Well 1st I would have some common sense. this topic isnt a how to make money thread.
2nd READ - theres 100’s of great thread with countless information on this site.
3rd - go out and do it.
4th -your asking about how to build your portfolio. put some money in and buy a stock you choose. i dont think the thread said FDJake financial advisor stock picks.
your posts are quite frankly annoying.
1.I realize this thread isn’t a how to make money thread, however it’s also not a “carlton sheets, beginners” thread is it? which is the subcategory it’s in right?
I have been reading, I always read and will continue to read. I haven’t just got back from a Neuveau Riche seminar begging for teachers.
I’ve been networking like crazy for the past 3 months, getting contacts and making sure I’m doing everything right before, I take action, so that i don’t make a blunder.
I never said “OH MY GOD JAKE PLEASE HELP ME!” did i? if I did please tell me where. I just didn’t want this thread to be a “oh my god leave the country it’s going to hell” thread. I wanted this thread to have a more balanced light so it wouldn’t scare people away.
I’m not sure if my post came across as “beggar”-ish, condescending, or Immature or whatever. But that’s not how I intended my posts to be. However now that I’m aware that my posts “quite frankly annoying” I’ll try and not be so annoying in my future posts.
Thread title: Now We’ll all see just how connected Wall St is to Main st.
Right? reading that thread title, and being in the beginners forum I’d assume it’d be a what’s going on, how it’s affecting us, and how you can help yourself. He’s done those things, but the solutions are geared towards an older generation and I just wanted some balance on what young people should do, as being a forum, I’d assume a lot of young people come by here.
Lastly, I’m sorry if I offended you in some way, sometimes I’m blunt and don’t word things very well. However I hope this cleared up my intentions. (although it’ll probably just make things worse -_-)
Mike
you’re diffently are a good real estate investor but you’re very wrong about stocks. an appraised value has no money behind it. every share of stock has money attached to it. I couldnt go the appraisers office with my home appraisal and ask for the 150,000 for it now can i ? you bet your ass i can get $150,000 for stocks worth valued @ $150,000.
how does stock prices move mike ?? buying selling shorting move prices so yes people lost money today. stocks dont move for no reason.
and you say we’re in a bubble in the stock market ?? there is bubbles in the stock market. commodities i mention i think on here a few months ago has been a huge bubble and is now deflating. i dont think its over priced 2,500 points at all. The cluprits of this mess the financials have been adjusted accordingly and are still.
I think your delusional if you think you’ll be fine and your business will be fine if we do go into a depression.
I agree with not having entitlements for people who just dont want to work. but let me ask you a question where would these people get jobs right now ??? they wouldnt. you know what they would do. they’d rob YOU !! and you already know it. Your the rich landlord to them. thats why you carry a fire-arm isn’t it.
Keatonus
ok this is the most important thing for real estate investing right now, CASH do you have any ??
actually this isnt really the thread you want for advise on getting started. this a topic about our financial crisis of the country which plays into evey aspect of life including real estate.
Well I don’t really plan on buying REO’s. I’ve been heavily reading on buying on lease options and Sub2’s, and networking with people in my area who do the same thing. Then I plan on building up the Cash to do the big things.
yeah, that’s what I meant, I’m trying to avoid the big mistakes.
Thanks for your patience Liquidity =]
To stay on Topic. I’m not really sure why they didn’t bailout the companies, just as long as they do it right. I think we should lend the taxpayer money to the companies to get them back off their feet, tell them to rewrite their business plans, then collect our money back with interest and give the taxpayers back a nice little check. I know that sounds optamistic, but it’s better than a depression =/
you're very wrong about stocks. an appraised value has no money behind it. every share of stock has money attached to it. I couldnt go the appraisers office with my home appraisal and ask for the 150,000 for it now can i ? you bet your ass i can get $150,000 for stocks worth valued @ $150,000.
Yes, you can get $150,000 for stocks valued at $150,000 IF YOU SELL IT NOW! Yes, you can also get $150,000 for a house valued at $150,000 IF YOU SELL IT NOW! Of course, it takes longer to sell a house than a stock and houses aren’t as liquid, but the principle is the same. Both house values and stock prices change and you can only lock in any specific value by selling and getting the cash.
