Trading for a living OR Trading for a fortune
- Thread starter Pension_Admin
- Start date
There is mostly anectdotal data available on where the housing market is currently. I think we have to go back to the NY Times to find the real answers:
http://query.nytimes.com/gst/fullpage.html?res=9D04EEDA153BF934A2575BC0A967948260
There are many more articles about housing boom/busts over the years in the New York Times.
The northeast is an interesting area and things change quickly over the years. I will give you a few examples. Newark and Paterson used to be nice places to live 30-40 years ago. In fact, there are many elderly people who still live in these depressed areas that were taken over by hoodlums and criminals a long time ago. Recently, I visited an elderly couple who did not want to leave the neighborhood in Irvington in which they grew up. They live in the neigbhorhood barricaded in their house with nowhere to go trapped. Their house is from the old times and it has the original garages for the large vehicles (Model Ts and Model As). Unfortunately, when they pass on, their house will most likely be taken over by local gangs and drug dealers.
As the following population data suggests, you can see when Newark became undesirable as a place to live:
1666 200 (est.)
1776 1,000 (est.)
1800 6,000 (est.)
1830 10,953
1850 38,894
1890 181,390
1900 246,070
1910 347,469
1920 414,524
1930 442,337
1940 429,760
1950 438,776
1960 405,220
1980 329,248
1985 314,000
1990 275,221
2000 273,546
2004 280,451 (est.)
There are some great houses there that at one time people felt were valuable, but since the 1960s the place has been very bad. In fact, I was carjacked at gunpoint from in front of the cemetary on Central Avenue in East Orange. That cemetary was divided in two when they placed the Parkway through it and is very very old that encompasses most times in Newarks grand history.
Housing is very cyclical depending upon the time and the geography. My family has been in the NJ area for over 100 years. We have always been a very hard, working industrious lot. In the 1920s, my grandfather had owned a mill in Paterson and that was soon cut short after the depression. During the depression, the mill shut down and he was forced to work as a truck driver. He was lucky because no one else had any form of income at all including the stock traders on Wall Street.
Over the years, my family has snapped up properties as they went along. During the horrible 70s, property was very cheap and my father was a medical doctor who could finance such ventures.
My grandmother had also snapped up properties in a similiar fashion during even cheaper times. My other grandfather had a job as an insurance salesman during a period when no one had a job. She bought a few beachside properties when everyone really didnt care about the beach. People went to the beach in the roaring 20s, but in the 30s it was a different story.
The people who flipped houses in the recent years were not incorrect. These were smart investors. They realized that this was irrational buying and that the trend would eventually come to an end. They didnt know when the trend would end so they just turned around and sold their houses.
We live in especially good times right now. As I have stated in the previous post, there are indications of a changing time. When times change, things can get rough for an unknown period of time quickly. When those times get especially rough, then thats when you buy everything from stocks to real estate.
Right now New York City has a thriving government, but its not too distant in the past that it was going to declare bankruptcy in the 1970s.
You see that our government is building up lots of debt and where will that go.
Let me now digress to a period that everyone here has either forgotten or is too young to remember:
http://en.wikipedia.org/wiki/Late_1980s_recession
The 80s were a great time where every Christmas seemed to be a happy and fruitful one. From the time in 1983 up until that fateful day in October of 1987, things were going well. Then there was that time when my family and I were around a television set looking at what just happened to the stock market. The economy didnt recover until quite a few years later.
To answer your question, the housing market will go much lower in the times that are to come. Things can get very bad, very quickly. One day in the 80s every Christmas was very fruitful. I can tell you that the Christmas of 1987 was a change. No one expected this crash and it was under the very same conditions that exist in todays market.
We had known back then that there was a recession on its way, but no one knew exactly when it would strike. The DJI had closed at 2304 on January 1st of 1987. In September of that year it had read at 2700. That was a 17% ytd gain much like today.
During these good times, you save up and invest as hard as you can. Thats so in the bad times you can snap up stocks and property.
