patrick.net

I just need to watch for 4 things before I buy.

1) The ownership rate drops back down to 65% or 66% from 70%.
2) Easy money is nowhere to be found.
3) Inventories drop down to 7 months supply.
4) Foreclosures stabilize.

Until all of these things happen, I won't even start looking.

Because 25% of $1,000,000 is $250,000. Or, as we used to say back in Uhiuh, "a quarter million bucks".

Hmm, a loan for a quarter million more, or a quarter million less? Hmmm. Let me think real hard for a moment. Hmmm. What will the extra interest cost me on a quarter million again, even forgetting all that mysterious financial present value math and stuff?

Oh wait, only 15%. Hmmm. Back where I came from we'd call that "uh hundret an fiftee grand".

By the way, 25% improves affordability by "uh quarter".*

*Actually, 25% decline in nominal prices results in more like 38% improvement in affordability because of the way all that evil math with exponents in the equations works.

So now GC can tell the future?

I am "one". I will buy a house that is around .5 larger, splitting the savings rewards with the improved house rewards.

"Future is still uncertain, as far as I am concerned."

That is why we use tools like financial trends, rations and other matrix.
It is the reason we have financial analysts in major corporations
looking forward looking at various scenerios in their markets.

"You don’t need to time the EXACT bottom"

Pull up the S&P from 1993-4 to 2002 and slap a straigth ruler and line up the trends from 1992 to the bottom at 2002 after the fall in the market.

Or using simple math.. .start with S&P in 1993 add 7% YoY increase gets you to the fabled bottom of the market after 2000. The 7% comes from Peter Lynch long term index returns he spoke widely about. Second matrix is PE and major trigger when stocks hit net book values.

I'm going to Roswell NM tomorrow, this is a perfect thread. I can't wait to read it.

If the mean is 50%, the exact bottom will probably be 55%; So we really don't care too much about the exact bottom.

"it didn't require any discipline to attain it"

Uh... BOO-YAH!

The article posted yesterday from the OC Register regarding the sale of Warren Buffets Laguna "manse" illumintes this quite clearly. Had he sold at the peak (article dated 10 May 2005) or the "crater" isn't going to make a rounding error on WB's net worth. It's the principle of the thing DAMN'IT!!! :)

Hey Robert!

Robert Cote' you are my favorite amongst dystopians.