Area Foreclosures

...at present I envision a "bottom" more as matter of time than a matter of price. (Timewise I think at least another year and then flat for several more.) To even predict a price point would be to assume that the "vacation/second home/building lot" market was a "real market" to begin with and not just another speculative bubble like tech stocks and beanie babies. Last time I looked, JDS Uniphase (bubble price: $1,000) was $4-and-change; and Princess the Beanie Bear (bubble price: $700) could be had on Ebay for $3.99. Granted, RE is more tangible than the other two (although the Beanie Bear is pretty close), but it is not only more risky and expensive to carry, but also a depreciating asset that's not an "everyman's" investment--like so many investulators are now finding out.

The economic meltdown; global recession; RE Crash; Credit Crunch; Stock Market/Hedge Fund Collapse; Trillion-Dollar Bailout-a-Palooza; and Madoff-like schemes will totally change the dynamics of investment going forward. All the rules have been tossed away and we're entering uncharted economic waters. When the smoke clears, I think a high-priced "second/vacation home or investment lot" is the last thing the public-at-large will be seeking (or able) to acquire.

The RE-Free Money Frenzy has produced an over-abundance of vacation property all around the world. I know that many who live and vacation here think that this is the "only and most pristine" property worth buying on the face of the earth--truth be told, it isn't.

Please oblige me by plugging your thesis into mine:

Real Estate markets are local.
There is such a thing as micro-economics.
We have entered the Psychozoic Era, or Age of the Mind.
Internet Technologies will permit 1,000,000's of people to work from virtual offices.
The majority of people from the colder climates prefer mild winters.
If a family can be shown that they can earn an equal living and increase their quality of life with little effort they will choose the latter.
SoWal has young and adaptable infrastructure.
SoWal can only accommodate a population of 130,000 with it's future land use and developable land area.
History shows that a population of 130,000 is probable in places with geography and weather like SoWal's.
That beach is not easy to manufacture.

I forgot one thing: People from the North who will be thinking about moving here don't have any idea that some people from the South are still thinking about the Civil War.

Real estate markets may be specialized, but they are still affected by events outside their geographic area. Sowal is a different kind of market, but is still tied into the overall economy.

Yes, people from colder climates often prefer milder winters, but are also appalled by the summer's heat & humidity and hurricanes. Every discussion with my Northern relatives requires me to explain once again WHY this area's busy season is in the summer (as they consider the summer weather hellish) and my cell phone goes nuts w/ calls from all over the country every time a hurricane or tropical storm hits the national news.

We think this area is paradise, but not everyone likes the same things. My father remembers that we have great parks, but that it was too hot to stand in the shade in a swimsuit and drink a beer before it got warm. My mother loves the Seaside Rep, but thinks the ocean is too hot for swimming by May. Friends love to visit the beach, but are absolutely appalled by many of the ethnocentric or overly religious opinions on Sowal or in the papers.

Telecommuting's growth will be stunted by the lack of a good infrastructure. People who CAN live/work anywhere will chose a place w/ the exact benefits and amenities they want. Crappy internet & cell service, a high cost of living, and a lack of employment options will not effectively draw people as residents.

Real estate markets may be specialized, but they are still affected by events outside their geographic area. Sowal is a different kind of market, but is still tied into the overall economy.

Yes, people from colder climates often prefer milder winters, but are also appalled by the summer's heat & humidity and hurricanes. Every discussion with my Northern relatives requires me to explain once again WHY this area's busy season is in the summer (as they consider the summer weather hellish) and my cell phone goes nuts w/ calls from all over the country every time a hurricane or tropical storm hits the national news.

We think this area is paradise, but not everyone likes the same things. My father remembers that we have great parks, but that it was too hot to stand in the shade in a swimsuit and drink a beer before it got warm. My mother loves the Seaside Rep, but thinks the ocean is too hot for swimming by May. Friends love to visit the beach, but are absolutely appalled by many of the ethnocentric or overly religious opinions on Sowal or in the papers.

Telecommuting's growth will be stunted by the lack of a good infrastructure. People who CAN live/work anywhere will chose a place w/ the exact benefits and amenities they want. Crappy internet & cell service, a high cost of living, and a lack of employment options will not effectively draw people as residents.

Sounds like we've identified what is in our control to improve on. Those things that are outside of our control are what they are. I'd say that over the coming 15 years we will see popoulation of 130,000 in SoWal.

