85 replies to this topic

[tunt01]

i think flat/up until people realize what inflation is going to do to this economy and then who the hell knows.... could be back to 600 as p/e ratios get crushed.

best to try to buy commodity oriented and non-dollar companies on the long side. companies in technology (non-dollar customers), energy (non dollar assets), and materials maybe...

Long term, large multinationals will carry the day due to their overseas exposure. P&G selling into Brazil/India is a far better bet than some domestic US company selling to a US consumer.

[Athanasios]

best to try to buy commodity oriented and non-dollar companies on the long side. companies in technology (non-dollar customers), energy (non dollar assets), and materials maybe...

Yeah, I hear ya. I still think we will see it coming before it really hits. I did well in alcoa (aa) and aav (advantage) when they hit very low levels and the global economy had not weakened so much. Now they have near doubled while the international markets look like they have been beaten up since then, so I took the profit. I will definitely look back to them when I move back in.

[cathological]

Yeah, I hear ya. I still think we will see it coming before it really hits.

What exactly are you waiting to see? It sounds like you already think it's going to happen. Glad to hear you did so well.

[Athanasios]

Yeah, I hear ya. I still think we will see it coming before it really hits.

What exactly are you waiting to see? It sounds like you already think it's going to happen. Glad to hear you did so well.

Sorry, I was a bit fuzzy there. I was saying we will see inflation happening before it becomes a big issue. The next numbers that come out will not go from something like 1.2% to 15% in one reporting period.

[tunt01]

inflation will hit the market in a hurry. it may not be 1 bombastic event like lehman bros going bankrupt in sept., but the move will be quick. people will react when they see the triggers of inflation on the horizon. they won't wait for the CPI to print.

[lunarsolarpower]

inflation will hit the market in a hurry. it may not be 1 bombastic event like lehman bros going bankrupt in sept., but the move will be quick. people will react when they see the triggers of inflation on the horizon. they won't wait for the CPI to print.

Where will the action be when this occurs? Commodities? It seems that economic activity will have to pick up for energy prices to bounce back. There has to be a better way than TIPS to bet on inflation. High inflation concurrent with high unemployment would set the stage for massive political instability. Maybe Halliburton/KBR will be the best investment this century even after W.

[tunt01]

Where will the action be when this occurs? Commodities? It seems that economic activity will have to pick up for energy prices to bounce back. There has to be a better way than TIPS to bet on inflation. High inflation concurrent with high unemployment would set the stage for massive political instability. Maybe Halliburton/KBR will be the best investment this century even after W.

if i knew this, i would be the most valuable person on planet earth.

- the best way to bet on inflation is through equities linked to inflationary trends like commodity oriented companies (oil, gas, gold, etc.). equities have unlimited upside in earnings potential unlike bonds which are capped at whatever fixed rate they get (unless they are converts or w/e). that's why I suggested commodity oriented stocks.

- i do not view commodities as an asset class by themselves. i would never invest directly in DRAM chips anymore than I would in gold. it doesn't yield any $$$. however, i have used futures as a hedge against positions.

- another good way to bet on inflation (specifically US dollar linked inflation) is to bet on the countries and consumers of countries where their economic becomes favorable in that environment. so countries like Brazil where they have growing natural resources (more oil discoveries) and a burgeoning populous lends itself well a good economic future. so just buying something like Telemig Cellular in Brazil (cellphone company in brazil), is a simple way to bet on a negative US dollar environment. you are hedged by owning a business that generates Brazilian Reals.

I don't know when it comes, or how bad it will be... i think we muddle along here for a while. But trying to anticipate an inflation burst and exactly when it happens is no easier than trying to figure out when the housing meltdown is going to occur.

i told my last boss (i work in the investment business) in 2005, that the consumer was toast and housing was going to be a disaster. i started betting against real estate in early 2005, then i realized i was early and cut it back but still held the view that we were headed into oblivion. everyone at the investment fund i worked at thought i was basically some negative doom and gloomer who was just completely negative for no reason other than being a pessimistic person by nature.

well i was early, but i was right. i try to protect $$$ first, then make a little bit. i don't care about trying to hit 30%+ returns... i care about safety + maybe making 10-15% w/ a high margin of safety.

it's not a very appealing approach to a lot of people, but more en vogue now, i guess.

Edited by prophets, 24 April 2009 - 01:59 AM.

[niner]

Thanks for sharing your expertise, guys. What do you think of emerging markets now? I've always liked the growth story and the non-USD aspect of them. Now that they've been whacked so severely, they look attractive. Am I missing anything here? And speaking of recent carnage, how about REITS?

