So Far, 2012 Is Eerily Similar To 1987 [View article]
mrm:
What does the state of "economic and financial indicators" have to do with comparing 2012 to 1987? They situation with the economy, markets, interest rates, etc., etc. were completely different in 1987, not even close to now. If we have a severe pullback, rest assured it will be occasioned by today's environment and market behavior, not some astrological chart similarities to 1987. The only thing missing from this article is a picture of a gypsy with her crystal ball.
The entire premise of this article is foolish, and occasions fear, simply because some are old enough to remember, or young enough to have heard tales, that the market's single greatest crash day in history occurred in 1987. Running around "curve fitting" indices, then suggesting, completely outside of any other similarities, that markets will follow the same behavior is simplistic nonsense.
The difference between the median and the mean is a direct measure of the skewness of the data. As either the number or magnitude of "way out there" data points increases, the mean and median diverge further.
Again, technical. Your points about housing are correct.
Amidst the commotion over what the sell-side told favored clients ahead of the Facebook IPO, Jeff Matthews points out the company's revenue growth (publicly available) has been sliding sharply for over a year. Maybe a bigger warning sign, Zynga - the equivalent of a hot-dog vendor in Yankee Stadium (FB is The Stadium) - is slowing at an even sharper rate. "People wanted to buy Facebook, no matter what." [View news story]
Like any product advertised and offered at a store at a price, it's always up to the consumer to decide whether it's worth the price and would be a good buy. Of course, in this country, nothing is the responsibility of the decision-makers anymore, whether it be houses, mortgages, IPO's, you name it.
It's always somebody else's fault that one made a stupid purchase, paid too much or executed a bad deal. And, one gets mad and finds somebody to sue (so, some lawyers can get rich). It's the American Way.
People who engage in this behavior would be better served buying a mirror.
My only point was a technical one, i.e., one cannot have a "normal bell-curve distribution" and have differing medians and means at the same time.
How much a change at the tails makes to the median is directly affected by the steepness or shallowness of the curve, not by whether its "normal" or not. Flat distributions with large standard deviations are more impacted by changes in tail data than distributions with values congregated about the mean. In any relatively "normal" distribution with a very large set of data points, it's unlikely that changes in tail data will make a material change in the median or the mean unless there's a flood of new values which upset the normality, e.g., massive wave of foreclosures.
"Sell your house ... yesterday," Gary Shilling tells Bloomberg. It will take 4 years, he says, to work off still-high inventories, during which time prices could fall another 20%. Turning to Facebook: "(It's) the end of the social media boom ... reminds me of Pets.com." [View news story]
Hitesh:
A few points:
1) I don't make deep involved studies of housing trends. I apply more simplistic logic. The charts which measure the cost of home ownership versus cost of renting are now at the crossover after many years of home costs being higher. Rents are continuing to trend higher. This will gradually apply upward pressure on home prices.
2) I, also, live in Florida (Sarasota), one of the worst-hit states in the housing crisis. Aside from numerous months of very positive data in Florida, I can see a boom in local home building, sales and related activity all around me, which puts some personal observance to the abstract data. I hear similar stories from friends elsewhere, not everywhere, of course.
3) Unlike many, who seem to think that anyone seeing opportunity in housing must have 100% of his portfolio in homebuilder stocks (what idiot does that?), I place my bets by making a diversified allocation in issues that benefit from housing activity . These include builders, suppliers, REITs, etc. Realty-related investments make up about 15-20% of my total portfolio. And, where possible, I buy common, preferred shares and convertibles that pay very attractive yields, so the timing of share-price rises isn't really critical to my immediate performance.
4) I am of the firm belief that if we see interest rates rise it will be because of a stronger economy and, also, that rising rates will lead more waiting buyers off the sidelines, as they will become apprehensive about losing low-rate mortgages. This will fuel further buying. Affordability is not retarding purchases, now, so increasing rates, still at ultra-low levels, will not have a major impact. Higher rates will also make lenders more willing to play ball.
Because I am a high-yield value-based investor, I look for out-of-favor sectors. I don't try to guess exact bottoms or how long it make take to recover. I am more interested that the shares I purchase are way below historical levels and that they offer substantial yields to alleviate the necessity for immediate price gains in order for them to be good investments.
I'm patient. It's always worked well for my strategy.
"Sell your house ... yesterday," Gary Shilling tells Bloomberg. It will take 4 years, he says, to work off still-high inventories, during which time prices could fall another 20%. Turning to Facebook: "(It's) the end of the social media boom ... reminds me of Pets.com." [View news story]
"Sell your house ... yesterday," Gary Shilling tells Bloomberg. It will take 4 years, he says, to work off still-high inventories, during which time prices could fall another 20%. Turning to Facebook: "(It's) the end of the social media boom ... reminds me of Pets.com." [View news story]
Hoop:
I meant, by "further way," not time, but valuation. The further below old highs we are, the more upside there is. That's why, when sectors languish, are at or near bottoms and everyone says "they'll never recover again" or "it will take generations," I get happy and buy stuff, especially stuff that pays nice yields, too. Then, I collect those oversize yields and wait.