I have attached a chart. You want to be on the bottomside of the chart when this market inefficiency rears its head. When it does, and it will, the unemployment claims will zip through the roof. Thats when the foreclosures will come and thats when you get in on the market.
The reason why I ramble on about the good times and bad is to illustrate to you the cyclical nature of the United States. Roaring-twenties>depression, fabulous 50s>horrible 70s, goodtimes 80s>george h bush era (stock market crash/recession), Clinton era good times>George W. Bush era recession/stock market crash/unpopular war.
The time for housing has been good, but its about to get very bad.
To say the stock market might crash in the future sounds silly and extreme, however, I have lived through 2 good ones and some panics. October of 1987 started out great and then it happened. One day the foreign markets dropped like a rock and you could feel the cold tingling in your spine that this wasnt going to be good. In the open market, it was chaotic.
Imagine one day your looking at the Dow, 17% up for the year, not bad. The next day, did someone just drop a nuke?
http://query.nytimes.com/gst/fullpage.html?res=9D04EEDA153BF934A2575BC0A967948260
There are many more articles about housing boom/busts over the years in the New York Times.
The northeast is an interesting area and things change quickly over the years. I will give you a few examples. Newark and Paterson used to be nice places to live 30-40 years ago. In fact, there are many elderly people who still live in these depressed areas that were taken over by hoodlums and criminals a long time ago. Recently, I visited an elderly couple who did not want to leave the neighborhood in Irvington in which they grew up. They live in the neigbhorhood barricaded in their house with nowhere to go trapped. Their house is from the old times and it has the original garages for the large vehicles (Model Ts and Model As). Unfortunately, when they pass on, their house will most likely be taken over by local gangs and drug dealers.
As the following population data suggests, you can see when Newark became undesirable as a place to live:
1666 200 (est.)
1776 1,000 (est.)
1800 6,000 (est.)
1830 10,953
1850 38,894
1890 181,390
1900 246,070
1910 347,469
1920 414,524
1930 442,337
1940 429,760
1950 438,776
1960 405,220
1980 329,248
1985 314,000
1990 275,221
2000 273,546
2004 280,451 (est.)
There are some great houses there that at one time people felt were valuable, but since the 1960s the place has been very bad. In fact, I was carjacked at gunpoint from in front of the cemetary on Central Avenue in East Orange. That cemetary was divided in two when they placed the Parkway through it and is very very old that encompasses most times in Newarks grand history.
Housing is very cyclical depending upon the time and the geography. My family has been in the NJ area for over 100 years. We have always been a very hard, working industrious lot. In the 1920s, my grandfather had owned a mill in Paterson and that was soon cut short after the depression. During the depression, the mill shut down and he was forced to work as a truck driver. He was lucky because no one else had any form of income at all including the stock traders on Wall Street.
Over the years, my family has snapped up properties as they went along. During the horrible 70s, property was very cheap and my father was a medical doctor who could finance such ventures.
My grandmother had also snapped up properties in a similiar fashion during even cheaper times. My other grandfather had a job as an insurance salesman during a period when no one had a job. She bought a few beachside properties when everyone really didnt care about the beach. People went to the beach in the roaring 20s, but in the 30s it was a different story.
The people who flipped houses in the recent years were not incorrect. These were smart investors. They realized that this was irrational buying and that the trend would eventually come to an end. They didnt know when the trend would end so they just turned around and sold their houses.
We live in especially good times right now. As I have stated in the previous post, there are indications of a changing time. When times change, things can get rough for an unknown period of time quickly. When those times get especially rough, then thats when you buy everything from stocks to real estate.
Right now New York City has a thriving government, but its not too distant in the past that it was going to declare bankruptcy in the 1970s.
You see that our government is building up lots of debt and where will that go.