[tunt01]

i haven't looked at REITs lately. REITs in developed markets like the US are all heavily leveraged. Most need to be restructured (debt converted to equity) and will face years of declining rents, because most of their customers are retailers which are consolidating. Imagine being the REIT which holds all the leases on Circuit City in the US, your client just went bankrupt and you are now watching 500+ stores close. You'd have to be pretty selective like looking only at companies which hold industrial leases or what not (i'm not even 100% sure).

They may be attractive since they got whacked, but imagine what will happen if we hit an inflationary outcome. 1) Your cost of borrowing debt (what is backing the equity in a REIT) will explode like interest rates did in the late 70's. 2) The REIT's customers will be even worse off because their customers purchasing power will likely decline and 3) the market will begin demanding higher yields -- so whatever % dividend you are seeing on the REIT today of say 8-9%, the market will suddenly say, "hey I can get US Treasuries for 6-8%, I now expect 9-12% on a REIT."... and that's where you get your p/e compression.

REITs in newer markets (the Philippines has legislation in the Senate now) are worthwhile, but much harder to evaluate for individual investors. These real estate properties are largely unencumbered and transitioning from high corporate tax rates (~30%) to lower nominal REIT levels (~10-15%).


i don't know what the answer is 100%. I can only give you some basic advice on what to consider parameter-wise. I typically like to buy carnage/restructuring/screwed up companies that the market doesn't understand/hate/lie at the periphery of what everyone else is doing. but i'm not up on REITs 100%.

[Shannon Vyff]

We are taking advantage of the real estate down-turn by purchasing a home worth 360,000 one year ago for 270,000. We'll sell our stocks that are up (Apple is still :-) ) for the downpymt. The rest of our stocks are still down 48%... hope the market recovers--when we sell our current house we are going to buy into some of the best stock deals that can only go up

[Mind]

I was wondering if housing would be a good investment during an inflationary period (not just because the housing market is currently depressed - which is also good). Do housing prices inflate along with commodities and dollars? Or is housing a decent investment during a big inflationary period because it is a good time to hold debt?

[tunt01]

strictly focusing on inflation - typically all income generating assets get killed by inflation. think of it this way:

- I can buy a risk-free US Government bond at 3%, 4%, 5%...8%...10%...12%

vs.

- I can make a riskier purchase and buy a house for $100,000 and rent it out every year for $3,000, $4,000, $5,000...$8,000...$10K, $12K

etc.

The US Gov't bonds are a risk-free choice. They are backed by the printing presses & tax payers of America. Your house rental % rate on the purchase should run at a minimum of +3-5% above what is the government rate. That is if gov't bonds are at 3%, you should at least get rental income of 6-8% on your property -- higher than the gov't bonds because it's riskier. This is the so-called 'risk premium spread'. It also explains why the US Gov't can issue bonds to China at 2-3% and your mortgage costs you 5-6%. You are a riskier bet than the US Gov't, when people are making loans.

So when inflation spikes and bond yields go higher, because the value of dollar purchasing power is declining (too many dollars) and the value of the bonds are plummeting -- the value of your home plummets right along side it. Gov't bond yields go higher to say 6%. Then your house must now yield 9-11%. But the person paying your monthly rental fees, they don't have a commensurate increase in income. So what happens is you still get that flat monthly income of say $6,000 but the value of your house went down to make that $6,000 now yield 9-11%. Say you were getting 6%, $6,000 on $100,000. Now that means the house is worth $66,666 (9%) - $54,545 (11%) with the same $6,000 payment coming in -- and if you have a mortgage on it, the equity could be probably wiped out.

I'm ignoring a lot of other factors to sort of simplify it, but showing you the 90% that matters and ignoring the 10% of miscellaneous piddly stuff.

Theoretically, as you can see -- the best thing to do is to borrow $ in US Dollars and go buy a home that pays you a rental payment in non-US dollars... like buying a home in Brazil, India, etc.


- You obviously don't have to buy a home as a rental property, but this is fundamentally what drives the value of your house. It is the rental paying capacity (income levels) of the people in your area.

- I don't think we have a 70's style inflation problem, but a minor whif where we see like 5% for 2 years is probably in the cards.

- Do not solely focus on inflation. If houses are generally worth $100 K and they are selling for $50 K because people are going bankrupt (blood in the streets), then 5% inflation for 2 years won't mean much, because you are making 2x your money... you can handle a little inflation, if you buy cheap enough.