My larger point is that the DOW is not worth 10,000 plus. It is overpriced when you consider that many of these companies are BROKE and when you consider that the nation and consumers are broke! If the nation is really entering a Depression, it’s probably not worth 5,000! Wall Street is living in fantasy land. As I sit here typing this morning, DOW futures are more than 300 points above fair value. Did someone sprinkle magic pixie dust on the credit markets overnight and now everything is good? If not, then why would the market open more than 300 points higher? The answer is that the stock market has no relationship to reality. If you bought at the low yesterday afternoon, you’re in for a huge profit at the open! You see, the market isn’t really bad - it’s great! Also, IF the market closes much higher today than yesterday, that’s just more proof that a bailout isn’t needed.
I think your delusional if you think you'll be fine and your business will be fine if we do go into a depression.
I didin’t say that my business would be fine if we go into a depression. My business would be at increased risk, just like most other businesses. I believe that the greatest risk to the rental business will be the government. Could they pass a moratorium on evictions? Yes! Could they dictate rental rates? Yes! Could they require accepting tenants regardless of income or employment? Yes! All of these things could destroy my business in a very short period of time.
On the other hand, in my opinion we need a REAL crisis to bring this country back to the right path. We’re currently on the fast track to socialism and having a depression would certainly be worth it, if that would provide the shock that the country needs to get back to capitalism; to get back to saving; to get back to reality! The sooner it happens, the less painful it will be.
I agree with not having entitlements for people who just dont want to work. but let me ask you a question where would these people get jobs right now ???
I don’t care! The point is that people don’t have a right to my money and I don’t have a right to theirs. Our country wasn’t built on socialism, but the socialism of the past few decades is destroying it. I’m sick and tired of paying for the MILLIONS of people who are LAZY and want to sit on their butt and do nothing. It’s time to pull the plug. If they don’t want to work, they don’t have to eat. It’s their choice.
Mike
There are plenty of jobs available for those who want them and are willing to work.
The problem is that these people who are recieving the entitlements don’t want to work. They don’t want to go take a job at a fast food restaurant and work. The jobs are out there.
Yep, exactly. I see Help Wanted and Hiring signs all over the place whenever I’m driving. I’m in Mike’s camp on this one (although I still think the fdjake and others have many good points in their camps), in that Americans are a bunch of lazy sh!ts and just want the get quick rich “scheme” offered by Nouveau Riche. Ack! Did I just speak that which cannot be spoke on REIClub??? :banghead2 :lol Haha! A “Great Depression” is not the end. Did the world cease to be in the last one? No! It forced people to rise up and accomplish and become great. Times were tuff, yes, but the end result was well above and beyond the prior losses.
Dean
You see, the whole crisis was just a big scam by Wall Street to extort money from the middle class. Even though we’re supposed to be on the verge of a depression, the DOW rallied nearly 500 points today.
Liquidity,
You see, that Trillion dollars that you thought was lost yesterday is magically back today. I hope you sold so that you won’t lose if it goes back down.
Mike
Mike,
Seriously…
That Trillion is GONE buddy. Those prices quoted on that big board ain’t people THINKING about selling…They are stocks that have SOLD!!!
That money NO LONGER EXSISTS.
That money NO LONGER EXSISTS.
C’mon now - you’re making my head hurt. You know as well as I that the money didn’t disappear. For everyone that sold yesterday, another person bought. That money isn’t gone, it just changed hands. Moreover, while the prices yesterday were actual trades, anyone that held their stocks over the past two days hasn’t lost a penny. They won’t lose anything unless they sell. In fact, if they hold one more day and the market is up tomorrow, they might even make a profit (if they sell, of course).
Mike
Mike,
Those sales yesterday were at HUGE volumes and they were REAL.
Where do you think all the money went that was in Lehman, Bear Stearns, AIG, Wachovia, ect.
These stocks were in the $20’s and higher 3 MONTHS AGO!!! Now they are basically worthless. MILLIONS of people bought those stocks when they were in the $50’s!!! I let you tell them their money isn’t GONE.
Where’s all the money that was spent on homes that were purchased at $300,000 in 2005 and now are foreclosed and selling for $150,000??? Those people didn’t sell. The MARKET valued those homes in 2008.
Where’s that money Mike???
AGAIN…THAT MONEY IS GONE. Just like that $1.2 TRILLION is gone!!!
