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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Madharry who wrote (28266)	9/26/2007 7:52:34 PM
From: Jurgis Bekepuris	Read Replies (1) \| Respond to of 78644

Well, 120M+45M is not that much even if you subtract it all from the remaining asset value. ;) Though I may have already accounted for it, I'm not sure. Being debt holder may be a way to go as is waiting "3-4 years". You are gambling that the downturn will be very long and severe though. (And I am gambling that it will be short and mellow ;)). If not, the stocks will recover without bankruptcies and as a debt holder you won't benefit much. Why I think the downturn will be short and mellow? I don't think the house prices are extraordinarily out of whack. I don't know Florida (except for the claims that prices already have fallen 50% in parts of it), but California (not counting Silicon Valley and Golden Coast where prices won't fall unless we have another super tech crash) is not that overpriced IMHO. LA for example seems to be at 5-6% rental yield, which is not very bad IMHO in the current rate environment. Other parts of the country are even cheaper from what I hear. Expecting prices to drop another 50% to >10% rental yields is IMHO unrealistic. Although possible if we get really bad/crazy seizure of mortgage market + recession + some oil/terrorist/Katrina whatever calamity.