wait a second. You seem happy to pat yourself on the back about how right you are and how your predictions are omniscient. So it seems there's a disconnect here. Either you do need to prove yourself to this board (for whatever reason) or you don't. Which is it?

Mafia No need to prove yourself That is the only thing you do on this board and that is try to prove yourself, which leads me to believe you are so unsure of yourself you need this board to try to justify that you are right and everyone else with a different opinon is wrong.That is the trait of someone with low self esteem, probably someone with little or no accomplishments in life, and resents anyone who has aquired their wealth through a DIVERSIFIED porfolio of stocks, bonds, and most importantly in my opinion, real estate investments. Keep the rents coming, the sky IS NOT falling.

Thanks for figuring me out for me zorter.

zorter- Now that stocks, bonds and real estate has fallen, how is that diversified portfolio doing now?

"On this board we have a few self proclaimed geniuses who take credit for recognizing that there was going to be a softness or correction in the housing market. They claim to be brilliant because no one else saw that there may be a bubble bursting after 5 years of historic rises in home ownership, valuation and equity."

Given that the majority of buyers and brokers from 2004-2007 were saying "growth will slow, but prices will keep on increasing" (and that only after years of claiming that growth would continue), folks who called for declines DO look pretty smart relatively speaking now.

Not to mention, calling an increase in asset classes that generally rise with inflation over long periods is stupidly unimpressive...

And, you might not be impressed, but we're certainly all within our rights to say...

TOLD YOU SO...

Eddieilson didnt you see the reports that just came out? they say exactly "growth in units sold have slowed but prices have inceased"

So who was correct?

Told YOU so.

petrfitz, you may be the only bull who interprets the latest reports as good news.

see the realdeal comments below:

"Anonymous

No surprises here.

1. Reflects closings of condos that actually went into contract a long time ago (preconstruction sales)
2. As the article notes, skewed by monster 15 CPW and Plaza data
3. Add to that falling sales of studios and 1BRs, and how in god's name could the average do anything but go up?

Which is why anyone who has a cerebral cortex (apparently this excludes the NYT and real estate brokers) pays no attention to averages.

Perhaps we should look at the massive jump in inventory, time-on-market and dead open houses as leading indicators?

Comment #0 Posted By: Anonymous 07/02/08

Anonymous

As a broker with a working cerebral cortex, I and I'd say a huge majority of my colleagues would agree with reasons 1,2 and 3 offered by Anonymous The First. And, if the aformentioned Anonymous read the post completely, he/she'd notice that at least points one and two in his comment are covered in the post. We with working cerebral cortices see that Manhattan has become a buyer's market. We know that some of our colleagues are having their sellers drop the prices of their listings three, four and more times because instead of being honest with sellers as to what their properties are worth, they came up with pie in the sky asking prices just to get the listing. An apartment priced and marketed correctly - with the interest of the seller and NOT the listing broker in mind - will sell quickly. As for 15 CPW and its ilk...spare change???"

petrfitz/sneaky pete - you ever hear of "product mix"?

Keep posting, my friend. You make the rest of us look so smart.