Tabs, what's the smart money doing?
 

Where is the smart money going if it's being pulled out of the stock market and real estate. I know you like collectables; is it time for the swing to collectables and art to happen?

Or is the smart money really battoning down the hatches and buying gold fearing a recession in the US?

Blue horseshoe loves MOT.

If everyone is pulling out of RE, then its time to start putting into RE. If that doesn't work for you, there's always hookers and blow :D

Great question, I was just going to post something along this line. I'm down about 10% from the high of late last year, but still up about 5% from where I was on 1/07. I was watching two fund managers on MSNBC this afternoon, and one was a bear guy and one a bull guy. The bear guy basically said the market is given the investor a "gift" right now that they should heed, its slowly headed down and its a warning before it drops 3-4,000 points (Yikes!). The bull guy said buy gold, neither of those are very good endorsements.

I do my own through Schwab. I've seen the weekly and monthly swings in the markets get greater and greater in the last year. It used to be up 10 pts. down 19, up 12, down 5. Now its up 300, down 200, down 200 up 175. Much greater volatility. Any professional money managers/stockbrokers out there with any thoughts, rationale? BTW my retirement time horizon is about 11 years. Some analysts are predicting a 25-40% further drop in housing, could that be possible? My house value in today's market is about 2.5x what I bought it for, so I'm not too worried about that.

Diversification is the key between both R/E and stock mt.
keep the egg's in a few baskets

Motion:
If there is a return on hookers and blow, I'm in.;)

Collectables remain strong. Next year Mother says the Bull returns in the SM.

RE is still way overpriced and will likely be toxic for at least the next two years. Maybe more in some markets, maybe less in others. YMMV.

There is still a helluva lot of money to be made in the stock market. Put options are just as good as call options. As long as the market is moving and not flat, there's lots of money to be made. The direction (up or down) doesn't really matter.

there's always money to be made from hookers. Need a brothel. Actually an offshore oil rig converted to a high roller casino with free hookers and booze.

Scouts or Travelalls?

I'm going with Wayne and Mother on this one.

Don't buy until you see the whites of their eyes. I'll teach you eventually, old grasshopper.

I do agree with you in general. Zigging while others zag has been good for me, indeed.

Your going International...with the $$ being so low in value..your late to that party. The $$ at some point is going to rebound...and you will be caught with your international..

RE is dead, dead dead...and will be for some years to come. Bonds, interest rates are going lower...so any margin you have their is small.

Commodities...yeah I suppose there is still some room there.

Collectables...remain strong, how much higher they will go is a good question??? If you look for bargains they can be found..I see a plateau for collectables...

Oriental rugs seemed soft last year...this year they have popped up in price, either that or I'm picking better stuff. at least to bid on.

I will be contrarian and stick with stocks and real estate.

Collectables, I think there will be some good deals on nice watches this year, little things some people overspent on.

Wine.

Money to be made overseas, ignore it at your own loss. Several international markets have done/will do well.

USA stock market will react (good/bad?) depending on whom is elected in Nov.

Prepare to move some money into cash. Why? Depending on where you live,
within 12 to 24 months you will WANT to begin purchasing up those heavily discounted real estate ...BARGAINS. Location. Location. Location!!!!

The swing to international may be over. Credit Suisse says buy U.S.
http://www.marketwatch.com/news/story/credit-suisse-first-time-decade/story.aspx?guid=%7BEDBD27E6%2DD5D5%2D4357%2D9795%2 D85C4C3E18A9F%7D.

I am having a real problem with all of the paid market sector predictors. There seems to be more of the "pump up and dump" strategy.

John_AZ

Personally, I am slowly nibbling on good growth companies that are selling at bargain valuations, offsetting w/ index shorts. My goal is to not lose much money in down market and have a portfolio of undervalued stocks when the market turns up. Favoring early cyclical sectors and some tech. Avoiding financials simply because I don't understand them, so can't distinguish the good buys. "Bargain" to me means at a multiple similar to early 1990 levels, liking <10X PE names. Am thinking - or rather hoping, not have a strong argument - that market bottoms in 2H08 ahead of economy bottoming in 1H09. I am avoiding high-priced stocks with momentum, the shorts are going after them and I expect 8 out of 10 to blow up before bear market is over, tough to pick the right 2.

Disclaimer: Your mileage may vary, no guarantee mine won't suck, and I don't care if it takes me 2 years to see a profit.

I don't expect real estate to bottom for another 2+ years, and don't expect it to go up much for another couple years after that. Except in San Juan Capistrano of course.

Am wary of international markets because Europe and Japan economies are rolling over. Haven't figured out Chinese stock valuations - been looking at some trading at 60X revenues! Do you expect emerging economies to decouple from G7 economies, I'm skeptical of that.

