The Coming Market Crash

[ChargerMike]

and I agree I'd need an education on investing in the stock market. I made that clear up above. Having the time it takes to learn, analyze and decide, and to be constantly alert for changes in trends is not something I'd want to invest in. I don't need another career.

That's what brokers are for.

You see, it doesn't matter if our clients make money or lose money ... we get paid either way.

...now that's freeking hilarious..Rack

[Cuda]

That's what brokers are for.

You see, it doesn't matter if our clients make money or lose money ... we get paid either way.

...now that's freeking hilarious..Rack

Its also freaking TRUE

[Goober McTuber]

...my kid bought a house in the San Fernando Valley in 2004. He paid $335,000.00 with no money down and $2,000. back in non recurring closing costs. It cost him (me) about $6,000. in closing costs. The current market value of the house is $550,000. (down from $575,000. in March of this year).

Current equity $215,000. minus $6,000. closing costs =$209,000. minus $20,000 in upgrades =net equity of $195,000.00

$6,000 initial cash investment after 2 years = $195,000.00...somebody help me with the math here. Total per cent return on $6,000. in 2 years...........? is it somewhere around 1600% per year??

Helluva return, but you DO need help with the math.

[ChargerMike]

^^^^ I know, that's why I axed..

[Goober McTuber]

About 26% per year.

[Cuda]

In the Interest of Full Disclosure - Here's my positions on all indvidual stocks:

Short AMD @ 27.22
Short KLAC @ 45.86
Short ADI @ 31.69
Short QQQQ @ 40.88

Getting ready to Short ISIL

Sounds like you could use...

[Ruff]

Real estate is not inherently less risky than the market. If your real estate value takes a "dip", what do you do? Do you panic and sell? Most likely you hold on to it and let the price recover, just like you suggested. Why wouldn't you do the same with other investments?

IN 2001, did the housing market crash because a couple of planes flew into buildings? No.

Would it crash if something like that happened again? NO. Would the stock market crash if something like that happened again? YES

The real estate market as a whole follows long term up and down cycles. The stock market is far more volatile. There are fewer factors to consider in real estate, and diversification on the same scale as the stock market is not necessary.

and I agree I'd need an education on investing in the stock market. I made that clear up above. Having the time it takes to learn, analyze and decide, and to be constantly alert for changes in trends is not something I'd want to invest in. I don't need another career.

September 10, 2001 DJIA closing was 9605. December 31, 2001 DJIA closing was 10021.

Look, if you want to be chicken little, OK by me.

Just don't come blubbering about here like you know shit.

And what is the difference in the intrinsic value of an investment asset such as real estate and that of the intangible stock?

If you are investing in residential real estate that also serves as your personal residence, then you are actually the one speculating, not the stock investor.

These things are not that difficult.

[ChargerMike]

About 26% per year.

hummmm. $6000.00 @ 26% I'm no math genius, but wouldn't a 26% return be about $1,560.00?

[KC Scott]

Really?

Really.

Let's get one thing straight first. I don't a fuck about you or your position and I'm certainly not about to disclose my own personal financial position in a place like this. That's not going to happen.

:D Why's That Smart Guy?..........

Maybe your afraid I'll short all your stocks - BWA!

Maybe you think one of the einsteins on here will hack in and get all your account #'s?

Here's a clue - If that were the case, then it wouldn't really matter what your holdings were, now would it.

The bottom line is like in so many other things, Your all talk and no Spine

[Ruff]

...my kid bought a house in the San Fernando Valley in 2004. He paid $335,000.00 with no money down and $2,000. back in non recurring closing costs. It cost him (me) about $6,000. in closing costs. The current market value of the house is $550,000. (down from $575,000. in March of this year).

Current equity $215,000. minus $6,000. closing costs =$209,000. minus $20,000 in upgrades =net equity of $195,000.00

$6,000 initial cash investment after 2 years = $195,000.00...somebody help me with the math here. Total per cent return on $6,000. in 2 years...........? is it somewhere around 1600% per year??

Interesting.

Like most real estate speculators you've neglected to include all of your carrying costs.

Have there been no property taxes paid on this parcel? I'm pretty sure that the lender required insurance? Other expenses?

Oh, and current market value does not mean the same thing as cash in your pocket, does it?

What would it cost you to liquidate?

Now you do the math.

[Eaglebauer]

Let's get one thing straight first. I don't a fuck about you or your position and I'm certainly not about to disclose my own personal financial position in a place like this. That's not going to happen. I "put it on the line" where it counts....in the real world.