Let me now digress to a period that everyone here has either forgotten or is too young to remember:
http://en.wikipedia.org/wiki/Late_1980s_recession
The 80s were a great time where every Christmas seemed to be a happy and fruitful one. From the time in 1983 up until that fateful day in October of 1987, things were going well. Then there was that time when my family and I were around a television set looking at what just happened to the stock market. The economy didnt recover until quite a few years later.
To answer your question, the housing market will go much lower in the times that are to come. Things can get very bad, very quickly. One day in the 80s every Christmas was very fruitful. I can tell you that the Christmas of 1987 was a change. No one expected this crash and it was under the very same conditions that exist in todays market.
We had known back then that there was a recession on its way, but no one knew exactly when it would strike. The DJI had closed at 2304 on January 1st of 1987. In September of that year it had read at 2700. That was a 17% ytd gain much like today.
During these good times, you save up and invest as hard as you can. Thats so in the bad times you can snap up stocks and property.
I have attached a chart. You want to be on the bottomside of the chart when this market inefficiency rears its head. When it does, and it will, the unemployment claims will zip through the roof. Thats when the foreclosures will come and thats when you get in on the market.
The reason why I ramble on about the good times and bad is to illustrate to you the cyclical nature of the United States. Roaring-twenties>depression, fabulous 50s>horrible 70s, goodtimes 80s>george h bush era (stock market crash/recession), Clinton era good times>George W. Bush era recession/stock market crash/unpopular war.
The time for housing has been good, but its about to get very bad.
To say the stock market might crash in the future sounds silly and extreme, however, I have lived through 2 good ones and some panics. October of 1987 started out great and then it happened. One day the foreign markets dropped like a rock and you could feel the cold tingling in your spine that this wasnt going to be good. In the open market, it was chaotic.
Imagine one day your looking at the Dow, 17% up for the year, not bad. The next day, did someone just drop a nuke?
No, MO is a stock you want to own in a recession. During the height of tech bubble, MO was experiencing a V bottom and it was at 20. Then when the economy was going to crap around 2001 it shot to 50. Right after 9/11, it almost went to 60. Then the times started getting good again and MO went back to 30.
Now that the times are starting to get questionable, MO is back up.
Here is the reason as to why. During good times in the United States, people do not smoke or drink as much. During the harder times, smoking and drinking goes through the roof. The fact that Altria is up so high now is not a positive sign for the economy and a strong indicator of recession.
When you see money managers piling intro Altria, then someone believes there will be harder economic times ahead. When they start pulling away from it, then you know things will get better.
Now that the times are starting to get questionable, MO is back up.
Here is the reason as to why. During good times in the United States, people do not smoke or drink as much. During the harder times, smoking and drinking goes through the roof. The fact that Altria is up so high now is not a positive sign for the economy and a strong indicator of recession.
When you see money managers piling intro Altria, then someone believes there will be harder economic times ahead. When they start pulling away from it, then you know things will get better.
I don't doubt that the US will see some very hard times ahead given the fiscal irresponsability of the past 6 years. The US comptroller is going around the country saying that in order for the US to meet its obligations taxes are going to have to DOUBLE. Each man woman and child's portion of the national debt is $156K, up some vast amount since 2000. Where is the driver that will allow us to grow our way out of this mess? Earnings and margins are at record levels with not a lot of upside left after a few years of significant cost reductions and lay offs. productivity growth has slowed and probably peaked. The government and many large corporations have huge unfunded health and pension liabilities that will come to bear in the next decade and US demographics will add additional pressure on the tax base.
Yes it can get very bad, but no signs of it being imminent yet.
This year looks more like a repeat of 2004 to me and at the moment everything points to a strong finish to the year. If the pattern repeats we should see signs of weakness in this bull around the end of Dec, but maybe not. For now the high probability trade is on the long side.
Yes it can get very bad, but no signs of it being imminent yet.
This year looks more like a repeat of 2004 to me and at the moment everything points to a strong finish to the year. If the pattern repeats we should see signs of weakness in this bull around the end of Dec, but maybe not. For now the high probability trade is on the long side.