It's a formula that works very nicely, much better than chasing the FaceBooks of the world, I can assure you.
"Sell your house ... yesterday," Gary Shilling tells Bloomberg. It will take 4 years, he says, to work off still-high inventories, during which time prices could fall another 20%. Turning to Facebook: "(It's) the end of the social media boom ... reminds me of Pets.com." [View news story]
Hitesh:
The classic overstatement in rebuttal. Nobody said we've had a "recovery." It's the direction that counts, not how far away from recovery we are. In fact, the further away, the better.
What's been evident is that inventory levels have dropped dramatically in many areas, sales volumes are increasing and prices have now made noticeable advances. This is all there in the data for anybody to see.
What will happen to housing prices when rates rise is that they'll be higher, as history has demonstrated conclusively for many, many decades. The notion that home prices are inversely related to interest rates is a subjective concept invented in the latest crisis, but unsubstantiated by any historical data.
It's fine. You prepare for ever-worsening conditions; I'll buy undervalued sectors, as I've done for a long time, and it's provided a very comfortable living, so far.
"Sell your house ... yesterday," Gary Shilling tells Bloomberg. It will take 4 years, he says, to work off still-high inventories, during which time prices could fall another 20%. Turning to Facebook: "(It's) the end of the social media boom ... reminds me of Pets.com." [View news story]
Mad:
Or, you can look at the trend in volume and pricing of realty, as well as the cost-comparison data versus renting, and invest accordingly. Or, you can choose to be scared witless by pundits, like Shilling and Schiff, who only preach the end of the world nonstop and without regard to what's happening, good or bad.
"Sell your house ... yesterday," Gary Shilling tells Bloomberg. It will take 4 years, he says, to work off still-high inventories, during which time prices could fall another 20%. Turning to Facebook: "(It's) the end of the social media boom ... reminds me of Pets.com." [View news story]
This simply has no connection to reality. Populations are ever expanding, and housing will be required. Furthermore, we're at the cross-over point, where rent costs are now exceeding ownership costs. The laws of economics will prevail and housing will begin to recover both volume and prices, which is exactly what were seeing, now.
"Sell your house ... yesterday," Gary Shilling tells Bloomberg. It will take 4 years, he says, to work off still-high inventories, during which time prices could fall another 20%. Turning to Facebook: "(It's) the end of the social media boom ... reminds me of Pets.com." [View news story]
Shilling is clueless about housing. There, I said it.
So Far, 2012 Is Eerily Similar To 1987 [View article]
In 1987, markets lost 21% in a DAY, in October. Not until the spring of 1989 did they recover to the level prior to that day.
So Far, 2012 Is Eerily Similar To 1987 [View article]
What does the state of "economic and financial indicators" have to do with comparing 2012 to 1987? They situation with the economy, markets, interest rates, etc., etc. were completely different in 1987, not even close to now. If we have a severe pullback, rest assured it will be occasioned by today's environment and market behavior, not some astrological chart similarities to 1987. The only thing missing from this article is a picture of a gypsy with her crystal ball.
The entire premise of this article is foolish, and occasions fear, simply because some are old enough to remember, or young enough to have heard tales, that the market's single greatest crash day in history occurred in 1987. Running around "curve fitting" indices, then suggesting, completely outside of any other similarities, that markets will follow the same behavior is simplistic nonsense.
Is It Time To Buy A House? [View article]
The difference between the median and the mean is a direct measure of the skewness of the data. As either the number or magnitude of "way out there" data points increases, the mean and median diverge further.
Again, technical. Your points about housing are correct.
Amidst the commotion over what the sell-side told favored clients ahead of the Facebook IPO, Jeff Matthews points out the company's revenue growth (publicly available) has been sliding sharply for over a year. Maybe a bigger warning sign, Zynga - the equivalent of a hot-dog vendor in Yankee Stadium (FB is The Stadium) - is slowing at an even sharper rate. "People wanted to buy Facebook, no matter what." [View news story]
It's always somebody else's fault that one made a stupid purchase, paid too much or executed a bad deal. And, one gets mad and finds somebody to sue (so, some lawyers can get rich). It's the American Way.
People who engage in this behavior would be better served buying a mirror.
Is It Time To Buy A House? [View article]
My only point was a technical one, i.e., one cannot have a "normal bell-curve distribution" and have differing medians and means at the same time.
How much a change at the tails makes to the median is directly affected by the steepness or shallowness of the curve, not by whether its "normal" or not. Flat distributions with large standard deviations are more impacted by changes in tail data than distributions with values congregated about the mean. In any relatively "normal" distribution with a very large set of data points, it's unlikely that changes in tail data will make a material change in the median or the mean unless there's a flood of new values which upset the normality, e.g., massive wave of foreclosures.
"Sell your house ... yesterday," Gary Shilling tells Bloomberg. It will take 4 years, he says, to work off still-high inventories, during which time prices could fall another 20%. Turning to Facebook: "(It's) the end of the social media boom ... reminds me of Pets.com." [View news story]
A few points:
1) I don't make deep involved studies of housing trends. I apply more simplistic logic. The charts which measure the cost of home ownership versus cost of renting are now at the crossover after many years of home costs being higher. Rents are continuing to trend higher. This will gradually apply upward pressure on home prices.