Spineless-coward-says-what?

[Goober McTuber]

...my kid bought a house in the San Fernando Valley in 2004. He paid $335,000.00 with no money down and $2,000. back in non recurring closing costs. It cost him (me) about $6,000. in closing costs. The current market value of the house is $550,000. (down from $575,000. in March of this year).

Current equity $215,000. minus $6,000. closing costs =$209,000. minus $20,000 in upgrades =net equity of $195,000.00

$6,000 initial cash investment after 2 years = $195,000.00...somebody help me with the math here. Total per cent return on $6,000. in 2 years...........? is it somewhere around 1600% per year??

Interesting.

Like most real estate speculators you've neglected to include all of your carrying costs.

Have there been no property taxes paid on this parcel? I'm pretty sure that the lender required insurance? Other expenses?

Oh, and current market value does not mean the same thing as cash in your pocket, does it?

What would it cost you to liquidate?

Now you do the math.

Not to mention the fact that the initial investment was not $6,000, it was $6,000 + $335,000. Just because you borrowed the money doesn’t mean it isn’t part of the basis for calculating the ROI.

Actually, the math I questioned was the $195,000. Total outlay (aside from interest and property taxes) was $361,000. Net equity would be $189,000, for a 26% return per year for the two years.

[Bizzarofelice]

You come in here spouting a bunch of retarded chicken little bullshit and then expect people to take your gibberish seriously?

Walked right into that one, kool-aid mainliner.

[KC Scott]

The bottom line is that it's none of your motherfucking business. Whatever personal information I share or withhold is done at my whim.

BWA Again

I would have absolutely no interest in "proving" anything to you

Prove it to yourself, prove it to the board....

C'mon Genius

Or sit there on the couch and STFU

[Mister Bushice]

Real estate is not inherently less risky than the market. If your real estate value takes a "dip", what do you do? Do you panic and sell? Most likely you hold on to it and let the price recover, just like you suggested. Why wouldn't you do the same with other investments?

IN 2001, did the housing market crash because a couple of planes flew into buildings? No.

Would it crash if something like that happened again? NO. Would the stock market crash if something like that happened again? YES

The real estate market as a whole follows long term up and down cycles. The stock market is far more volatile. There are fewer factors to consider in real estate, and diversification on the same scale as the stock market is not necessary.

and I agree I'd need an education on investing in the stock market. I made that clear up above. Having the time it takes to learn, analyze and decide, and to be constantly alert for changes in trends is not something I'd want to invest in. I don't need another career.

September 10, 2001 DJIA closing was 9605. December 31, 2001 DJIA closing was 10021.

Look, if you want to be chicken little, OK by me.

Just don't come blubbering about here like you know shit.

And what is the difference in the intrinsic value of an investment asset such as real estate and that of the intangible stock?

If you are investing in residential real estate that also serves as your personal residence, then you are actually the one speculating, not the stock investor.

These things are not that difficult.

Nope, I own more than just a personal residence, so it's not speculating. I've bought either under market or in a high growth area and have done well doing so.

But if tomorrow a terrorist bomb blows up shit somewhere in America, I won't be scrambling to figure out what to do with my investments, you will.

I don't need either the roller coaster ride nor the time investment it would take to manage a stock portfolio properly.

[KC Scott]

I back my positions with facts and sources not feelings.

OK Genius, Show us some facts.....

Tell us All what Stock is going to Go Up.

Or shut the Fuck Up.

:D

[ChargerMike]

...my kid bought a house in the San Fernando Valley in 2004. He paid $335,000.00 with no money down and $2,000. back in non recurring closing costs. It cost him (me) about $6,000. in closing costs. The current market value of the house is $550,000. (down from $575,000. in March of this year).

Current equity $215,000. minus $6,000. closing costs =$209,000. minus $20,000 in upgrades =net equity of $195,000.00

$6,000 initial cash investment after 2 years = $195,000.00...somebody help me with the math here. Total per cent return on $6,000. in 2 years...........? is it somewhere around 1600% per year??

Interesting.

Like most real estate speculators you've neglected to include all of your carrying costs.

Have there been no property taxes paid on this parcel? I'm pretty sure that the lender required insurance? Other expenses?

Oh, and current market value does not mean the same thing as cash in your pocket, does it?

What would it cost you to liquidate?

Now you do the math.

...of course there are "carrying cost" in living there. I'm assuming there are living costs associated with living anywhere, whether it be a home, apartment, or in your case a single wide. Go ahead and knock off what ever you think legitimate and get back to me. Hey knock it down to $150,000. hell knock it down to $125,000.00 How many 200 sq.ft. singles could you buy in Mississippi for a buck twenty five?

