crs223

Maybe past performance should not be used... but historically US involvement is the kiss of death. I only know what I see on TV -- and I have no solution... My neighbors are doing their part by flying Ukrainian flags.

During 10-year periods where the indices go nowhere, I recommend only buying stocks that go up. Preferably 10-baggers.

… things can be stopped quickly too https://globalnews.ca/news/8164763/china-ban-sissy-men-effeminate/

The only thing “absurd” here is using two extreme examples (McDonalds worker and $750k/year professional) to try to invalidate my point. https://en.m.wikipedia.org/wiki/Straw_man

This is a good point. Young professionals have moved in droves from California to Colorado and Texas. But that is more the “demand side” of finding an affordable lifestyle. I imagine the more enterprising types are moving to Silicon Valley to strike it rich on the “supply side”. Maybe this is nothing new. However… We now have cities full of young people who have their own “exodus” to a new lifestyle that doesn’t want what the “boomers” are offering. Right now they’re content to just want trigger warnings, preferred pronouns, no plastic straws… eventually they will want something more … tangible. Maybe I’m just paranoid.

I stand corrected. Yes someone making $750k/year can still afford a first home. Your example leaves me even more convinced that the present imbalance will not last.

No working person under ~35 can buy a first home within 30 miles of my neighborhood (93101). Even if we assume the younger generation is useless… this imbalance will not last. 1. Home prices will fall 2. Incomes will rise 3. Resources will be redistributed 4. No more first time homebuyers ever My bet: (4) will not happen. Each election cycle without (1) or (2) will bring more (3). Student loan forgiveness is just the beginning.

Could just be correlation without causation. Boring people buy white cars — like me! Wonder what is the crash rate for this color:

I sold the last of my PHYS and bought more BRK with the proceeds.

Druckenmiller is great. In one interview he explains how the doom/gloom narrative makes complete sense (gains trust/credibility) … and explains “nevertheless essentially all my money was made being long” (kill shot). He’s like a deprogrammer for the doom/gloom cult.

All authors want eyeballs. All humans want admiration. This is not unique to doom-and-gloomers. I think what you are trying to say is that Grantham-types don’t believe what they say. I’m sure they do. What’s so unbelievable about “nonstop money printing is bad”? Of course the doomers have been wrong for the past 20 years. So either “nonstop money printing is not bad” or there really is no “nonstop money printing”.

Who has a more convincing story that the economy is going to blow up and it’s all the fed’s fault? a) @Gregmal b) Peter Schiff c) Grantham

In Santa Barbara they now require a membership to buy food outside. Lines dropped by about 90%

Don’t forget the samples!

Even if there is no asset bubble. Even if everyone has tons of paper cash under the mattress without any financial instruments. If everyone retires, prices will go up, and people will have to un-retire to pay the bills.

you don't need a dictate. if too few people are working, supply-and-demand would force un-retirement. taken to the extreme, if everyone suddenly retired, there would a shortage of workers. as a result prices of everything would skyrocket. resulting in people coming out of retirement just to pay the bills.

Monetize the unfounded trust: for $1,000 zillow will increase your zestimate by 10%. …. actually that would destroy the trust… but there must be some way to monetize this blind faith. perhaps it’s to get a job as an algorithm developer at zillow.

That is interesting and terrifying. There is just no way a centralized algorithm can accurately price individual houses around the world. but because it exists, it gets used (and apparently trusted). Just the sort of thing an engineer hates, but management loves!

This is an issue of accuracy vs precision. The zestimate algorithm (and any other numerical algorithm such as your car’s cruise control) produces overly “precise” results. I bet the internal algorithm really wanted the zestimate to be $2.143 higher than your asking price. of course such a number is not “accurate”. But is sure is precise. The algorithm is just adjusting your asking price by the 4 week moving average of asking-price discount in your zip code and adjusted by an additional penalty because your house had a price cut… historically people who reduce their asking price are going to get punished 0.3% at the negotiating table. Of course zillow couldn’t adjust the zestimate by $2.143 because it would “expose” that the algorithm is overly precise and not necessarily accurate. So they attempt to “hide” behind rounding the value to the nearest dollar. Which is obviously still too precise when dealing with a $1.7M home. I bet there is an outstanding issue in the inbox of a zillow developer: round to the nearest thousand instead of to the nearest dollar. then some other algorithm PhD type is going to make the rounding value depend on price. $1M homes are rounded to the nearest thousand. $10M homes are rounded to the nearest $10k. i work on algorithms like this at my job. it’s a bunch of geeks guessing how to make an estimate… which produces “precise” results that are not always “accurate”… and then collaborating on the whiteboard about how to improve the algorithm to be more “accurate”.

If I were in charge of writing the zestimate algorithm, i would base the price on comps, sq footage, property tax assessment, lot size, and other “public” info. None of this captures “private” information such as: does the house have mold/termites, was the kitchen remodeled, is it a fixer-upper, etc. The asking price encompasses all of this. The asking price was set by a professional agent and motivated seller who factor tangibles and intangibles. The asking price is a goldmine of info and certainly better than some algorithm written by a computer geek 5,000 miles away. My algorithm would slightly adjust the asking price based on recent local trends for homes to sell above or below ask. Probably also look at the particular listing agent’s history of getting the asking price (“historically this agent asks for 7% too much”).

I’ve thought this too. If this is true, supply and demand dictate that prices and salaries will rise to force people to become productive again. I also love my job (21 years now). If I didn’t need money, I’d pay to do some of the work. I was so lucky to stumble into it… and I hope to teach my children how loving your job makes life so much better.

@Gregmal I have been assuming the opposite. I would guess that anyone under 35 years old have seen this strategy work brilliantly for their entire adult lives: if you want to get rich, buy the dip. In the unlikely event that markets turn ugly, the fed will print and bail us out.

@ERICOPOLY FYI I refinanced my rental home January 2021 with AIM Loan. They “count” rental income only if it’s been coming in for 24 months or more.

There is a similar phenomenon in California. Prop 13 dictates that property tax is essentially “frozen” when you buy your house — the dollar amount of the property tax bill doesn’t go up over the decades. So CA ends up with large houses that have just one person living in them - typically an old widow unwilling to sell to avoid “resetting”’ the property tax bill to current levels. This is most pronounced during sellers markets when the buyers mutter to themselves about old people “hoarding” their square footage.

How can housing drop when mortgage rates are below CPI?