Nitpicking details, but according to this site (and it's links to the Bureau of the Public Debt) it appears to only be about 28.6k per person, but point made.
http://www.brillig.com/debt_clock/
You are right, it is the burden of unfunded government liabilities that each American has is $156K including the national debt.
http://www.gao.gov/cghome/d07222cg.pdf
page 5
http://www.gao.gov/cghome/d07222cg.pdf
page 5
Wow! Amazing that a man with that type of business interest would post here 600 times in 60 days!!
This a such a newbie question , and a dumb newbie question at that
very few people make a living trading, most of those that do either 1) have an edge due to their having privileged information ex: floor trader or MM 2) exploit temporary inefficiencies that come with technological changes or new markets, that lasts a few years at best -then invariably at som epoint they find it difficult to continue.
Aside from those who manage money even fewer people make a fortune trading, a very lucky fews- I would venture to say they are exceptions perhaps 1 in a 100,000 speculators, do make a fortune because they took huge risks when it paid off.
As for those who manage money , trading skills are not enough to make a fortune, there are great traders ou there returning 30% + per annum but who apparently can't raise more than a couple millions. Institutions will want the pedigree, the proper background, a track record and above all low volatility and if your returns are too high they will run away !
Of course it all depends on how you define fortune, nowadays it seems to be north of 100 millions, but let's say 10 millions... if you can make 10% of that in your life time trading from home then you can consider yourself succesful
very few people make a living trading, most of those that do either 1) have an edge due to their having privileged information ex: floor trader or MM 2) exploit temporary inefficiencies that come with technological changes or new markets, that lasts a few years at best -then invariably at som epoint they find it difficult to continue.
Aside from those who manage money even fewer people make a fortune trading, a very lucky fews- I would venture to say they are exceptions perhaps 1 in a 100,000 speculators, do make a fortune because they took huge risks when it paid off.
As for those who manage money , trading skills are not enough to make a fortune, there are great traders ou there returning 30% + per annum but who apparently can't raise more than a couple millions. Institutions will want the pedigree, the proper background, a track record and above all low volatility and if your returns are too high they will run away !
Of course it all depends on how you define fortune, nowadays it seems to be north of 100 millions, but let's say 10 millions... if you can make 10% of that in your life time trading from home then you can consider yourself succesful
Stock Trading As A Bank.
Trading for a " living " paints a picture of daytrading foolios who mega load up on stocks and panic at a couple upticks and sell. Sure put a monkey in a cage and he'll probably come out a few bucks ahead but my god the paperwork, the mess on the floor, the lifestyle, the eyes burned with red and green corneas, the butt stress & hemorrhoids the- violent action the swears, the ups and downs- the personalities that emerge- the unloving of any stock for a REAL reason... no passion except for money... Not for me.
Trading to make zillions, well, of course we all dream of that. In my twenty plus years of studding the market every day and trading approx 18 trades a QTR I have stumbled onto three or four of these moonshots and never had enough chips down or sometimes any chips down on the idea to get to the fortune part.
The closest I came was a good sized position in Entramed when the cancer story was published in the NY Times at the height of internet mania. I remember calling my Mom as she was being wheeled on a the operating room for breast cancer and saying " It's up $60 dollars what do you want to do! " And her saying in a drugged out haze " hold " Typical mom she's a roundtripper, she falls in love with her stocks too. In the genes I guess. (sold up $48 with her in recovery room 400 shares each)
The best I can say for myself is I love finding great companies no one's heard of-- I made $20K on one stock AIRM that just makes hospital helicopters! Recently a small killing in my wife's IRA with Force Protection who are making Humvees that don't blow up when an Iranian- made roadside bomb explodes beneath it. You can feel real GOOD about an investment like that and make money which is fun.