BTW...when is the last time you invested $6,000. in the stock market and 2 years later the stock was worth $150 large....did ya say never? thought so...

[Mikey]

There are a bunch of stocks that I could make go up just by selling them.
But I'm not going to do that for you perverts.

[ChargerMike]

...my kid bought a house in the San Fernando Valley in 2004. He paid $335,000.00 with no money down and $2,000. back in non recurring closing costs. It cost him (me) about $6,000. in closing costs. The current market value of the house is $550,000. (down from $575,000. in March of this year).

Current equity $215,000. minus $6,000. closing costs =$209,000. minus $20,000 in upgrades =net equity of $195,000.00

$6,000 initial cash investment after 2 years = $195,000.00...somebody help me with the math here. Total per cent return on $6,000. in 2 years...........? is it somewhere around 1600% per year??

Interesting.

Like most real estate speculators you've neglected to include all of your carrying costs.

Have there been no property taxes paid on this parcel? I'm pretty sure that the lender required insurance? Other expenses?

Oh, and current market value does not mean the same thing as cash in your pocket, does it?

What would it cost you to liquidate?

Now you do the math.

Not to mention the fact that the initial investment was not $6,000, it was $6,000 + $335,000. Just because you borrowed the money doesn’t mean it isn’t part of the basis for calculating the ROI.

Actually, the math I questioned was the $195,000. Total outlay (aside from interest and property taxes) was $361,000. Net equity would be $189,000, for a 26% return per year for the two years.

Of course it's part of the basis and I accounted for that in my calculation. Even using your figure of $189,000. net equity, the amount of CASH laid out was $6,000.00 for a yearly return of over 1500% on the cash investment.

...BTW..the correct percentage per year ON $195,000 equity on an investment of $6,000. is 1575% so knock off whatever carrying costs you want and it's still a helluva return.


(A) = principle (P) times (1 + number of years (n) time interest rate (i).....
A = P (1 + ni)

[KC Scott]

Yep - Nice move Up today - It's a suckers Rally - Hope you bought Some MVSCAL.

You Still haven't told us what's Going up.

C'mon smart guy.... surely you have the balls to pick something.



or Maybe not.

[Mikey]

Actually, CM, you reasonably do have to consider the loan as part of your "cash" outlay. You borrowed the money so that you could purchase the house. You're paying interest on it and it's you that is at risk if the value of the house goes down. Obviously you won't be losing money on it but have to consider the loan as part of the investment.

If that's too much to comprenend, think of the transaction in two steps. You borrow $355,000 from the bank and take it in "cash". You then pay that cash plus $6,000 more cash for the house. It's all the same thing, it's just that you still owe the bank for the loan.

By your logic, I could say that when I refinanced my house last year I was then able to buy it with NO cash outlay. In fact, I got $14,000 back and I bought an $800,000 home for less than $300,000, which wasn't a cash outlay anyway. Now THAT's a good rate of return.

[ChargerMike]

Mikey, way back in the thread I originally acounted for the $335,000 purchase price (loan). My steps in arriving at the equity figure may be open for discussion, and the fact I didn't plug in certain carrying costs. The fact is, if the home were sold tomorrow for $550,000. minus the loan payoff of $335,000, the equity would be $215,000. minus costs of sale, carying costs, etc. At that point with the loan paid off, my Son would be geting a check from escrow for around $175,000. off the initial investment of $6,000.00. :D

[Goober McTuber]

Interesting.

Like most real estate speculators you've neglected to include all of your carrying costs.

Have there been no property taxes paid on this parcel? I'm pretty sure that the lender required insurance? Other expenses?

Oh, and current market value does not mean the same thing as cash in your pocket, does it?

What would it cost you to liquidate?

Now you do the math.

Not to mention the fact that the initial investment was not $6,000, it was $6,000 + $335,000. Just because you borrowed the money doesn’t mean it isn’t part of the basis for calculating the ROI.

Actually, the math I questioned was the $195,000. Total outlay (aside from interest and property taxes) was $361,000. Net equity would be $189,000, for a 26% return per year for the two years.

Of course it's part of the basis and I accounted for that in my calculation. Even using your figure of $189,000. net equity, the amount of CASH laid out was $6,000.00 for a yearly return of over 1500% on the cash investment.

