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.
Historically High Affordability A Major Factor In Housing Rebound This Year [View article]
Hammer:
We may share more than you think.
I want less Government, not more. Less "gatekeepers." It doesn't matter whether something is overpriced or not, as regards each individual's ability to say "yes" or "no." They just IPO'd FaceBook for an absurd value. Nobody made me buy any, and I didn't. Those that did have only themselves to blame.
I am an enormous proponent of individual responsibility, and that includes assessing and making decisions about the world, as it is, not as some wish it to be in some Utopian fantasy. We live far too much today in a nation where everybody wants everything to be 100% "safe" and guaranteed to have a positive, happy outcome, without any necessity for work, thinking or making decisions. This nonsense cannot persist in any society which aims to maintain its health.
Historically High Affordability A Major Factor In Housing Rebound This Year [View article]
Hammer:
The Fed can create currency as long as it deems necessary, whether we like or agree with it, or not.
Yes, appraisers are being especially conservative, and it's been the factor killing many financings that otherwise would have transpired.
"Gate keepers?" Please. Let's allow a market between willing buyers and sellers determine the market price, not some third-party hack with an opinion and personal butt to cover, nor the government, or anybody else. I want to sell my house to you for $X and you agree that's a fair price for you, then, that's the market, period. We have far too many "gate keepers" in our society.
In real life, people are free to agree to make a deal or not. The only "corruption" is in their occasional poor judgment, but they only require a mirror for that, not a nanny.
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.
Historically High Affordability A Major Factor In Housing Rebound This Year [View article]
We may share more than you think.
I want less Government, not more. Less "gatekeepers." It doesn't matter whether something is overpriced or not, as regards each individual's ability to say "yes" or "no." They just IPO'd FaceBook for an absurd value. Nobody made me buy any, and I didn't. Those that did have only themselves to blame.
I am an enormous proponent of individual responsibility, and that includes assessing and making decisions about the world, as it is, not as some wish it to be in some Utopian fantasy. We live far too much today in a nation where everybody wants everything to be 100% "safe" and guaranteed to have a positive, happy outcome, without any necessity for work, thinking or making decisions. This nonsense cannot persist in any society which aims to maintain its health.
Gold: The Fate That Awaits Once Fed Stimulus Ends [View article]
The Second Amendment wasn't created to protect America from its foreign enemies; it was created to protect its Citizens from its own Government.
Historically High Affordability A Major Factor In Housing Rebound This Year [View article]
The Fed can create currency as long as it deems necessary, whether we like or agree with it, or not.
Yes, appraisers are being especially conservative, and it's been the factor killing many financings that otherwise would have transpired.
"Gate keepers?" Please. Let's allow a market between willing buyers and sellers determine the market price, not some third-party hack with an opinion and personal butt to cover, nor the government, or anybody else. I want to sell my house to you for $X and you agree that's a fair price for you, then, that's the market, period. We have far too many "gate keepers" in our society.
In real life, people are free to agree to make a deal or not. The only "corruption" is in their occasional poor judgment, but they only require a mirror for that, not a nanny.