I trade like my money in the bank. In my online account I start with $80K every year and hope to crest nicely over $100K by years end when I take the excess over $80K out and play with it. I have a clothing store which just breaks even at best and sometimes loses money so the fun money really helps. And I have one huge advantage in the life plan area which allows me to not sock anything away for my families future- an odd generation skipping trust which was set up so long ago people lived only to be in their mid fifties and which will apparently make me very happy on like my 57th birthday-
What's most interesting about the market is that with so many inputs of info and cause & reaction it becomes a living organism and you can exist within that organism in a steadily profitable way... maybe $2,000 made on each successful trade and hopefully small losses on the losers> after a year, if you're always looking, the money adds up.
Good Luck Everyone!~
Trading for a " living " paints a picture of daytrading foolios who mega load up on stocks and panic at a couple upticks and sell. Sure put a monkey in a cage and he'll probably come out a few bucks ahead but my god the paperwork, the mess on the floor, the lifestyle, the eyes burned with red and green corneas, the butt stress & hemorrhoids the- violent action the swears, the ups and downs- the personalities that emerge- the unloving of any stock for a REAL reason... no passion except for money... Not for me.
Trading to make zillions, well, of course we all dream of that. In my twenty plus years of studding the market every day and trading approx 18 trades a QTR I have stumbled onto three or four of these moonshots and never had enough chips down or sometimes any chips down on the idea to get to the fortune part.
The closest I came was a good sized position in Entramed when the cancer story was published in the NY Times at the height of internet mania. I remember calling my Mom as she was being wheeled on a the operating room for breast cancer and saying " It's up $60 dollars what do you want to do! " And her saying in a drugged out haze " hold " Typical mom she's a roundtripper, she falls in love with her stocks too. In the genes I guess. (sold up $48 with her in recovery room 400 shares each)
The best I can say for myself is I love finding great companies no one's heard of-- I made $20K on one stock AIRM that just makes hospital helicopters! Recently a small killing in my wife's IRA with Force Protection who are making Humvees that don't blow up when an Iranian- made roadside bomb explodes beneath it. You can feel real GOOD about an investment like that and make money which is fun.
I trade like my money in the bank. In my online account I start with $80K every year and hope to crest nicely over $100K by years end when I take the excess over $80K out and play with it. I have a clothing store which just breaks even at best and sometimes loses money so the fun money really helps. And I have one huge advantage in the life plan area which allows me to not sock anything away for my families future- an odd generation skipping trust which was set up so long ago people lived only to be in their mid fifties and which will apparently make me very happy on like my 57th birthday-
What's most interesting about the market is that with so many inputs of info and cause & reaction it becomes a living organism and you can exist within that organism in a steadily profitable way... maybe $2,000 made on each successful trade and hopefully small losses on the losers> after a year, if you're always looking, the money adds up.
Good Luck Everyone!~
Excellent Commentary All.........
What is interesting to note is that historical data of all types are typically referenced in order to provide rationale for now and the future...
For example a commonly discussed item ...equities vs debt...
Wall Street has made the case for equities vs debt without regards to those companies thrown out of the indexes...thus obviously this is not a fair evaluation...nor is it correct....
The point being is that you cannot gelieve what you hear or read...You must form your own analysis...
In order to understand pricing... a more correct rationale would be to look at current abilities by individuals to transact business now...and what could happen in the future because of it...
Property buying capability is highly dependent on the lenders...Can you imagine what the real estate market would do price wise if there was no lending ? What if the lenders required 40% down on whatever was bought...etc...
.............................................................................................
In other words it is the ability to transact with money that affects price...and anything that affects this ability should be monitored...
This type of data is very difficult to develop and maintain...so much so that the Central Banks do not have a handle on it....
.....................................................................................
Just look at the confusion you see with regards to the prospective price of oil....you see estimates ranging from $35 to over $100 ....
The real key here again is the ability to buy it.....
If individuals have $50 per month available to buy oil....and oil doubles...then only half of the previous oil quantity can be consumed...etc...
..................................................................................
The point is that there are so many erroneous reports that sound as if they were fact...simply because of the freedom of speech and mass media....
