I think RE market may not be a fair analogy since the industry is not new and prices move far too slowly. An airline industry would be a better example in the early 30s, but I will have to do a bit of research for that ! But RealEstate - well we've moved around so much.
RE - Japanese market is grossly overvalued. Indian too. Housing in both places is substandard and offers very little value for money.When we decided to buy our first house, we waited for 3 years, chasing prices. Then took the plunge when everyone said it was "terrible" buy. Bought ourselves a nice property in the upmarket area - could have waited for the "bottom" but decided not to risk more. 1.5 years later, the property was priced 3 times ! Bottom fishing may have got us a *bit* extra, but was risky as well. The growth plateaued (of course) but we still hold it, wouldn't sell it for anything. Today, 6 years later, it is worth worth 5 times what I paid for it.
One look at San Francisco/Bay Area properties - it frightened even a hardened pro like myself. But it provides for a great investment. We came here last year - everyone said houses were overvalued, that prices would come down....wish we hadn't waited. Of course you have to compare apples to apples, so you cannot compare property in Uganda with YHOO, being a leader, it deserves to be compared with the leader in any industry...
I believe YHOO will continue to evolve, hence the belief that growth will continue. I think the management team has their finger on the pulse and can anticipate demand, supply extremely well. As long as they roll out products that appeal to masses, in a way that appeals to masses, I will continue to invest in YHOO. I'll be the first one out when they become arrogant and/or complacent.
How can you explain an average 1/4 acre, 30 yr old house being sold for over 600K in CA and the larger/newer house being sold for around 200K in Rayleigh-Durham ? CA provides better earning potential and location. And that makes a difference. YHOO is firmly positioned as well, with good earning potential. Although the analogy is not very good, I do believe value is what people are willing to pay for a....commodity ? Just a different perception to yours. As long it helps me make money legally, ethically, who cares if it is not taught at Harvard.
PS: Are you a long term short - will you keep shorting the stock or will you eventually establish a long position ? At what point, if I may ask ? |