- the assets that are more protected by inflation are listed in my prior comment in this thread (commodity oriented companies, stocks over than bonds, etc.)

Edited by prophets, 26 April 2009 - 12:54 AM.

[eternaltraveler]

Prophets I think you're ignoring the key part of the equation in buying real estate. That being that you don't have to pay for it. Banks are kind enough to buy it for you and tenants are kind enough to pay back the bank. Thanks to inflation the bank gets paid less every year and rent does indeed go up with inflation.

[Shannon Vyff]

My theory on homes right now is that they are selling for way below what it would cost to make them, and lumber prices have not fallen. We've got 5 offers out, will be doing 4 more tomorrow--we're taking our time to get something that is a good deal even for "now" (also homes that have the most potential to rebound--higher end finish out in upscale exclusive communities). Good point there Eternal Traveler, I've always been a proponent of owning one's home versus renting, I've read all the arguments on both sides... I bought my current home two years ago for 144, I owe 108, I can sell it now for 155 to 179 (will start at the mid point of price per sqf for my neighborhood then lower it a bit depending on what sort of interest there is). Half of house buyers right now in this area are first time house buyers looking to take advantage of the eight thousand dollar tax credit, my entry level-starter home (five bedrooms, 2600 sqf with a large yard, built 10 years ago with some nice details like tile) is above its value in this market--the higher end homes are the ones that have been hit, so its a win-win situation for us that we'd be irresponsible to not take advantage of. I'll have a hard time deciding where to invest money after I sell my current home...

[eternaltraveler]

My theory on homes right now is that they are selling for way below what it would cost to make them

perhaps some are in some areas, but if you can actually finance a construction loan you're still generally better off building. But it's very difficult to get a construction loan at the moment.

and lumber prices have not fallen.

what?

building materials have plummeted in cost; they are dirt cheap right now. In 2005 random length lumber futures were between 260 and 420. Now they are in the 170s

Edited by eternaltraveler, 26 April 2009 - 07:20 PM.

[tunt01]

Prophets I think you're ignoring the key part of the equation in buying real estate. That being that you don't have to pay for it. Banks are kind enough to buy it for you and tenants are kind enough to pay back the bank. Thanks to inflation the bank gets paid less every year and rent does indeed go up with inflation.

- you do have to pay for it, it is a matter of when, not if. you are taking out a loan, you are responsible for the loan whether you pay it off in 30 years, 10 years or 2 years. it's not 'free money'.

- inflation in a status quo scenario of ~2%, yes maybe rent will increase alongside it, though I tend to think that will not be the case in the coming years because a) we have tons of excess supply of housing, so rents will not increase as much as other costs like gasoline/food and b) the whole point of a much higher inflation problem (higher than 3%+) is that incomes do not rise in lock-step with these inflation costs and the consumers will begin to pay less in some areas in order to be able to afford others. the cost of living rises, and consumers except less goods, so their quality of life suffers.

I cannot forsee any scenario where rent income rises in-step with a materially higher inflation outlook, when there has been such an overbuilding of housing capacity. Housing/rental costs will give way to food/gasoline and other daily necessities. In a materially higher inflation outlook, I see stagnating/lower levels of quality of life in the US as the outcome.

I'm obviously not certain on what the inflationary outlook will be exactly, because it depends on policymakers.

[eternaltraveler]

you do have to pay for it, it is a matter of when, not if. you are taking out a loan, you are responsible for the loan whether you pay it off in 30 years, 10 years or 2 years. it's not 'free money'.

if you would have read the next sentence of my post you would have seen the basis for my statement and wouldn't have felt the need to explain what the definition of "loan" is. Properties buy themselves, at least any ones I would ever consider as an investment.

is that incomes do not rise in lock-step with these inflation costs

no of course not. There is a lag. And I agree rent prices do have room to come down. But if you have a 30 year mortgage there is a lot of room for erosion on your monthly payment from inflation, and plenty of time for rent prices to catch up to most of the inflation.

Edited by eternaltraveler, 26 April 2009 - 09:00 PM.