"The economic meltdown; global recession; RE Crash; Credit Crunch; Stock Market/Hedge Fund Collapse; Trillion-Dollar Bailout-a-Palooza; and Madoff-like schemes will totally change the dynamics of investment going forward. All the rules have been tossed away and we're entering uncharted economic waters"

Shelly

Read your history of economics and the business cycle. All of the above has happened before and undoubtedly will happen again in the next 25 years. History always repeats itself but with different players. We have always muddled through and we will muddle through again.

"The economic meltdown; global recession; RE Crash; Credit Crunch; Stock Market/Hedge Fund Collapse; Trillion-Dollar Bailout-a-Palooza; and Madoff-like schemes will totally change the dynamics of investment going forward. All the rules have been tossed away and we're entering uncharted economic waters"

Shelly

Read your history of economics and the business cycle. All of the above has happened before and undoubtedly will happen again in the next 25 years. History always repeats itself but with different players. We have always muddled through and we will muddle through again.

Hi Goofer!

...I have no problem with "muddling," (I've positioned myself for the present scenario); it's the "I'm gonna get rich quick and retire in luxury at 35 by daytrading and flipping preconstruction condo contracts with zero percent down and absolutely no risk" and those who earn their living supporting that crowd that will be in for the shock of their lives.

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Hi Goofer!

...I have no problem with "muddling," (I've positioned myself for the present scenario); it's the "I'm gonna get rich quick and retire in luxury at 35 by daytrading and flipping preconstruction condo contracts with zero percent down and absolutely no risk" and those who earn their living supporting that crowd that will be in for the shock of their lives.

.

Those people have long been flushed down the toilet or are on the cusp of same. It is going to take a good 2 or 3 more years for real estate to turn, imho. As far as the stock mkt, well you know........I am a bull. Worst is behind us. Too much money on the sideline waiting to get in again. Everyone knows 4th qtr of 2008 was terrible and that the first half of 2009 will suck also. Unemployment will still go higher but that is a lagging indicator. If the second half gets better the stock mkt will go up 40% from here in the next 24 months.

........I am a bull.

...there was never a doubt over all these years.

Lololol

LOLOLOL

The bull needs the aluminum foil hat !!

You guys should just meet behind the playground after school.

Those people have long been flushed down the toilet or are on the cusp of same. It is going to take a good 2 or 3 more years for real estate to turn, imho. As far as the stock mkt, well you know........I am a bull. Worst is behind us. Too much money on the sideline waiting to get in again. Everyone knows 4th qtr of 2008 was terrible and that the first half of 2009 will suck also. Unemployment will still go higher but that is a lagging indicator. If the second half gets better the stock mkt will go up 40% from here in the next 24 months.

Then you assume that this market downturn and corresponding recession will be the shortest of say the last 7 recessions? I was looking at lengths of bottoms recently, if this is an average market downturn, we've barly scratched the surface on bottom treading. If this is a really really bad downturn, all things point to much lower numbers. Another thing to consider, in terms of valuations based on earnings, the S&P is currently very overpriced. I'm not trying to poop on your bull attitude, just voicing my take. You can count me as one who is still very very defensive with all cash on the sidelines and purely doing short term spot trades.

Hi Goofer!

...I have no problem with "muddling," (I've positioned myself for the present scenario); it's the "I'm gonna get rich quick and retire in luxury at 35 by daytrading and flipping preconstruction condo contracts with zero percent down and absolutely no risk" and those who earn their living supporting that crowd that will be in for the shock of their lives.

.

Care to talk some markets? What are you putting money in these days Shelly?

Care to talk some markets? What are you putting money in these days Shelly?

Blue chip + Tangible Products + International Exposure + Good Balance Sheets + Dividends

...and a good backup in cash.

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Blue chip + Tangible Products + International Exposure + Good Balance Sheets + Dividends

...and a good backup in cash.

.

So I take it you're long long on anything you own?

So I take it you're long long on anything you own?

..not "long-long" just long.

.

Blue chip + Tangible Products + International Exposure + Good Balance Sheets + Dividends

...and a good backup in cash.

.

