That’s the rub Rich, they don’t TELL you what area. they just make a blanket statement.
I’m in Rhode Island, are your local realtors playing the “Don’t listen to the NEWS” commercials in Conn?
I LOVE THEM!!!
When things have gotten SO BAD that they have to run radio and TV spots BEGGING people NOT TO LISTEN to the NEWS about the housing BUST. It just warms my little contrarian heart :smile
AGAIN…PERCEPTION BECOMES THE REALITY!!!
I haven’t seen those commericials but I’ll keep an eye out. Mostly in my area I just see them disseminating fluff to newpapers for articles.
They’re running those ads here. Something like “there’s never been a better selection of houses to choose from”. Completely true, btw, since there’s a year supply of houses on the market and prices are dropping!
Mike
A-friggin’-Men!
Share the numbers with the noobs so we know what a great deal looks like? 
Share the numbers with the noobs so we know what a great deal looks like
6 unit apartment building.
Gross Rents of $2,300
Purchase Price $30,000
Upgrade electrical system $7,500
That’s it.
Mike
Wow… a 6-unit for 30k? With a ridiculous amount of cash flow? I really do need to work harder…
If you ever get turned down for a loan, let me know
Propertymanager (Mike),
AFter seeing you post that 6 family deal you have me ashamed to post my latest deal…lol…Nice score on your part,if it wasn’t you posting it I wouldn’t believe it…
As for these credit plays I’m averaging into these closed end funds for a longterm hold…I’m not playing the homebuilders yet…But I feel CFC,WM,FRE,C are all longterm buys…Keep in mind after this blows over you will look smart…Remember the saying…Be greedy when others are fearful and fearful when others are greedy…When it comes to these REITS and closed end funds and banks,builders there is fear…Bigtime…Stocks DO NOT lose %40-%50 in a few weeks and go unnoticed by the experienced investors…Buy em when they hate em…
rookieNYC,
Yes, some of those beaten down stocks will look good in the long run, no doubt. I’m just not sure we’re even close to the bottom, especially if there is a big recession. I’m shorting the rallies.
Mike
NVR is going to be a good one soon…I think it’s still got some slide left. 52 week high $851.22, now trading at $516.00
NVR, Inc. (NVR) is engaged in the construction and sale of single-family detached homes, town homes and condominium buildings. NVR also operates a mortgage banking business. NVR conducts its homebuilding activities directly, except for Rymarc Homes, which is operated as a wholly owned subsidiary, and its mortgage banking operations, which is operated primarily through a wholly owned subsidiary, NVR Mortgage Finance, Inc. (NVRM). The Company operates in multiple locations in 13 states, primarily in the eastern part of the United States. Approximately 37% of its home settlements during the year ended December 31, 2006, occurred in the Washington, D.C. and Baltimore, Maryland metropolitan areas, which accounted for 52% of its homebuilding revenues in 2006. The Company’s homebuilding operations include the construction and sale of single-family detached homes, town homes and condominium buildings under four trade names: Ryan Homes, NVHomes, Fox Ridge Homes and Rymarc Homes.
I'm shorting the rallies.
To say the least…the Dow has been pretty interesting to watch for the last 2 to 3 months.
It’ll march up 150 points…then gets hammered down 230.
I’ve seen this kind of occurance about 10 times now.
How do you short a rally?
-Mike
Hi Mike,
Shorting just means selling a stock you don’t own.
We’re now in a bear market in the DOW. So, you find a stock that is near upward resistance and as a rally brings it up to resistance, you short it. Then, after the price drops, you buy it (to cover your short position) at a lower price. It’s the opposite of buy low and sell high - sell high and buy low.
Mike
A friend of mine who daytrades told me once that he makes a lot more money when things go down…than when things go up.
I don’t know, but I’m assuming it would be possible to short a stock over a longer time frame…like 3 to 5 months or longer.
That got me thinking that someone who would have thought to short Centex in the past year would have done pretty good.
I suppose the same could be said for something like a Chinese Index Fund which is probably still showing an Everest incline.
Just wonder what the risks are if you short something like this but it continues it’s climb for a lot longer than what you anticipated.
-Mike
The issue though with shorting is there is infinite possibility for loss. If you buy a stock the worst that can happen is that the price drops to zero and all of your money is gone. When you short you lose money when it goes up, a stock’s price can go infinitely up losing you quite more than if it were to drop to zero.
Example:
You buy a share at $50, it drops to $0- You lose $50.
You short a stock at $50, it goes to $500- You lose $450.
You short a stock at $50, it goes up to $5000- You lose $4550.
Shorting can be a great way to make a ton of cash if you’re careful and know what you’re doing. It can be a terrible thing if you aren’t smart about it. When you short you are working under the assumption that the run you see is short lived and the stock will come back to reasonable prices in the near future. Sometimes that seems likely but it doesn’t happen, like with Google. Many people thought each rally it had was short term and that it had to come down. It couldn’t keep going up. Could it? It’s retreated here and there lately but it’s still way up from the $500 range and I’m sure people shorted it there.
Question…I have 20K in a franklin templeton growth fund…I’ll be 50 next year…what do I do? Keep the money where it’s at or do something else with it?
That money is a key part of my retirement (don’t laugh, but that’s just the way it is).
bcampbell,
Only you can answer that question…How much risk are you willing to accept…If its a key part of your retirement then I’m asumming not much risk…
If you have to ask HOW to short a stock you have no business doing it.