[tunt01]

i did read what you wrote. i don't think you understand what serious inflation means

if you would have read the next sentence of my post you would have seen the basis for my statement and wouldn't have felt the need to explain what the definition of "loan" is. Properties buy themselves, at least any ones I would ever consider as an investment.

i'm not much for real estate. there must be deals out there now with people going bankrupt. but i think what you are describing is a dangerous way to invest money, unless you buy the property very very cheaply so that you can effectively rent it at way below the going rate. the only thing you are really getting is the tax break from the IRS. you are depending on the typical american consumer to pay you a monthly rent. a lot of people have credit card and financial problems... there is a reason why less loans are being made to consumers. if you think that's a safe bet -- expecting the average consumer to rent your home a competitive rate, then i think you are mistaken. to me, it's a bad bet... and i've been consistent in that viewpoint for 3 years now. the average consumer is upside down on their own balance sheet and selling to them, renting to them, is a shitty business proposition.

you can buy stocks on margin (effectively debt/mortgage) and pull the same charade and it is way safer, because it can be done in companies like proctor & gamble that are far safer in their outlook than the typical american consumer becuz they have business expanding into Brazil/India, etc. and you can liquidate your stocks in seconds, whereas getting rid of a bad house investment will take months.

no of course not. There is a lag. And I agree rent prices do have room to come down. But if you have a 30 year mortgage there is a lot of room for erosion on your monthly payment from inflation, and plenty of time for rent prices to catch up to most of the inflation.

if the fed prints money like they are threatening, and we get a surge of inflation.... there is no lag... there is nothing but pain. you cannot raise rents and there is no income/money to pay higher rents. no improvement in incomes against broadly higher prices. it is argentina all over again, and you'll never see higher rents while their cost of living (food/gas/etc.) elsewhere surges. go to the CPI report out of the bureau labor statistics and look at what % goes into each area of consumer spending.... spending on housing (kind of a screwy calculation in the first place) won't rise for the foreseeable future. we've just been through 20 years of increases in housing values/rents (until this last year)... idk how you can believe that somehow the fed printing money... say we have 10-20% more dollars in circulation will suddenly lead to higher incomes to pay you a rent, cuz there is no way it will happen.

US Incomes are going to stagnate/grow slowly for decades, as they reach parity with India/China and the rest of the world. If you think you are going to get an increasing rent check of 2%+ out of the average american worker over the next 5-10 years... I think you are deluded.


i also dont know how anyone can actually believe that in an economy with the highest level of surplus of houses in more than 50 years, somehow landlords are going to raise rents. if you are renting a home, you are in a buyers market... not a sellers. good luck. how the hell can you raise rents, when the market is flooded with empty houses... ?? it will take years to clear this inventory.


the best thing you can hope for is that people who rent get a tax break like people who own their homes. this should be in the tax code, i dont know why home owners get to tax deduct their interest expense and no one else can. i think it's pretty discriminatory against the poor.

Edited by prophets, 26 April 2009 - 11:18 PM.

[eternaltraveler]

i did read what you wrote. i don't think you understand what serious inflation means

then it would have been nice if you would have explained what serious inflation means instead of defining what a loan is

unless you buy the property very very cheaply so that you can effectively rent it at way below the going rate

sounds like something you would want to do regardless...

you are depending on the typical american consumer to pay you a monthly rent. a lot of people have credit card and financial problems

No, you are depending on the population of the area where you buy a property to pay you rent. This population may have very different demographics from the country at large. I wouldn't recommend trying it in New York, Chicago or Detroit or any area where it's illegal to kick people out who break their terms of lease (which eliminates most of the east and west coasts). Even the typical american consumer who is buried in useless debt requires two things; food, and shelter and that's what they'll spend their money on.

if the fed prints money like they are threatening, and we get a surge of inflation.... there is no lag... there is nothing but pain. you cannot raise rents and there is no income/money to pay higher rents.

the surge of inflation you are referring too is the best thing that could happen to someone who has a large amount of debt at a fixed rate. It erases it. It also will cripple the borrowing capacity of our nation, and screw all ultimate holders of debt even more. The first one is fine, the nation's borrowing capacity should have been crippled long ago.

you can buy stocks on margin (effectively debt/mortgage) and pull the same charade and it is way safer

buying stocks on margin is another investment strategy. It is something I would never recommend to anyone that wasn't a financial expert (and most financial experts recently lost their shirts). Calling it safer than choosing a good rental property is absurd.

If you think you are going to get an increasing rent check of 2%+ out of the average american worker over the next 5-10 years... I think you are deluded.