Well shel, we are on the same page. Blue chip dividend payers like Pepsi Coca-Cola Johnson and Johnson Conoco Phillips Chevron MMM General Mills Microsoft Proctor and Gamble Pfizer Merck General Electric Boeing JP Morgan etc. Just started a position in Heinz today. I am not worried about the names in my portfolio. I don't own any individual foreign stocks, I have a Vanguard total foreign fund in my IRA. Always have some cash to deploy when the right opty comes along. I am bidding for more Pepsi under 50 and also Conoco Phillips under 48. Conoco should raise their dividend in early Feb to about $2.08 which will raise the yield to slightly over 4%. Pepsi will raise their dividend in May. One of my themes is to buy companies that raise the dividend every year but alas this year GE only committed to keeping the dividend intact throughout 2009 and did not raise it. BTW, Coke should also raise their dividend for the March 2009 payout.

All this talk of "Long tangible products" and "international exposure" is gettin me hot!

Then you assume that this market downturn and corresponding recession will be the shortest of say the last 7 recessions? I was looking at lengths of bottoms recently, if this is an average market downturn, we've barly scratched the surface on bottom treading. If this is a really really bad downturn, all things point to much lower numbers. Another thing to consider, in terms of valuations based on earnings, the S&P is currently very overpriced. I'm not trying to poop on your bull attitude, just voicing my take. You can count me as one who is still very very defensive with all cash on the sidelines and purely doing short term spot trades.

The recession started in December 2007 according to the NBER......so if the recession ends in the 2nd half of 2009 it will be one of the longest of the post war era. The djii peaked in Oct of 2007 so this bear is no longer a cub. I appreciate your insight. The S&P trough earning should be about $55 to $60
in 2009 and those numbers are low estimates. Forward p/e's are very reasonable . I pick stocks and don't try to trade the mkt. If I can buy the stocks I mentioned at the levels I have bought them at in October and November , I am very pleased. Many of them yield over 5% and are the bluest of the blue. I believe the Oct/Nov lows will hold. Strictly my opinion and I an not pontificating to anyone else. I can live with my strategy.

Well shel, we are on the same page. Blue chip dividend payers like Pepsi Coca-Cola Johnson and Johnson Conoco Phillips Chevron MMM General Mills Microsoft Proctor and Gamble Pfizer Merck General Electric Boeing JP Morgan etc. Just started a position in Heinz today. I am not worried about the names in my portfolio. I don't own any individual foreign stocks, I have a Vanguard total foreign fund in my IRA. Always have some cash to deploy when the right opty comes along. I am bidding for more Pepsi under 50 and also Conoco Phillips under 48. Conoco should raise their dividend in early Feb to about $2.08 which will raise the yield to slightly over 4%. Pepsi will raise their dividend in May. One of my themes is to buy companies that raise the dividend every year but alas this year GE only committed to keeping the dividend intact throughout 2009 and did not raise it. BTW, Coke should also raise their dividend for the March 2009 payout.

I'm not touching financials and I've steered clear of GE...it's a hedge fund with a lightbulb factory attached to it.

And how long to you think it will take Citigroup to change its name to Lincoln Financial--it will be trading for $5 before long.

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I'm not touching financials and I've steered clear of GE...it's a hedge fund with a lightbulb factory attached to it.

And how long to you think it will take Citigroup to change its name to Lincoln Financial--it will be trading for $5 before long.

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I agree with you on Citi. Be specific and name some of the names that you have invested in.

I agree with you on Citi. Be specific and name some of the names that you have invested in.

...Exxon, McDonalds...stuff like that

.

I agree with you on Citi. Be specific and name some of the names that you have invested in.

Round 2?

Shel

Exxon is my favorite number one must own company. There was a great article in the WSJ (?) today saying that is will be on the prowl again for a major acquisition ( Royal Dutch Shell )or major joint venture with Brazil. $40 billion in cash and a AAA credit rating. Smartest CEO on the planet with Ray Tillerson. I also like MCD but am waiting for a better entry point. It might be a long wait !!! Great company.

The recession started in December 2007 according to the NBER......so if the recession ends in the 2nd half of 2009 it will be one of the longest of the post war era. The djii peaked in Oct of 2007 so this bear is no longer a cub. I appreciate your insight. The S&P trough earning should be about $55 to $60
in 2009 and those numbers are low estimates. Forward p/e's are very reasonable . I pick stocks and don't try to trade the mkt. If I can buy the stocks I mentioned at the levels I have bought them at in October and November , I am very pleased. Many of them yield over 5% and are the bluest of the blue. I believe the Oct/Nov lows will hold. Strictly my opinion and I an not pontificating to anyone else. I can live with my strategy.

Does the NBER also determine when the recession ends? Has there ever been a prior recession called when GDP growth was positive?