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« LINQCRED: A Hedge Fund Manager | Main | Using Trading Stops in an ETF Portfolio »

October 24, 2007



Tim - You have a much wiser and more effective method than most. Many average investors have missed out on a multi-year rally, perhaps by too much confidence in the wrong sources.

At this point there is a question: Do such investors want confirmation of their past wisdom or information about the future?

Thanks for (another) wise comment.



I do love the "keeping track of what to be worried about"! My internet readings and searches are for things to be excited about. Does the old saw "the market climbs a wall of worry" still apply.

To housing, those claiming there will be no bottom this time will miss it. Those looking for the bottom will miss it. Suddenly one day we will all wake up and realize the bottom was a year earlier.


The LINQCRED folks concur with puny me that it's all about affordability

I still don't understand why stocks appear to need rate cut rumors to rally.

Bill aka NO DooDahs!

Gee, Texas is a big state, and Dallas, FW, and Houston are big metro areas. I wonder what their data looks like?


At prices around 250X rent down from about 275X over the last one year and median debt-to-income ratio in the neighborhood of 50%, the psychology has changed. In aggregate, it is about affordability (which is more extended than at the peak of the last cycle in 1991) and plenty of qualified buyers including yours truly and many of his friends are on the sidelines. The recent credit crunch has definitely sharply affected sales over the last month because of the widespread usage of jumbo loans. That situation should ease soon, probably as Malpass says "with some sand in the credit gears". Assuming the usual sticky nature of home prices, Orange County's cycle bottom in nominal terms though could quite possibly be in the 2010-2012 timeframe. Some information from the past, although OFHEO may not be the best index for OC due to large usage of jumbo loans:

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