wow, did this turn into the housing bubble thread?
i wasn't going to reply to your post the other day, figuring it was best to let it go...however, noting first that i don't own TARR, and don't need your "best wishes" or whatever for my non-existent investment there, i find it nearly impossible to believe that you held TARR from a tax loss speculation to a 40 to 50 bagger, given your outlandishly negative view of the housing market, of TARR, and of the world in general from the appearance of your posts...you held it all that time, for a supposed return that most investors only dream of, then dumped it all based on a few comments you heard in the airport and a shuttle? umm...yeah <G>....that aside, addressing your most recent rant:
do you dispute that people have to live somewhere? do you dispute that this makes it much less likely that they will "dump" their house if it drops in value, as they would a tech stock? do you dispute that a piece of property with a house on it in a nice part of the country has more inherent value than a piece of paper announcing that you own part of a company that doesn't even have a proprietary product, and which in many cases doesn't even turn a profit?
do you dispute that the baby boomer generation (the same one you think will bankrupt medicare) is reaching the age where their kids are done with college, and they can move wherever they want and own more than one house, as their income continues to increase and their family related expenses actually decrease? do you dispute that florida is an attractive destination for many of these people, even if it may not be for you or i?
comparing a nationwide housing market, with a few areas which are hot, to the technology bubble, where even the most solid of tech companies was wildly overvalued, is irrational...it's a convenient metaphor, as everyone remembers the tech crash, and that makes it easy to try to create fear with headlines and statistics, but when you strip away the hyperbole, a house in a nice area that has gone up 50 or 100% in a few years is nothing like a tech stock with no earnings that has gone up 1000% or more from its IPO...a year later, that tech stock may be worth basically nothing, and no one will want it, but a year later, the house will still be worth somewhere near the same price, if not more, and lots of people would be glad to live in it...not only that, but the inherent value of the property will climb each year, regardless of how much above that amount the current market price might be, and there will only be more and more people in the US who need/want a house, whereas there may be no one who needs the company's products...pick any 100 nasdaq stocks from march 2000 and pick any 100 houses in this country right now...i would hazard a guess that the 100 nasdaq stocks were overvalued by somewhere between 200 and 500% on average (even one of the strongest tech companies at that time, CSCO, was overvalued by at least 400%, trading a P/E of 200 at its top of 80 bucks)...would you assign the same factor of overvaluation to the 100 houses (using logic rather than your pessimistic view)?
clearly you don't understand or just want to minimize the tax advantages of owning a home (the most important of which is not the yearly deductions, but the tax free gains as you build equity), but the houses causing your concern over pricing are not being sold to the "median" household, so your data doesn't even make sense
comparing biotech investing, where your eventual profit is dependent on the success of an individual company, to the benefits cities derive from businesses locating in their area, is equally absurd...rather, the valid comparison is how companies like SFCC and KNDL, etc., benefit from the fact that pharma and biotech companies do testing of their products, and no matter which company is eventually successful in developing a product to address a particular condition, the "picks and shovels" companies are the ones which achieve the most consistent profits from these activities (see the levi strauss comparison from the gold rush days)
finally, the "new" houses that are 25% larger often cost less to heat and cool than older, smaller houses...the last time we moved, our square footage increased modestly, but our electric bills went down, and the newer houses being sold in arizona are far more efficient than even ours, which was built in the mid 90's
how can you know if facts fly in the face of reason when your "facts" aren't even accurate?
one thing i agree with, though i know you didn't mean it: life is good!! |