...BTW..the correct percentage per year ON $195,000 equity on an investment of $6,000. is 1575% so knock off whatever carrying costs you want and it's still a helluva return.


(A) = principle (P) times (1 + number of years (n) time interest rate (i).....
A = P (1 + ni)

Christ almighty, you’re thick. The first place you went wrong was here:

Current equity $215,000. minus $6,000. closing costs =$209,000. minus $20,000 in upgrades =net equity of $195,000.00

You took $209,000 minus $20,000, and got $195,000. Should be $189,000. Your total investment was $335,000 + $6,000 + $20,000. That would be $361,000. Divide $189,000 by $361,000 and you get 52%. That was over two years, so that would be 26% per year. Still a very nice return.

Or maybe you could look at it this way:

[ChargerMikemath]You invested $6,000, sell the house for $550,000, and you made $544,000. A return of over 9000%.[/ChargerMikemath]

[Jimmy Medalions]

Clearly Goobs doesn't know a fucking thing about finance. If he did, he'd know that leverage drives returns.

Pay attention dumbfuck:

Equity is entitled to all profits. Debt is only entitled to return of principal. If confused, read again until you get it.

Moving on...Initial cash outlay (for the dumbfucks at home, money not borrowed) = investment. Net proceeds after repayment of debt (for the dumbfucks at home, net cash the seller ends up with) = profits. Net proceeds over investment equals your return.

Basis doesn't count for shit toward your return, that's a tax matter which you clearly don't know shit about either.

Pick up a book on finance and learn the concept of IRR's. Dumbfuck.

[indyfrisco]

On 8/17, KC Scott posted 5 stocks that were worth investing in.

8/17
FNSR - 3.45
TQNT - 4.41
KRY - 2.71
BDCO - 4.92
ARDI - 4.47
Total = 19.96



10/04
FNSR - 3.70
TQNT - 5.08
KRY - 2.67
BDCO - 3.72
ARDI - 5.87
Total = 21.04

Now, if I had invested $1000 equally in these stocks...

1000/19.96= 50.10

50.1*21.04 = 1054.11

54.11/1000 * 100 = 5.41% gain in 48 days

(5.41% / 48) * 365 = 41.14% yearly gain

If the trend were to hold, the $1000 initially invested would total $1411 after a year.

I'm not saying KC Scott knows his shit or not. There's just some statistical evidence right above that says he was right last time he posted this kind of stuff. A 41% yearly gain is a pretty sweet investment. Start multiplying the earnings for higher initial investments and there are significant gains.

I'm not going on a fire sale on my investments just yet. However, I am going to keep an eye on the market just a bit closer.

Thanks, Scott.

[indyfrisco]

btw, I'm not a KC Scott stalker. I just remember getting some stock tips from Dr. Bopb a long time ago. I didn't follow through with buying them. I completely regretted it a year later when I saw I owuld have made a nice 30% gain.

When I saw Scott post those picks, I put them in my yahoo portfolio to watch. Seeing this thread made me go back and do the calcs.

[indyfrisco]

Here it was. In KC Scott's Top 5 thread.

viewtopic.php?p=328704&highlight=#328704

[Mister Bushice]

5.41% / 4Cool * 365 = 41.14% APY

I think you miscalculated and left a few factors out.


times :? divided by gives an annual yield of

[indyfrisco]

yeah, that's why i edited it. didn't mean to put APY.

[ChargerMike]

Goob, early on I admitted my math is perhaps a bit "fuzzy". You've pointed out some viable points, however your percentage of return is still wrong. Let me put it in the simplest form I can and maybe you can catch it.

Purchase price...........$335,000.00
Down payment...........$0.
Mortgage...................$335,000.00
Closing costs..............$6,000.00

Sale price...................$550,000.00
Mortgage payoff..........$335,000.00 (would be slightly less after 2 years,but what the hey)
Equity after payoff.......$215,000.00
Cost of sale (7.5%)......$41,250.00

Proceeds from escrow..$173,750.00 net equity..minus any "carrying cost" you want to plug in.
Original cash investment $6,000.00
ROI (in this case $6,000).$173,750.00
Percent return...............you do the math, mines fuzzy!


BTW...your interest write off would be around $36,000.00 for the 2 year period.

I would assume if you were investing that same $6,000.00 in the stock market, you'd be living somewhere..right? Naturally you would have many of the same "carrying costs" wherever you were living..right? But go ahead and plug in what figures you want and subtract from the $173,750.00.What ever figure you come up with compute the percentage of ROI and get back to me...Oh, don't forget the $36,000.00 write off in your calculations.