Most Wall Street pundits would never show you any type of documented performance data ....because they have not performed the actual transactions that they recommend that others do...and references are made to media recognized references who in turn have no documented transaction records....truly insane....media=sheepherder...magazine salesman...
.......................................................................................
It is safe to say that the most opportune times to buy anything is when they are obviously cheap...ie the Warren Buffett...John Templeton style...are examples...
And this even applies to daytrading...not just long term investing.....Cheap regards to its own timeframe....etc...
.................................................................................
Indeed to know when an item is cheap...expensive is what a trader must endeavor to learn....regardless of what they are trading...
............................................................................................
Thus my point is that it was not long ago that one was reading about the money to be made in flipping properties...dotcom stocks....etc...now think back about the media and the notion that what one read was correct....etc....
One must form their own analysis...and should never rely on common media inputs ...as they are mostly about the selling of newspapers...books...seminars....TV spots...radio spots...internet driven media....whatever the media being sold is...
This implies that one should endeavor to learn what cheap or expensive really is...and act on ones own....and to appreciate the effort that is required to attain this knowledge....otherwise the probability of one giving their hard earned money away is very high...regardless of the asset to be purchased or sold...
It cannot be emphasized enough that one has to appreciate the difficulty of collecting and utilizing truly beneficial information...and to act without it.....is certainly not economically prudent...One will not find this type of information in the public media...
What is interesting to note is that historical data of all types are typically referenced in order to provide rationale for now and the future...
For example a commonly discussed item ...equities vs debt...
Wall Street has made the case for equities vs debt without regards to those companies thrown out of the indexes...thus obviously this is not a fair evaluation...nor is it correct....
The point being is that you cannot gelieve what you hear or read...You must form your own analysis...
In order to understand pricing... a more correct rationale would be to look at current abilities by individuals to transact business now...and what could happen in the future because of it...
Property buying capability is highly dependent on the lenders...Can you imagine what the real estate market would do price wise if there was no lending ? What if the lenders required 40% down on whatever was bought...etc...
.............................................................................................
In other words it is the ability to transact with money that affects price...and anything that affects this ability should be monitored...
This type of data is very difficult to develop and maintain...so much so that the Central Banks do not have a handle on it....
.....................................................................................
Just look at the confusion you see with regards to the prospective price of oil....you see estimates ranging from $35 to over $100 ....
The real key here again is the ability to buy it.....
If individuals have $50 per month available to buy oil....and oil doubles...then only half of the previous oil quantity can be consumed...etc...
..................................................................................
The point is that there are so many erroneous reports that sound as if they were fact...simply because of the freedom of speech and mass media....
Most Wall Street pundits would never show you any type of documented performance data ....because they have not performed the actual transactions that they recommend that others do...and references are made to media recognized references who in turn have no documented transaction records....truly insane....media=sheepherder...magazine salesman...
.......................................................................................
It is safe to say that the most opportune times to buy anything is when they are obviously cheap...ie the Warren Buffett...John Templeton style...are examples...
And this even applies to daytrading...not just long term investing.....Cheap regards to its own timeframe....etc...
.................................................................................
Indeed to know when an item is cheap...expensive is what a trader must endeavor to learn....regardless of what they are trading...
............................................................................................
Thus my point is that it was not long ago that one was reading about the money to be made in flipping properties...dotcom stocks....etc...now think back about the media and the notion that what one read was correct....etc....
One must form their own analysis...and should never rely on common media inputs ...as they are mostly about the selling of newspapers...books...seminars....TV spots...radio spots...internet driven media....whatever the media being sold is...
This implies that one should endeavor to learn what cheap or expensive really is...and act on ones own....and to appreciate the effort that is required to attain this knowledge....otherwise the probability of one giving their hard earned money away is very high...regardless of the asset to be purchased or sold...
It cannot be emphasized enough that one has to appreciate the difficulty of collecting and utilizing truly beneficial information...and to act without it.....is certainly not economically prudent...One will not find this type of information in the public media...