Real estate

I feel like I don¡¯t have a good feel on the current crypto and stock markets so I have taken risk off and I¡¯m going back to all in real estate. 

Real estate is high as well but it¡¯s traditionally the safe bet. 

My plan is to buy with cash. My protection is if the housing market dumps in the future I¡¯ll use my equity to buy big properties. 

For example: Let¡¯s say the entire housing market dumps 40%. I¡¯ll use my equity to purchase more expensive units. 

Buy $650,000 multi family now. -40% = $400ish. 

If the market dumps I¡¯ll use the $400k in equity to put a down payment on a $1.6 million multi unit building. 

If the market doesn¡¯t dump, that¡¯s also fine. 

How do you guys see the housing market playing out over the next few years? 

Unfortunately I think it¡¯s going to stay hot for at least the next 2 years. The Fed is ¡°thinking about thinking about¡± raising rates is a bunch of bullshit. They¡¯ll keep kicking the can down the road for awhile to keep the house of cards propped up. You have the loot so I would say buy now if a reasonable deal comes around. Waiting for a crash is a fools game.  Like most markets time in is more important than timing and real estate is no different 

I think u have the correct plan...gonna be alot of renters out there due to the HIGH cost of housing is what i've heard...fwiw

I binge watched ¡°The Men That Made America¡± ¡ª Rockefeller, Vanderbilt, Carnegie, JP Morgan etc ¡ª and Greenspan is on there giving some sound bites ¡ª one thing that he said really stuck with me. 

There has never been a major correction while people are expecting it. Every time there is a major correction almost nobody is expecting it, that¡¯s why it becomes a major correction. 

I feel like right now too many people are expecting it. 

Thoughts? 

People have been trying to time the crash since 2008. (At least that’s what I’ve noticed.) It’s been a losing position for a while. 

Rates are the pin for the RE market and the stock market...not sure the FED has the stones to let the market actually be the market.

Interesting… 

How the major stock indexes around the world have recovered since 2009.

India 638%
USA 533%
Japan 275%
Korea 181%
Europe 172%
Canada 155%
Hong Kong 84%
China 75%

Wait… 

here's the same thing, but with every index in usd terms.

USA 533%
India 396%
Korea 264%
Japan 224%
Canada 153%
Europe 142%
China 89%
Hong Kong 83%

Wait… 

Global indexes, converted into dollars, and adjusted for M2.

USA 139%
India 92%
Japan 19%
Korea 19%
Canada -6%
Europe -10%
Hong Kong -27%
China -31%

Let's not forget to adjust the global numbers and account for dollar debasement (M2 money supply growth).

up...6.9%.....Since the 2009 bottom - 12 years ago.

So what's the point?

The point is this. Central banks are trying to do everything possible to keep the global economy afloat. Through their constant manipulation of the currency supply, they are obliterating the middle class and adding immeasurable systematic risk to the system. These actions are pushing more and more equity into the hands of the few while causing the rest to go deeper into debt, while owning nothing that generates free cash flow. The prices of any labor intensive service keeps skyrocketing because of these manipulative policies. So what can you expect? Volatility. And lots of it. And if you think it'll be predictable, good luck.

Here¡¯s the thread ¡ª I think he makes a good point. What do you guys think? 

https://twitter.com/prestonpysh/status/1470792736626331659?s=21

The flaw there is that most all CBs are doing the same thing so the impact of M2 and USD float does not matter, there is no opportunity to take advantage anywhere and in fact for the high quality of the US economy our rates are some if not the best out there so foreign demand will continue. The alternative is not great, the UK 10 yr is lower, the Germany rate equiv is still negative. Japan has lower impact because they have been at QE for 30 plus years and the market does not think it will change nor is the beta as high, their M2 growth is not as severe relatively speaking as the US since as mentioned they have been locked down for a long long time.

I dont like to see gold biased analysis, not sure that is this persons approach but I rarely ever see economic discussion about monetary policy that is not biased towards a gold investment. The flaw with a gold based investment is that the entire universe of currency is flowing in the same direction and gold is not a true inflation hedge when CBs are all doing the same thing, gold has been going nowhere even with inflation raging because the market does not fear the risk of hyper inflation due to coordinated monetary policy objectives and also from seeing Japan going at this for 30 years and having severely muted inflation results. So i am not sure what could push gold without a true knee buckling inflation shock which CBs cannot defend?

The guy is making a case for bitcoin 

Even worse really...BTC is not a hedge of anything, as we have discussed before. It cannot replace a currency because to get it you have to use the currency in the first place, it is also not broad based, there is no advantage of really any kind...it isnt safer it isnt more cost effective it isnt with less risk, it is not pledged to something that has intrinsic or utilitarian value (gold has some uses outside of a pseudo inflation hedge angle). BTC is a boutique investment with a limited circulation but to replace a economic currency it has to serve the purpose of the replacement and do so in a way that is economically better in most all aspects to that which it replaced. 

I like economic discussion about monetary policy from economists not gold or bitcoin biased investors who have a reason to gain from their analysis in a financial way that they are supporting in the analysis.

The advantage bitcoin has is the fixed supply 

¡°I own Bitcoin because it's the one thing they can't manipulate or control. Remember it's not about nominal fiat gains. It's about protection and growing buying power. If there's one thing I'm confident of, it is this: the manipulative actions of central banks will continue to accelerate and fiat debasement will keep getting worse. Plan accordingly.¡± 

I think real estate is good investment. However, it¡¯s a pain to maintain if you are going to have tenants. Most of them ruin everything because it¡¯s not theirs. In CT you can¡¯t evict a tenant until they haven¡¯t paid 6 months of rent and then you¡¯re beat. Also obviously have to factor in taxes, insurance, etc¡­.

Problem is that the moment BTC went into futures and OTC products, through funds etc then the concept of finite quantity is gone, its poof it is history. Remember back when people were cheering for BTC futures and I was not in support of that? The control of supply is destroyed when futures were created, manipulation happens more in futures than anywhere else. 

Having a limited supply does not mean it has any kind of hedging or benefit especially when the origin of purchase comes from the exact currency being called as faulty.

Yeah I agree with that a little. But I still think the fixed supply means something over time. 

@I_Need_A_Detox

 Did you ever find an apt complex to invest in?  The wife put $30,000 in a REIT.  I'm watching some condos in a ski resort area to purchase and then AirBnB.  Supply is going up and they are starting to get competitive.  Still far from 2021 prices, so I will hold.  What are your current thoughts?