A celebration of the stock market by Jay Walker, author of The Brink's Truck Burst Open on Wall Street! A Holistic Approach to Finding The Easy Money In Common Stocks.
Facts and ideas on how to outperform the general market, portfolio management and risk, with a growing focus on how climate change should affect your investment strategy. All wrapped nicely with a value-oriented investing bias.
Wednesday, July 25, 2007
Be vwery careful, vwery, wwery careful ... more on real estate and subprime time
As Elmer Fudd used to say ... be vwery careful ...
About investing in real estate or the subprime mortgage market. You know, just like NASDAQ circa 2000, it took speculators a long time to be convinced that, yes, things were really as bad as they seemed. And that was in the technology stock market, with its hyper-frenetic pace.
Image how long it'll take for *everyone* involved in the real estate market to realize the same. Today, it's just the subprime lenders who are depressed. Tomorrow it's the prime lenders ... and sometime thereafter ... by the real estate speculator ... then to be followed by the real estate investor ... to be finally ... finally ... followed by the deep-pocketed developer/builder.
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When even all those deep-pocketed guys can think about is surviving, then it's time to buy. And only then.
As I suggested one year ago, real estate debacles of this nature (i.e. free money from Greenspan) will take a long, long, time to boil off - expect market declines in coastal regions to continue for years. In farm country, however, things will be vastly different for several reasons.
Sit tight investors ... patience is now key if you're thinking of sub-prime investing (wait two years), or real estate developer/builder investing (wait three to five years). Yes, it takes a long time for this to unwind and people to become truly depressed about the future ...