If I buy one of those $300,000 homes for $150,000 today. I don’t get that EXTRA $150K that has VANISHED into thin air. What happens Mike if I buy that house for $150K and NEXT year it’s worth $85K. Where did THAT money go??? What happens if for some reason our economy is 10 times worse than it is now and I need to sell that $85K house for $50K…Where did that $35K go???
Let’s look at Home Depot…that stock was $80/share 6 years ago. It’s now in the $20’s…Are you trying to tell me people who bought that stock at $80 haven’t lost money??? Let me tell you…THEY ARE THE LUCKY ONES!!! Because if anyone was dumb enough to ride that DOG from $80 to $20 HOPING that HOLDING it FOREVER would get then EVEN…
THEY LOST!!! Because they are HOLDING something they paid 4 times it’s current value for.
Mike
stock values and appraised home values are 2 different things. You know that. I think what your trying to really say is that the stock market is over valued. maybe a little, maybe a 1000 points now. but wait until next year 2 qtr and it will be more in line with reality.
the market went up today almost 500pts -yes but the government caused that crash yesterday. that wasnt the free markets at work i’ll tell you that much. It was pure PANIC. Today cooler heads realized this is the time to buy again and that bill will be signed.
The government rejecting that bill was pearl harbor on the stock market yesterday.
thats the best explanation i can give for it. everyone thought it would pass and it SHOULD !!!
Those sales yesterday were at HUGE volumes and they were REAL.
We’re just talking semantics here. If your claiming that the market lost 1.1 Trillion dollars yesterday, then it gained back 690 BILLION DOLLARS today. Did individuals and individual companies lose money yesterday? Yes, just like every other day. Did individuals and individual companies make money yesterday? Yes, just like every other day.
Where's all the money that was spent on homes that were purchased at $300,000 in 2005 and now are foreclosed and selling for $150,000??? Those people didn't sell. The MARKET valued those homes in 2008.
Yes, those homeowners lost money because their houses sold, albeit not because they chose to sell. They bought at $300K and sold at $150K, even though it was through a foreclosure sale.
I bought a $52,000 house about 3 years ago for $20,000 (including rehab). Just for argument sake, let’s say that it is worth $45,000 today. Have I lost $7,000? No, my net worth at this moment decreased by $7,000 (from 3 years ago) but I haven’t realized any loss because I haven’t sold the property.
If a California investor paid $200,000 for a house in 1999 and it had a market value of $500,000 in 2005, has he lost any money if the value today is $300,000? No. He hasn’t lost a penny if he hasn’t sold the property. Even if he did sell the property at $300,000, my old fashioned math would say that he still made $100,000, not lost $200,000.
I think what your trying to really say is that the stock market is over valued.
Yes, I did say that directly. In fact, I think the market is WAY TOO HIGH for being on the verge of a depression…or is the market priced right and the great depression is just a scam?
Mike
A great depression needs a trigger. and this could be the trigger.
If it was not a possible trigger, the fed would have taken care of it by themselves.
Jake,
Obviously you are a smart guy with expertise I don’t have. My primary investment vehicle is rental property, not the stock market. However, I am intrigued by this discussion.
Perhaps you can clarify a couple of points for me. If the drop in the dow represented a $1.1 trillion loss, isn’t the loss to market capitalization? We don’t really know whether the owners of the stock that was sold actually lost money, do we? If they did lose money, how do we know that the amount of their realized losses are anywhere close to $1.1 trillion?
Let’s say for arguements sake, we just take the word STOCKS right out of this discussion. Stocks after all are just a representation of a company.
So to make this easier to understand lets make Mike a HUGE car dealer.
Mike has 5000 cars on his lot. He sells cars everyday. Once he SELLS them they get recorded on a big board. At that point someone ELSE owns them. 2 weeks ago Mike added up what his 1000 cars were all worth. Let’s say that number was $11 million. Well as of yesterday nobody wanted Mikes cars. But Mike sold anyway. The only way he could get ANYONE to buy them was to DUMP THEM. Remember that big board??? Mikes been having a tough year…1 year earlier Mike added up what his 5000 cars COST HIM and it was $14 million. So if Mikes 5000 cars COST HIM $14 million but are now only worth $11 million Mike is hurting. Now that 14 million is exactly the same as DOW 14,000 and NEW 11 million is the same as DOW 11,000. See even though Mike has been selling cars all along HE IS STILL LOSING WEALTH.
