Gregmal

Yup. And what was strange was all the very deliberate attempts to control the narrative. The blatant lying. All trying to get people to part ways with their properties. Housing is crashing. Omg mortgage volume is down. Builders are impaired. Just blatant lies or misrepresentation. Like duh mortgage volume is down, so what, rates doubled! It was the greatest crash in history and what were the numbers last year? Basically flat-modestly up for national home prices. Most decent areas actually increased? Meanwhile really behind the scenes you still see crazy demand and still see JPM raising money for SFH and BX raising money for residential. I do think it’s been an effort to control the resources. Rents are cheap currently compared to owning which is why rents aren’t going down anytime soon. But much of this has been a total farce and the morons at the Fed are either ignorant academic schmucks or basically attempting to rig the game like they did in 2007.

In between you’ll have the Starbucks effect playing out as well. So much of the homebuyer base is filled with folks who don’t want Folgers ground coffee, they want a $2 K cup or a $7 Starbucks the same as they don’t want boomers 3500 sq/ft McMansion or the 1950s colonial on an acre. They want new build with 10 ft ceilings and a redonkulous kitchen as the home centerpiece. On the Fed, I think it’s both. You saw it firsthand amongst most of the wealthy circles last year. The hush hush “great reset” talk. Everyone cutting back spending, selling their stocks, battening down the hatches BEFORE rates hikes even started! There’s a certain nod nod wink wink element to all this corruption. So it’s great seeing all those people get left in the dust now with their cash and 5% CDs.

The Feds “mandate is to fight inflation” they say. 1/3 of inflation is housing. These geniuses employed thousands of economists and piss away billions of dollars annually paying these nimrods….and the answer to fighting inflation they come up with? Make housing even more expensive! And now, even after everything else has plummeted, not just stopped inflating, but deflated in many cases, they sit sit here and say the overall number, is still “stubbornly high” lol even though they’re the reason why.

Has nothing to do with the Glazers. No right minded individual parting with billions is going to partner with the Glazers as it would undoubtedly impair the brand and make it significantly harder to create value in an entity that only really gains value through its brand power. I’ve mentioned in the MANU thread but there’s a huge difference between Dolan and Jones and those guys. They never yank their fans around with false hope of a sale. It would totally shock me if the Glazers put this out there in such a fashion, got the hopes up, and then backed out. There would definitely be riots. It’s would massively damage the brand.

Yea the setup was visible from 100 miles away. -Sour the population on housing…check -Under build for a decade…check -Pandemic reminds everyone why they love them some space and a backyard -low rates and a big liquidity boost flush out the remainder of the past decades inventory -load up homebuilders with 2 years worth of order backlog -raise rates to make housing MORE unaffordable while letting homebuilders adjust to the new environment as they work through a historic backlog at fat margins which shore up the balance sheets Whoops JPow? Whoops Mrs Zelman and all the experts? Did no one see this coming? I said in 2021 we were basically in like the 2/3 inning of a historic run for housing. Setup mirrors the tech bubble 1999 and then the tech run we ve had the last decade or so. First act(2005) will look like a minnow compared to this one. We re probably in the 4th inning or so. Anyone who can’t see it isn’t looking.

You definitely have to be a little careful selling the puts this far along in the process because an outcome is really your enemy there. But yea, these are the sort of gold mines you live for. Its why you need to be constantly looking for opportunities instead of whining about the market or the Fed or whatever. Been hitting this since late last year. The volatility alone is pretty awesome. The puts have consistently had $1-2 on the premiums for 5-10% out of the money 2-4 week expirations. Very similar to CLF in 2021.

Man, everyones so bullish!

Yea if you're long, or a buyer of MANU here, you are solely betting on a full takeover deal with Sheikh. They've tried manufacturing a lot of leverage, but for the reasons Ive detailed in the thread, see no other reasonable alternative in terms of outcomes. Price doesnt matter. It will be higher than this.