Here’s the deal with shorting stock… First off, brokerages don’t let just anyone short stock. Your basically borrowing stock with the hope that it drops in price. The theory is you borrow 100 shares of Toll Bros. at $20. the price drops to $15 so you then BUY it and replace the borrowed 100 shares you got at $20 with the newly purchased stock you OWN at $15. You make $5/ share.
Here’s the problem…If that stock goes to $50 you get a phone call from your brokerage firm demanding that you put X amount of money in your account to cover that position. Most of the people who do this have EXCESS money in their account and it gets balanced automatically. (most brokerages REQUIRE THIS)
You can lose your @ss doing this.
Here’s a much more RELIABLE way to make money. it’s boring, it takes a long time, BUT IT WORKS!!
BUY THE SHARES OF THESE HOME BUILDERS OVER THE NEXT YEAR!!!
Here’s why it will work…I, nor anyone else here, knows when the BOTTOM will occur in the home builder segment.
I COULD CARE LESS ABOUT THE BOTTOM.
I’ve been buying these stocks for the last 4 months. I plan on continuing to buy for the next YEAR. Why ??? Because IF the price on those stocks keep falling I AM ACCUMULATING MORE AND MORE EACH MONTH. Let’s say I buy 1000 shares of Toll Bros. at $20 in November. ($20,000)
I buy another $20,000 worth in May at $15. I now have 2333 shares with a average holding cost of $17.50. I got MORE (extra 333 shares with the same $20K) Let’s say things REALLY get bad and the stocks drops to $9. (remember WE DON’T KNOW where the bottom will be, $17.50 might be it) My goal is to accumulate 6000 shares of Toll Bros. If the price continues to drop I AM GETTING MORE SHARES!! Let’s say it goes to $9 and I buy all in with 4000 shares. 5 years later Toll Bros is back in the mid $30’s. Then I sell…
Here’s how it turns out. My total buy in is $76,000
I sell all 6000 shares at $35 for a grand total of $221,655
THIS is why I NEVER try to pick bottoms. Picking bottoms is a waste of your time. Accumulation is what you want to accomplish. If the cycle is still down that’s OK. Your reward comes years later when everyone has forgotten how cheap that stock was.
I guarentee I make more money than most people farting around trying to scalp $2 or $3 dollars a share with these day to day price movements. The probelm with that is YOU CAN NEVER be right all the time. At some point your getting wiped out because a mini rally or pull back occurs and your on the wrong side of it.
LOOK FOR THE BIG TRENDS AND GET IN BEFORE THEY ARE ALREADY IDENTIFIED!!!
Right now the big trend is HOME BUILDERS SUCK! That’s all I need to know to LOVE HOME BUILDERS STOCK. When no one else wants it I’m a BUYER!!! All the time, EVERYTIME!!
The majority of people look at the stock market as a LOTTERY ticket. They think that some tip or advice from a stranger will make them money. IF it does, it is absolutley no different than thinking that you hit on a slot machine because you forgot to brush your teeth that morning. Investing SUCCESSFULLY in stocks requires 70% pyscological discipline and 30% intestinal fortatude to do the EXACT opposite of what common sense tells you to do. The 70% comes in because you will be bombarded with advice on why your plan will NEVER work. I been doing this for a while. After so many years those comments now make me sleep good at night. I WANT people to think I am throwing my money at a LOSER.
Go home tonight and tell your wife you think you should buy all the home builders stock you can afford. You might as well tell her your Superman while your at it. Her reaction will be the same.
EVERYONE here should do just ONE thing before the end of this year.
Go out and buy your kids 10 shares of a home builders stock. Actually get the stock certificates. It makes it harded for you to sell the stock so your more likely to hold on to it. THEN WATCH IT over the next 4 to 6 years.
TRY IT, YOU’LL LIKE IT.
Then repeat!
The same thing works for shorting that Pete explained above when he’s buying on the slide. He’s buying because it’s low and he knows it will go up, if it dips more he picks more shares up and lowers his dollar cost average. You can do the same shorting. If you just shorted some shares and soon after the price when up even higher in the stratosphere you can short some more if you are confident it will go down.
As he said many brokerages won’t do it for just anyone and you generally need a lot of cash available in your account to cover losses. I think generally this is a percentage of the total trade, ask your broker for details.
Great example Pete…thanks for sharing.
-Mike
I guarentee I make more money than most people farting around trying to scalp $2 or $3 dollars a share with these day to day price movements. The probelm with that is YOU CAN NEVER be right all the time. At some point your getting wiped out because a mini rally or pull back occurs and your on the wrong side of it.
I disagree with this. There is a big difference between a long term buy and hold strategy for stocks and stock trading. Stock trading is like flipping houses. You’re making your money on the transactions. Buy and hold is like buying a house and speculating on appreciation. If you’ve done your homework and are right, you can make a lot of money. However, you can certainly be wiped out with buy and hold also, when a company goes bankrupt.
The key with trading is that you MUST have discipline and put stops in when you buy. If the trade goes against you, you must get out with a small loss. “Cut your losers and let your winner’s run” is the appropriate stock market jargon.
Keep in mind that stock trading is a lot more volatile than investing in real estate. Things move faster and you have less control (because someone else has control of the company whose stock you own). I trade stocks as a hobby and for extra money, but I certainly wouldn’t give up my rental business to trade full time (unless I were going to be a Wall Street trader).
I also disagree that shorting a stock is any riskier than going long a stock. I trade stocks both ways on margin and I don’t perceive either as more risky than the other. It is true that a stock you short could go way up and you would be in trouble. It is also true that a stock you are long could get cut in half because some accounting dufus screwed up a quarterly report or there is any other scandal. In that case, you’re also in trouble.
Mike