Welcome to the Internet and the short attention spans that come with it.

Bubblegum...invest in Bubblegum

John, I like you're activity. Buying undervalued growth is a great plan.

My personality tends towards the value side. Are you bearish or neutral on value?

Jurgen,

I don't have much opinion on value vs growth. I leaned toward value when I was focused on large cap stocks, of course that was when value was having a multi-year run of outperformance. Now growth seems to be outperforming, if you can call it that, and I'm focused on small cap stocks where valuation support seems less firm, to say the least. Anyway, the declines are taking most stocks down hard, so if I can buy a growth company at a near-value multiple, why not.

This market is acting awful. I don't recall if I posted about the historical declines in the indicies into recessions, but anyway I think there is a considerable ways down to go. Which is what you've been looking for all along.

Dow will get well into 4 digits.

Short the index.

I'm with you.

There are some areas that aren't as hard hit by the RE fallout. Right now we're on the hunt for investment properties in the midwest. Interest rates vs low prices make it a bargain. Not that interest rates are even a big player for someone who is going to flip the property in 8-12 weeks. I have one on the hook now. I'll clear 60k in 8-12 with only a 50k investment. Yeah - there's sweat involved. The real kind, not the worrying kind.

What is they say about stocks - for every winner there's a loser? Right now money can be made, but it's not fish in a barrel like before. Gotta be smarter than the next guy.

If by collectables you mean the Ferrari 330 Berlinetta that you've been hanging onto for 10 years, yeah, I suppose you will get rich off of that. If you mean stuff on Ebay, only Paypal will get rich off of that.

Point made by one analyst was that (some) stocks are still fairly valued after the crush of the recession in 01. They are perhaps prepared for the upcoming consumer-led recession. On the other hand, if consumers slow spending, what happens to earnings?

I am at a crossroads. I may never reinvest my cash in the stock market outside of tax-deferred accounts. I may go long RE and try to make the transition into commercial RE. I see high single-digit to low double-digit returns + full control + favorable tax treatment and perfect information. Flip side--I'd nibble on BRK if the price dropped another 30%.

I haven't seen enough bearish sentiment yet, but it is rapidly changing.

Cash and Fixed income. Stay away from risky stuff. Stick to AA or Govt Bonds. In 2 weeks we wiped out last year... The next stop for the S&P is 1,200....

5y treasury is yielding 3% right now (ouch), 5y swap rates (proxy for 5y deposits) are at 3.60%

There are some interesting structured product avaliable out there in FI.... I would not touch the stock mkt right now.

Silver spoons chasing....spoons.

I'm with you on all of that. (Although I think it's still early to go long RE).

In what cities are you seeing "high single-digit to low double-digit returns + full control + favorable tax treatment and perfect information?" What kind of commercial are you thinking about?

I'd like to see SPX <1240, -20% from highs - wipe out 2006 as well as 2007.

Well, I wouldn't "like" it, but you know what I mean.

SPX has fallen at least -15% into every recession since WW2, except one.

Don't have an analytical argument why it falls that far (vs not as far, or vs farther), just looking at history.

I also believe it is too early to go long RE. The primary reason is the collapsing lending market. I don't want to blow the cash now, knowing that future deals will be compromised due to tight lending conditions. 20-30% down on several commercial deals would sap my bank account quickly.

I am mainly hunting around the Memphis, TN area. A recent listing (multi-tenant office space) is listed at 9.0 and 9.78 CAP rate. My interest wouldn't grow until that reached 11, implying a 15-20% drop in price.

I keep hearing about the impending downturn in CRE, but I don't know how it will affect pricing for the properties I want to buy.

-20% SPX would put prices at the point at which I sold everything, Aug/Sept 05. Stating I was too early is a staggering understatement. ;)

I do like chasing quality names, though. If the company is quality, it's worth holding for the long-term. Therefore, timing the bottom isn't critical.

LOL, again, I'm with you. I was a little later, but not much.

Hmm...you had previously indicated that you were in, and had been in for quite some time, an index fund. Don't you recall your words "any dummy can do it."

When did that all change?

Isn't an index fund usually nothing more than a bunch of stocks?

At this rate, we'll be there in no time. Arrgh.

We should stop bad-mouthing the economy. Such gloom and doom is sure to propel the Dow below 10k and the S&P to terrible depths.

You prove me wrong. Obviously, you are clearly a dummy that could not do it. A stock index fund is; surprisingly enough...composed of stocks.

No no - keep it up. I may have some cash to buy stocks with soon & I'd like to have some real bargains out there.

Been doing VERY well with this....

I no longer have a clue about anything and am at the mercy of whichever way the winds are blowing.