One bubble after another

[Voodoo-king]

Whats up with REITs and IYR these days? Looks like the biggest bubble around. I stopped buying REITs eight mounts ago, because I thought the housing slowdown, and the not so attractive yields would stop the run. Now I almost laugh when I look at the $reit index. 3% yield on IYR, that’s ridicules. REITs are supposed to be bought for income.

Look at the 10 year chart, one bubble after another…

 

[narballs]

harvey dent writes interesting stuff on market bubbles ... good read. u can find on amazon.

 

[diligent]

IYR tracks commercial real estate and not residential - many think that commercial real estate will benefit from a breakdown in residential.

 

[Voodoo-king]

Quote from diligent:

IYR tracks commercial real estate and not residential - many think that commercial real estate will benefit from a breakdown in residential.

About 18% of $reit is residental, 26% is retail (should follow the housing marked closly).

 

[diligent]

are we talking about IYR or "$reit" ?

what do you mean by $reit the Dow Jones Equity All REIT Index?

 

[Voodoo-king]

Quote from diligent:

are we talking about IYR or "$reit" ?

what do you mean by $reit the Dow Jones Equity All REIT Index?

Almost perfect correlation between IYR and the Dow Jones Equity REIT index, so there can't be much difference in weighting between the two. I brought IYR in because it was easier to find information about the yield for IYR than $reit.

 

[TRADERBM]

Quote from diligent:

IYR tracks commercial real estate and not residential - many think that commercial real estate will benefit from a breakdown in residential.

Could you explain how the breakdown of residential properties gives rise to commercial real estate?


As consumer spending goes down , doesnt commercial retail space suffer as well?

I have heard this too, but want to see the correlation.

Thanks

 

[diligent]

i dont know... i have no positions in any of this stuff because i dont understand exactly what is going on...

it seems like a bad strategy to short housing by shorting IYR which gives a dividend and shorting the homebuilders which have just bottomed... so im out.

im not sure how to play a perceived housing bubble.

 

[Eliot Hosewater]

Quote from narballs:

harvey dent writes interesting stuff on market bubbles ... good read. u can find on amazon.

That's Harry Dent.

http://amazon.com/s/ref=nb_ss_gw/00...eywords=harry+dent+bubble&Go.x=0&Go.y=0&Go=Go

 

[Voodoo-king]

Harry Dent makes some interesting predictions. But NASDAQ at 13000 or Dow at 30-40k before 2010 is probably a little bit to optimistic.

Buying what is not housing correlated is probably the best way to play a perceived housing bubble. I chose to buy bonds back in April when I anticipated the housing slowdown. Bought QQQQ in May, June and July, a little to early, but if NASDAQ hits 13000 im prepared