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@#*(%^'ing market

Discussion in 'Non-Diving Related Stuff' started by O-ring, Jul 15, 2002.

  1. budgy

    budgy Instructor, Scuba

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    O ring
    We used to consider a company's max value at around 7x earnings plus fixed assests. I guess that makes average stock in today's market overvalued. Sorry if you've been taking a financial beating but prices have been in cloud cuckoo land for years.
     
  2. O-ring

    O-ring Beyond the Pale ScubaBoard Supporter

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    Greenspan said way back when (was it 99 or 2000 maybe?) that all this buying was irrational given earnings, etc. We should have listened :D .

    Then again, he said the other day that all this selling was irrational. I think we will see bottom soon...besides, as long as we hang in there we will only keep gathering a ton of unrealized losses... Much better to be a loser on paper for a few years than cash out and wish we hadn't, right?
     
  3. boomx5

    boomx5 DIR Practitioner

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    Real estate is a much better investment. I have clients who have made over $100k in equity on their home; and that is only after one year!
     
  4. O-ring

    O-ring Beyond the Pale ScubaBoard Supporter

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    But think of all the dive gear and trips I couldn't partake in if I had to save up a down payment for a house!
     
  5. boomx5

    boomx5 DIR Practitioner

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    Unless you bought it on a 0 down 0 closing cost loan. Then you would get your cake and eat it to. (Or get your house and scuba to!)
     
  6. Marlinspike

    Marlinspike Barracuda

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    Most GOOD economists were aware of the artificial nature of the "bubble" we were in. However, I still dont think people will learn to listen more to real economists and less to "financial advisors" who are really just salespeople with no significant understanding of the economy.

    ~Marlinspike
     
  7. wannabe

    wannabe Nassau Grouper

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    But how much of the real estate boom was fueled by the soring value of stock portfolios?
     
  8. Ladydiver

    Ladydiver Founder

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    Well,

    If the real estate market here in San Diego is any indication, it really didn't have a whole lot to do with the market. The mean price of a single family home is sitting at about $320,000, and that is not for anything special. That's for a 2-3 bedroom home with just the basics.

    One of the guys I work with just bought a brand new 4 bedroom, 3 1/2 bath home and paid (after landscaping the backyard) $1.2 million.

    Real Estate is big business down here.
     
  9. wannabe

    wannabe Nassau Grouper

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    But how many people can actually afford 320K house on salary alone (let alone 1.2M)? I think many of the houses sold were bought with money being made in stock markets.

    I have done alright via real estate but limited liquidity and unstable economy has me a bit worried that I can keep them going as they are now.
     
  10. Marlinspike

    Marlinspike Barracuda

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    Locally inflated prices usually have more to do with prices relative to other goods. However, the extreme distortion of real estate in certain areas is indicative of financial earnings above and beyond a salary. During the "boom" as it has been called, many people were making more money through stocks than through a salary. Markets adjusted accordingly to take into account that people had more "money" to spend. Relative to the artificially high personal earnings, the high prices of pathetically small houses and apartments make sense.

    ~Marlinspike
     

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