The one thing that 100% of the time losses value over time.

Just more perspective, at least stuff that resonates with me. I am sometimes willing to admit that I’ve been accused at being an excellent catalyst trader or sometimes referred to as a “market timer”. I sold CIBR at $32 and $BX at 62 in Feb 2020 right before the market briefly crashed. I top ticked big techs 2022 Q1. MSFT I sold at $290. Google at $2700. WM I sold at $166. Costco at $560. You’d be hard pressed to execute on “timing” as good as this most times. Frankly I consider myself lucky with most of these. And despite this, looking at them all today, it’s pretty conclusive that it wasn’t necessary at all and I’d probably have owned even more of these great names at better prices had I not had a sellers bias. So much of this shit is mental.

No. Daily leverage resets.

All Im pointing out is that I became a significantly better investor and certainly better at making money in the market once I started giving weight to what variables the market tends to care about. A decade ago it was nonstop talk from all these bearish assholes who now lie and say they called the bull market, about "money printing bubbles"....Shit I never would have bought Costco if I continued giving credibility to the people that whinnied about "its expensive"....I am NOT saying the market is always super efficient, its not, but generally is. I am not saying ignore everything. But I am saying that when the market doesnt react the way you expect it to, to the catalyst variables your thesis is banking on...at some point you need to discount those variables and eventually, probably just throw them out entirely. Remove "expensive" from Costcos investment profile and its 100% a no brainer investment and has been for ages. So? If the market hasn't cared about this metric, adapt and start making money, or continuing caring about something that isnt an important variable....its a choice and about flexibility and adapting mental framework.

Yes. What is the magnitude of your prediction on anything with an investable thesis? Quantify, any of it? Because so much of the forecasting for the past almost 3 years now, has been 1) based on predictions that were entirely wrong, 2) based on predictions that came true but the market didnt give a shit about. Thats not how one makes money in the market. So what is it?

Remember, the original goalposts where in Q4 2021. The consumer was putting Xmas trees on their credit cards apparently. Then it was Q1 22 when stimmies stopped. Then it was summer 22 because of savings being depleted and rate hikes. Then "back half of 22" cuz apparently we still believed all that but were waiting for credit cards to be maxed out. Then "definitely Q1 23". Then q2/3 2023. Now "back half of 23"....Keep at it though.

In what context and why does it matter? You keep harping on these super granular, almost irrelevant nuanced things and being surprised the bigger picture stuff is responsible for the market ripping? Can I envision a scenario where the regular old, mostly blue collar worker has more purchasing power in 2025? 100%. Most costs keeping moderating and coming down and these jobs are still good and in demand. And again, if they dont...quantify it? If they lose 3% of purchasing power thats blowing up the market? Its the same as "theyre gonna raise twice more"...like ok.. cool. How do you make money from that. I dont care about spending time on things that arent able to be monetized via an investment or a trade. So far, this sort of micro focus, has yielded nothing.

So basically we are back to regular old run of the mill recession guessing?

Is the last 25 or 50 bps of hikes really the catalyst to "send the markets off a cliff"? Even if theres 2 more, the biggest slug of this is behind us. We are also closer to when the Fed itself is indicating they intend to cut rates. Basically, this is following a very similar thematic arc to COVID. The further we get into it the more certain folks bring up their doomsday intensity, but at the same time, the story is better known, worst parts behind us, and light begins to shine at the end of the tunnel which is why the markets never retouch the original lows and general continue making higher ones. Its very hard to fool the broader markets twice with the same story. Each time, like with all the covid variant bs selloffs, less and less people fall for it. So, you can be Wiley Coyote, or the Roadrunner....you choose.

Yea. Wait til we start reporting June/July/August. Like I said a year ago...3s are a certainty and we may even go negative. The consensus amongst everyone else was 5.....any wonders the market rallied?