This is all nice to talk about…but here’s what your ALL missing…
THE PSYCOLOGY behind it… Real Estate IS NOT liquid. In reality , with current market conditions and lending, I’ll go one further and say that Real Estate is actually IL-LIQUID. There’s a whole BUNCH of people out there who would LOVE to sell their real estate BUT CAN’T… The point your missing is…With STOCKS you NEVER face that problem and there in lies the rub.
When you want OUT of a stock…you click that ENTER button a BOOM your OUT. THAT is what causes HUGE drops in values in a one day periods. Oh that money is REALLY GONE…It’s NO JOKE. Sure there are always people on the other side of the trade…BUT…Those people could own those stocks THINKING they’ve made a great deal only to see that money VANISH the NEXT day.
So how do you keep track of such a fluid market???
You TRACK DAILY PRICES!!! When those prices NOSE DIVE people are heading for the doors.
Hey if it truely was a ZERO sum game, NO ONE ever really make or lose any money. What was all the fuss about 1929. You can’t make the arguement that THAT MONEY REALLY WASN’T LOST because the INVERSE would also be true…then NO MONEY is actually ever MADE.
There is a GIGANTIC segment of this economy who are realizing that their money has VANISHED. These are the people Mike has said will be retiring soon and draining Social Security…Mike… these people are going to be doing everything BUT retiring. They’ll be WORKING until they drop dead behing their Home Depot cash registers because their 401k’s took a beating and Social Security IS NOT going to pay them enough to live on. Ask those people if that $1.2 trillion is REAL MONEY???
Mike…you know I have a TON of respect for you. I think you wrote THE BEST BOOK ever written on the rental business, and you consistantly give excellent real world advice here. The bottom line here is…WHO THE HELL KNOWS how this turns out??? I sure don’t…I’ll give it my best educated guess, but in the end that’s all it is…a guess. Either way…you’ll still be in business and so will I, and in times like this… THAT alone is an acomplishment!!!
What happens if JP Morgan assumed wrong on their potential losses with WaMu’s portfolio?
http://quicktake.morningstar.com/Stocknet/san.aspx?id=254457
Imagine that bailout…they’ve been buying everything.
I came to this forum as a RE student and as many know my profession is in the equity markets (option strategist)…Without being longwinded (I will leave that up to the very knowledgeable FDjake)…Comparing RE and equity markets is useless…These discussions I have addressed many times years ago here…RE is not a liquid asset…You can own millions worth of RE now and basically it’s worth whatever someone will offer you for it…Am I holding investment RE now?..You bet…Am I a buyer of investment RE here, you bet…But RE is as far away to being a liquid asset as one can get,right now that is…But equities are truly a liquid asset and when properly diversified can be a much more viable income/investment vehicle…There is a time to be bullish and bearish and I can say now is NOT the time to be overly bearish…When markets are soaring you get bearish and when markets are collapsing you get bullish…A saying my grandmother told me when I was 17 years (many moons ago) old pretaining to investing in general…“Sell when you can not when you have to”…Let’s not forget Warren Buffet’s infamous line…“Be fearful when others are greedy and greedy when others are fearful”…Fear is in the streets and you can bet RE is the last thing someone is thinking of purchasing right about now…
Jack Welch was on CNBC after Buffet made his $5 Billion investment into Goldman Sachs…Mr.Welch went on to say this is what smart people with money do in times like this…Buy quality beaten down companies at discounted prices…
To play into the gloom and doom NOW is nothing more than amateur thinking…I didn’t hear anyone on this forum complaining when RE and the stock markets were soaring…In fact I would guarantee that many people on this forum contributed largely to the financial mess this country is in…How many mortgage brokers,real estate agents and appraisers are on this forum that pumped overpriced garbage to people they knew couldnt afford it…Only caring if they closed the deal and made their commission…
This is why I have been keeping quiet as of late…I truly hope all those people suffer the most…To those people I say I hope you know how many innocent lives you ruined…Enjoy this prolonged depression you have created…
A little perspective that I once was given.
Most of us know that a million is a lot and that a billion is somewhat bigger, and a trillion is somewhat bigger yet: but think of it this way
If a million dollars was represented by a three foot high stack of 100 dollar bills…
A billion dollar stack would be over 1/2 a mile tall…
A trillion dollar stack would be over 500 miles…
A 700 billion dollar stack would be… oh you can do the math.
DB :anon