Real Estate is dying? Investment-wise what is the next Asset Class Du Jour?

But isn't paying your mortgage saving? A house is not likely, even in the worse case scenario, to depreciate to zero like most cars do eventually.
 
Hey Moo, that's great that you and Traderbal are already there in understanding this. I know I said I like the KISS system (and this obviously isn't), but in order to apply it I need to be able to see probabilities 2-3 yrs out.

My take on this is that China and the US will not be able to play with currency rates like they want too. The rest of the world will say no. Too much pain. And China really has to rein it in soon or face a horrible inflation and possible Japan style end.

So I'll take a jump here cause I posted late and I'm posting too early. (I'm too old for these hours.) The US has a real problem letting the dollar fall further. And having it go up doesn't begin to zero out the triple deficits. US can't live with huge deficits. Can't really raise taxes. Falling Dollar already taxed the people (and world) too much. If Dollar goes up then what can be attached quickly to help balance the books. Most would say taxes, but politically incorrect. Increased savings?, not in our immediate gratification society. The big assets to attach are: RE equities, pension funds, and the stock market. So I close my eyes on int. rates cause not at issue in this picture. It is a little too micro. And Japan is already there to look at and see rates are really not too important. We can't finance anymore debt at any rate (for the most part). No more money out there.

So obviously, there goes, RE or Broad or Pension Funds. I think a combo.

OK Moo, I tossed big picture out there. Now watch it fly.

Sorry Mike. Even in SB/M.

This is why I like necessity commodities. Energy, sugar, corn, soy, etc. in their own time. First is energy. When big money moves I like even more basic "things". In the end I step back into a bloody RE market.

Builders need to think way ahead cause of the long exposure on capital so this is my mind set. Can't help it anymore. I've got mentors in this, Buffet and Gates. Buffet especially invests so early. Why did he buy all that silver in 96? For China and because Clinton was selling it all off cheap. Buffet probably already has it sold in his mind. Where is he buying? Shorting the dollar. So he sees a falling dollar anyway, probably after it bounces around here. Why would it fall, cause the other 3 assets fall too and the dollar, stock of the USA worth, will drop even after taking from the 3 assets above. Most of the currencies are like a bunch of drunks in a bar. One falls and they all go.

Moo, good thing I don't know anybody here. These are not popular, sing-along thoughts.
 
Hello,

This is a very interesting post which certainly questions ones "common sense" that real estate is "safe" and that it "always goes up". I wouldn't know where to question some of the articulate posts on this thread, so I won't even try.
However, I have a question that is a personal one. Let's say that I live in the Cleveland area (true - spare me the jokes) and I have 150k that is sitting in a CD. I trade ZN (bonds) scalping 40 or so contracts a day (in lots of 2). This is RISKY, to say the least. So, I am not looking to park this money in the financial markets. I would like to move to a townhouse or condo and pay for nearly all of it in cash. The problem - I perceive this market to be overpriced (yes, even here). Perhaps 2005 or early 2006 would be better? Is this strategy sensible? Yes I know mortagage interest can be deducted, but that doesn't mean its a REBATE. Also, anemic CD returns leave little after taxes.
The other problem is the mentality of Cleveland. People here believe they MUST have a profit in real estate and the Eastern Europeans can be a STUBBORN lot. An example: A townhouse located right on the street (row house style - we have few of these) interests me. As far as I can tell its still owned by the builder/developer/holding company. They want 249k and the tax apprasial is 218k. This house was built in 1999!!!
Because its not for everyone (limited market) I think 180k is more like it. Thoughts and comments about my situation and real estate in such places as CLeveland would be greatly appreciated
 
Silverware, the thing I get a kick out of is the "Stubborn E. European". I'm really chuckling inside ever since I read your post. Nothing like getting beat with an economic baseball bat to Humble one. Nice to see the stubborn grovel.

I wouldn't hold dollars or RE. I'm sure you've seen a 3-5 yr dollar chart. What a rip. And IMO, 35% of RE "equity" is just dollar devaluation.

Let the Sellers come begging in a couple of yrs.

Maybe take a longer view. Think outside of your normal box. You sound like a day or swing trader. Maybe you think in short time frames. No offense intended, I wish I could trade like that.

Good luck.
 
Actually, an opinion as to how real estate decline on the coasts will effect the fly-over states like Ohio would be interesting to read for me. My guess is we would be too stubborn to cave in and sell. Also, I don't know this for a fact, but I'd bet there is less leverage and less speculation in a place like CLeveland.
 
For those interested in trend trading an asset du jour, here are the normal 4 phases of a commodity cycle in trend (like oil or nat gas). Maybe everyone knows this stuff already. Even my notes on this are old. I think we are in phase 4 for petro plays. At least I'm buying Placements like we were.

I've been taking ASPO for a little over a yr. The Peak Oil newsletter. We should hit peak oil in mid 2005. Peak Nat Gas may be soon as well. Depends on coal and U use.

We passed Peak uranium long ago. A U play that hits will be an ATM for someone. I've hit one. There are not many to play.

Phase I – Early Leader Phase

Phase II – Price/Volume Index Breakout Phase

Phase III – Index Correction Phase

Phase IV – Junior Exploration and Funding Phase
 
Quote from silverware:

Hello,

The other problem is the mentality of Cleveland. People here believe they MUST have a profit in real estate and the Eastern Europeans can be a STUBBORN lot.
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what is the connection between cleveland and eastern europeans?
 
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