[Mister Bushice]

The difference between you and scott is that he's got some proven investment success backing up his theories.

You've got all those "clueless as a dumbfuck", and "I'm not going to prove I know anything" type phrases going for you.

not that I'd be taking and using internet message board financial advice, but within this thread he's got a far better rate of return on smack than you do.

Next time maybe you shouldn't smack on Margin.

[Mister Bushice]

Clarke, referring to the precipitous decline in the price of oil over the last two months and the drop in the yield on the benchmark Treasury 10-year note. "And investors are increasingly optimistic that the Fed will orchestrate its famed soft landing.

True. The home mortgage interest rate is tied to this, and MIRs have been decling a bit.

But - you don't need to be a broker or serious investor to see that the market is poised for a correction, even if all you are going by are historical stats. There is a lot of uncertainty out there, housing and energy being only two of those factors.

[The phantorino]

...my kid bought a house in the San Fernando Valley in 2004. He paid $335,000.00 with no money down and $2,000. back in non recurring closing costs. It cost him (me) about $6,000. in closing costs. The current market value of the house is $550,000. (down from $575,000. in March of this year).

Current equity $215,000. minus $6,000. closing costs =$209,000. minus $20,000 in upgrades =net equity of $195,000.00

$6,000 initial cash investment after 2 years = $195,000.00...somebody help me with the math here. Total per cent return on $6,000. in 2 years...........? is it somewhere around 1600% per year??

it's Jack shit, if no-one can afford to buy the property when your kid wants to sell it. A property is only worth what someone else can afford. if interest rates go up (and they will; soon, and hard), it will be tough for anyone to service a mortgage on this kind oif holding.

[ChargerMike]

...my kid bought a house in the San Fernando Valley in 2004. He paid $335,000.00 with no money down and $2,000. back in non recurring closing costs. It cost him (me) about $6,000. in closing costs. The current market value of the house is $550,000. (down from $575,000. in March of this year).

Current equity $215,000. minus $6,000. closing costs =$209,000. minus $20,000 in upgrades =net equity of $195,000.00

$6,000 initial cash investment after 2 years = $195,000.00...somebody help me with the math here. Total per cent return on $6,000. in 2 years...........? is it somewhere around 1600% per year??

it's Jack shit, if no-one can afford to buy the property when your kid wants to sell it. A property is only worth what someone else can afford. if interest rates go up (and they will; soon, and hard), it will be tough for anyone to service a mortgage on this kind oif holding.

...very true, we are experiencing a drop in prices here and of course any commodity is only worth what someone is willing to pay for it. As I mentioned earlier, the value has already dropped $25, 000. since March. I don't know where you live Phantorino, but in SoCal $550,000. is the entry level for a 3br.2ba. 1500 sq.ft. house.

[The phantorino]

Once again MvScallop tries to sound knowledgable, without any kind of back up: How about The Ecomomist (Too Lib for ya?), Tampon-breath?

The US economy is decelerating and this trend will roll over well into 2007, primarily driven by a sharp slowdown in household expenditure and more modest business investment.

We expect the US economy to expand by 3.4% in 2006 and slow to 2.1% in 2007. A cooling housing market will erode household expenditure by dampening both the wealth effect and prospects for equity withdrawal, both of which have been important drivers of growth in recent years. As consumers feel the need to increase savings rates and rebuild their balance sheets, household incomes will continue to be squeezed by the persistence of high oil prices.

The weakening of overall aggregate demand will not be matched by any significant fall in price pressures. The rate of inflation will remain uncomfortably high in the US raising the prospect that the Federal Reserve, keeping to its inflation-fighting role, will delay monetary policy loosening in support of economic growth. Should the Fed delay too long this could easily push the economy into recession.

[The phantorino]

Some bullshit written months ago.

How about a link, dipshit. In fact, just forget it. You don't even live here. Nobody gives a fuck what you think.

A link? I don't think so - as some one you know well, says

I "put it on the line" where it counts....in the real world.

But if you are interested, it's a week old.

[The phantorino]

I say again, they will return to the previous highs when cold weather kicks in. How do I (and this piece?)know, because it always does. I won't bore you and everyone else with a dictionary reset, but that is NOT a prediction.

[Jimmy Medalions]

I won't bore you.

Too late.

[ChargerMike]

I won't bore you.

Too late.

RACK...take a lesson phantorino...read more post less!

[ChargerMike]

Dam..do any of you read the whole thread? You repeated the obvious which I previously stated several times 88. I'm done with this freekin thread.