2) I, also, live in Florida (Sarasota), one of the worst-hit states in the housing crisis. Aside from numerous months of very positive data in Florida, I can see a boom in local home building, sales and related activity all around me, which puts some personal observance to the abstract data. I hear similar stories from friends elsewhere, not everywhere, of course.
3) Unlike many, who seem to think that anyone seeing opportunity in housing must have 100% of his portfolio in homebuilder stocks (what idiot does that?), I place my bets by making a diversified allocation in issues that benefit from housing activity . These include builders, suppliers, REITs, etc. Realty-related investments make up about 15-20% of my total portfolio. And, where possible, I buy common, preferred shares and convertibles that pay very attractive yields, so the timing of share-price rises isn't really critical to my immediate performance.
4) I am of the firm belief that if we see interest rates rise it will be because of a stronger economy and, also, that rising rates will lead more waiting buyers off the sidelines, as they will become apprehensive about losing low-rate mortgages. This will fuel further buying. Affordability is not retarding purchases, now, so increasing rates, still at ultra-low levels, will not have a major impact. Higher rates will also make lenders more willing to play ball.
Because I am a high-yield value-based investor, I look for out-of-favor sectors. I don't try to guess exact bottoms or how long it make take to recover. I am more interested that the shares I purchase are way below historical levels and that they offer substantial yields to alleviate the necessity for immediate price gains in order for them to be good investments.
I'm patient. It's always worked well for my strategy.
Is It Time To Buy A House? [View article]
"And this sample I gave you isn't a normal bell shaped distribution. In a normal bell shaped distribution, the difference is much more dramatic."
In a normal bell-shaped distribution, the mean equals the median, by definition.
"Sell your house ... yesterday," Gary Shilling tells Bloomberg. It will take 4 years, he says, to work off still-high inventories, during which time prices could fall another 20%. Turning to Facebook: "(It's) the end of the social media boom ... reminds me of Pets.com." [View news story]
People need houses. Nobody needs gold.
"Sell your house ... yesterday," Gary Shilling tells Bloomberg. It will take 4 years, he says, to work off still-high inventories, during which time prices could fall another 20%. Turning to Facebook: "(It's) the end of the social media boom ... reminds me of Pets.com." [View news story]
I meant, by "further way," not time, but valuation. The further below old highs we are, the more upside there is. That's why, when sectors languish, are at or near bottoms and everyone says "they'll never recover again" or "it will take generations," I get happy and buy stuff, especially stuff that pays nice yields, too. Then, I collect those oversize yields and wait.
It's a formula that works very nicely, much better than chasing the FaceBooks of the world, I can assure you.
ECRI Reaffirms Recession Call Again [View article]
That would be Phillips. Better place to go these days, if you get back there, is Crab Bag.
"Sell your house ... yesterday," Gary Shilling tells Bloomberg. It will take 4 years, he says, to work off still-high inventories, during which time prices could fall another 20%. Turning to Facebook: "(It's) the end of the social media boom ... reminds me of Pets.com." [View news story]
The classic overstatement in rebuttal. Nobody said we've had a "recovery." It's the direction that counts, not how far away from recovery we are. In fact, the further away, the better.
What's been evident is that inventory levels have dropped dramatically in many areas, sales volumes are increasing and prices have now made noticeable advances. This is all there in the data for anybody to see.
What will happen to housing prices when rates rise is that they'll be higher, as history has demonstrated conclusively for many, many decades. The notion that home prices are inversely related to interest rates is a subjective concept invented in the latest crisis, but unsubstantiated by any historical data.
It's fine. You prepare for ever-worsening conditions; I'll buy undervalued sectors, as I've done for a long time, and it's provided a very comfortable living, so far.
"Sell your house ... yesterday," Gary Shilling tells Bloomberg. It will take 4 years, he says, to work off still-high inventories, during which time prices could fall another 20%. Turning to Facebook: "(It's) the end of the social media boom ... reminds me of Pets.com." [View news story]
Or, you can look at the trend in volume and pricing of realty, as well as the cost-comparison data versus renting, and invest accordingly. Or, you can choose to be scared witless by pundits, like Shilling and Schiff, who only preach the end of the world nonstop and without regard to what's happening, good or bad.
"Sell your house ... yesterday," Gary Shilling tells Bloomberg. It will take 4 years, he says, to work off still-high inventories, during which time prices could fall another 20%. Turning to Facebook: "(It's) the end of the social media boom ... reminds me of Pets.com." [View news story]
"Sell your house ... yesterday," Gary Shilling tells Bloomberg. It will take 4 years, he says, to work off still-high inventories, during which time prices could fall another 20%. Turning to Facebook: "(It's) the end of the social media boom ... reminds me of Pets.com." [View news story]
The Achilles' Heel Of The U.S. Economy [View article]
For all the blather about "self esteem," there's a large contingent of folks who are happy to settle for a handout and an iPhone.