In 5 years I don't know. In ten years in dollar number amounts rents certainly will increase. I expect them to be at a lower level in inflation adjusted dollars but that doesn't matter because you aren't paying your debt with inflation adjusted money. You are paying it with what is increasingly becoming monopoly money. In 20 humans will be increasingly replaced with machines in most lines of work and the US will become effectively communist. For those of you who don't think you'll be replaced by automation at that point the US is not where you'll want to be, if you do think you'll be replaced it won't matter where you are.

i also dont know how anyone can actually believe that in an economy with the highest level of surplus of houses in more than 50 years, somehow landlords are going to raise rents

where are you getting this? No one said anything about raising rent except you. In inflation adjusted dollars rent will certainly fall for the short term. Do you expect rent to be the same in monopoly money number amounts in 15 years?

it will take years to clear this inventory.

yes... years is the short term. We aren't talking about day trading here.

Edited by eternaltraveler, 27 April 2009 - 04:03 AM.

[tunt01]

honestly i disagree with your analysis and again, i don't think you realize what you are suggesting. you are confusing real and nominal figures and just assuming "things work out in the end cuz people will pay more."

what you are effectively saying is:

1. inflation turns dollars into monopoly money
2. inflation makes my debts worth less on a real basis, cuz it's monopoly money
3. i will get less rent money on a real basis, cuz it's monopoly money
4. at some point in the next 15 years rents will rise on a nominal basis
5. NONE OF THIS MEANS YOU WILL ACHIEVE A RATE OF RETURN ABOVE INFLATION AND ABOVE YOUR RISK IMPLIED COST OF CAPITAL more likely you will stagnate and generate sub-par to no returns.

and i would submit to you again that all things being equaled in terms of valuation vs. risk:

1. if inflation turns dollars into monopoly money
2. inflation makes your debts worth less on a real basis, cuz it's monopoly money
3. leverage up your stock portfolio and invest in strong brand names that are selling into foreign markets and earning non-dollar revenues... like Nike selling into Brazil, like P&G selling into India, like YUM Foods selling into China.
4. your investment will have a much better chance of rising on a real basis and will likely keep up with broader inflation trends
5. you WILL achieve an attractive risk-adjusted return on a REAL basis against inflation and you can liquidate a stock in seconds vs. months in a home. you have a huge advantage in liquidity.

and anyone in this thread or on this planet who thinks US housing is going to be the best place to put your money.... i would point to tulip mania in holland, tech stocks in the late 90's and any other sector that blows up in a bubble. you don't go straight into the bubble busted sector, because it was broken economics that was driving it in the first place. the sectors that lead this economy out will be all export based. even obama has said it himself.

you invest where there is REAL economic growth on a REAL basis.

Edited by prophets, 27 April 2009 - 04:24 AM.

[lunarsolarpower]

In 20 humans will be increasingly replaced with machines in most lines of work and the US will become effectively communist.

Yeah. How should one invest for the long term taking Robotic Nation Evidence into account? I suppose it's only a subset of what singularitarians anticipate so the question becomes effectively unanswerable if you take that viewpoint.

[tunt01]

In 20 humans will be increasingly replaced with machines in most lines of work and the US will become effectively communist.

Yeah. How should one invest for the long term taking Robotic Nation Evidence into account? I suppose it's only a subset of what singularitarians anticipate so the question becomes effectively unanswerable if you take that viewpoint.

if you honestly think this is the case, then housing will probably be nationalized and the ability to pay rents is going to go to nil.

[eternaltraveler]

honestly i disagree with your analysis

thats fine. Sometimes I disagree with my analysis once I have more data.

you are confusing real and nominal figures

I am not confusing real and nominal figures. (unless I mis-wrote something somewhere, I would check but I think you have more motivation to find my errors than I do )

1. inflation turns dollars into monopoly money

are you suggesting that inflation does not devalue dollars such a given number of dollars today will buy less tomorrow? because that's kind of the definition.

2. inflation makes my debts worth less on a real basis, cuz it's monopoly money

well owners of debt certainly account for expected inflation when they issue loans. However when inflation is over and above their expectations, yes, it makes debt worth less on a real basis.

3. i will get less rent money on a real basis, cuz it's monopoly money

Yes and it has nothing to do with the monopoly money aspect of the dollar. It has to do with some of the facts you mentioned. Namely a large surplus of houses and declining real income.

4. at some point in the next 15 years rents will rise on a nominal basis

Probably. I wouldn't look at timelines much beyond 15 years due to other emerging factors.

5. NONE OF THIS MEANS YOU WILL ACHIEVE A RATE OF RETURN ABOVE INFLATION AND ABOVE YOUR RISK IMPLIED COST OF CAPITAL

My implied risk is how much it would sell for at the point it ceases to be able to pay it's own mortgage plus however much of it is paid off at that point minus however much was originally paid. If the home loses half it's value and I pay off half the mortgage from rent before it ceases to become profitable it would still break even, as it no point did I actually pay anything (yes I got my mortgage at a time when it was still possible to have a 0% down payment).