As we see repeatedly, simply being in the market is hard work. I’ve overcome this by being margined at all times, but am still guilty as any of throwing money in the toilet putting on bearish market timing type trades as well. It’s seems the more clever and sophisticated folks think they are, the more their returns suffer. Really Ken Griffin is just taking their lunch money. I was lectured so extensively over the years by many I keep in contact with about being too bullish, using too much margin, being over concentrated, the bubble bursting, all that shit. And I was reasonably up last year owning real estate (which I was told I wasn’t allowed to own in a rising rate environment)and stuff that’s hard to value while the smarty pants Dr Dooms almost all printing negative, and some, really big negative returns. This year is turning out even better. So again the real question is, why does anyone waste their time with this shit? Just focus on what you’re good at and if you don’t have the temperament for owning stocks, don’t own them or don’t own much of them. I briefly even saw a few today trying to act vindicated for missing this rally because they “knew” “Powell is gonna tank the market” and for a split second they had volatility which seemed like a big win for them, and by the end of the day SPY was flat. This is a suckers game that’s used to sell management fees and subscriptions. It makes no one who’s actually investing their own cash, and in search of a return, any money.

Lennar reports. Housing experts still waiting for impairments.

Outstanding returns aren’t for everyone. Much of this stuff above on indexes and tops and bottoms and cherry picked starting points is really just an oversimplification of a lot of stuff in hopes of lazily arriving at “the answer”. To be excellent at anything, you have to put in the work. If that work is simply taking risk or trying to see beyond what everyone else is saying and doing, so be it. It was a certainty at the beginning of the year that equities would do poorly. After a meaningless 5% rally in January, it was a certainty that fixed income would outperform equities going forward. And despite this, the DAQ is pushing 25%. How many years worth of fixed income investments does that translate to in just 6 months? To the victor go the spoils as they say.

Uh-huh.

I like some homebuilders but have exposure limited to my short near dated puts and buy longer dated calls trade which is getting sizable as more put become worthless and the longer dated calls appreciate, but overall it isnt like the homebuilders in general are expensive yet either. But I do like pick and shovel stuff. LII is a beast. Bought a small starter end of last year but think somewhere in the HVAC ecosystem theres good money. Especially with migration to areas needing year round cooling systems, those should crank out. CARR is cheaper, but I haven't fully dove into either and do eventually need to get off my ass and do some work.

It probably is contradictory. I guess I just have a different perspective on things like standard of living, retirement, funding future life, etc. But Ive always seen it as a sliding scale that can be modified. At my peak thus far in life, Ive had months spending $50-70k when times were really good. Ive also had good months where I get by on like $2000-3000. So a lot of where I am coming from is the realization that you make modifications to account for life circumstances. I see no situation in life where I wouldnt at least be working a 20 hour a week bs job just to get some socialization in and have healthcare or something. Shit working for the municipality doing a 9-4 with a 2 hour lunch break making $50k a year. Thats stuff seems fun to me and its working by choice not out of necessity. If I needed to live on $70k after tax a year, I could 100% do it, and quite happily. So back that into what it takes to "retire" and its not as farfetched to have a low withdrawal rate and immunity to volatility. BS job. Some dividend and rental income. Withdrawal for rest.

What I am trying to do is disprove, largely just for my own mental framework, the @dealrakerguide to long term wealth. And it does seem, pretty concretely, if you avoid secular decliners, it’s almost impossible not to do well with this strategy long term. Especially if you also avoid companies with unhealthy amounts of leverage. Valuation itself is almost irrelevant if you apply a DCA approach. So in this example, even if you blew your entire load on Horton in 2005 at the top, at $40, less than two decades later I’ve got a $116 stock. And again, that’s being both an idiot, and terribly unlucky on timing. Meanwhile, I’ve heard just buying zero coupon bonds is the best way to go. And if I’m looking correctly, the current quote on a 20 year zero coupon treasury is like 45. Stock still wins.