3. leverage up your stock portfolio and invest in strong brand names that are selling into foreign markets and earning non-dollar revenues... like Nike selling into Brazil, like P&G selling into India, like YUM Foods selling into China.

I have nothing against leveraging up my stock portfolio, but personally know more about drug development and therefore working on straddling upcoming clinical trials. These are things I have some interest in and would research to some extent anyway. I'm not very interested in Proctor and gamble selling toothpaste to India (though I do acknowledge that it probably has profit potential, it is just too boring for me to research in the depth required). I am more than capable of leveraging a stock portfolio and letting tenants buy me houses (the two do not compete to an appreciable degree).

Also, I don't remotely disagree that it is wise to diversify out of US holdings

Edited by eternaltraveler, 28 April 2009 - 03:05 AM.

[eternaltraveler]

if you honestly think this is the case, then housing will probably be nationalized and the ability to pay rents is going to go to nil.

given a long enough timeline this probably will happen. Not for several decades though.

Also I'd be a fool to claim I know what form future american communism will take, but we have some time.

This will happen in all democracies as people will vote to not starve to death when they are all replaced at walmart and mcdonalds and have nothing else to do because they are not capable of higher level work. Maybe there will be a lot of makework or walmart auto cashiers and shelf stackers will be made illegal. In ten years the picture should be clearer.

[eternaltraveler]

Yeah. How should one invest for the long term taking Robotic Nation Evidence into account? I suppose it's only a subset of what singularitarians anticipate so the question becomes effectively unanswerable if you take that viewpoint.

I wouldn't mind getting in on development of some of this automation that is going to replace everyone. I have some interest in robotic surgery.

[tunt01]

My implied risk is how much it would sell for at the point it ceases to be able to pay it's own mortgage plus however much of it is paid off at that point minus however much was originally paid. If the home loses half it's value and I pay off half the mortgage from rent before it ceases to become profitable it would still break even, as it no point did I actually pay anything (yes I got my mortgage at a time when it was still possible to have a 0% down payment).

this isn't how risk is priced in the traditional world of finance, it's how you think about it on a piece of paper.

i tried to explain it simply as the spread above US Gov't (risk free) rate where if the 10 year government bonds are 3% and your mortgage is 7%, the risk spread is 4%.

there has to be some real pricing of risk in a transaction, even without an adjustment in the value of the house.

if you issue a personal loan of $10,000 to an illegal immigrant with no documentation of assets/income vs. loaning the same $10,000 of money to IBM, you have engaged in entirely different risk profiles and the rate of interest you charge should account for it.

and in your example, you did lose something. you wasted your time earning 0$, and this is why i said your returns will stagnate/go nowhere. if the US banking system engaged in a series of transactions where they issued loans and borrowed money (effectively what banks do) and "broke even" (aka earning nothing) over a the course of several years, they would be shutdown eventually.

again, you'd be better off borrowing $ and buying any dividend yielding stock in that scenario... especially one which sells overseas and protects you from inflation.

regards

pro

[eternaltraveler]

Reality will definitely prove me right or wrong in my decisions and you are absolutely correct in saying that I do risk the time value of my time spent on these activities.

Cheers

Edited by eternaltraveler, 28 April 2009 - 03:56 PM.

[Athanasios]

I went ahead and put half of what I took out recently into UCO, a double long oil ETF and will double down if oil drops below $40 again. Many here may like UCO since I have heard a lot of pro oil talk on the forum.

BTW, this is an IRA account. I don't think double long ETFs work the same in a taxed account, so you may want to check on the taxes you would be responsible for before buying in a taxed account.

Edited by cnorwood, 28 April 2009 - 06:17 PM.

[tunt01]

Reality will definitely prove me right or wrong in my decisions and you are absolutely correct in saying that I do risk the time value of my time spent on these activities.

Cheers

k. i appreciate the discussion and do not want to end on a note of animosity. i wish you well w/ your real estate investments. i have a number of friends in miami, mostly around collins in south beach. it is quite a nice area and i've thought about living there personally.

gl w/ your properties.

-pro

[Mind]

I was just thinking for housing that if you were paying a mortgage, and suddenly there was hyperinflation, then you would be paying back the bank with inflated dollars at a fixed interest rate. Seems to be a good position to be in, as long as you have the dollars.