St. Louis Real Estate Market [status/news/info]

the central scrutinizer · Jan 22, 2008#112008-01-22T03:44+00:00

innov8ion wrote:Use your tax returns to pay down revolving and other debt, people.

I agree about paying down revolving debt, assuming they are charging more than the return on cash.

innov8ion wrote:Lessen your exposure to stocks and increase it in bonds and precious metals. More advice here: http://www.smartmoney.com/onthestreet/i ... =200101101

Better advice here: http://www.berkshirehathaway.com/

Stay in stocks. In fact, conditions like this create attractive buying opportunities. You want to be buying when everyone else is selling.

As for precious metals:

"Owning gold is dumb" - Charles T. Munger

innov8ion wrote:We're lucky the market was closed on MLK day as the world markets are in panic. This is no joke but nothing to get frightened over either, yet.

Investors would be wise to ignore the day-to-day machinations of the market.

innov8ion · Jan 22, 2008#122008-01-22T03:53+00:00

The Central Scrutinizer wrote:Oh puh-leeze. These sorts of things come around regularly. Except no one seem to remember that.

Which is why a lot of people are going to lose a lot of money. The phenomenon occurs from time to time, but most don't learn.

The Central Scrutinizer wrote:The "largest banks on the planet" are at zero, I repeat ZERO, risk of insolvency.

Have you not noticed day after day of write-downs? UBS AG and Bank of China Ltd. led financial companies lower after banks lost more than $100 billion on credit investments. Ref: http://tinyurl.com/2za7mo

The Central Scrutinizer wrote:"Markets" may be in panic mode, but investors aren't.

And whose money is in the markets? Investors? Oh, I see.

The Central Scrutinizer wrote:Better advice here: http://www.berkshirehathaway.com/

Stay in stocks. In fact, conditions like this create attractive buying opportunities. You want to be buying when everyone else is selling.

As for precious metals:

"Owning gold is dumb" - Charles T. Munger

So you like the contrarian play? Me too. The problem is that the contrarians right now are the sellers. There are still plenty of bulls left to squeeze.

However, the class of stocks that Warren Buffett invests in aren't bad plays as part of one's portfolio for times like these. I don't care about the Munger quote. Gold has done quite well and will continue to do so throughout the market turmoil.

As far as paying attention to market trends, I suppose doctors shouldn't pay attention to a patient's vital signs either. "Just stick it out, no need to take losses yet.

"

People should diversify their risk and play more conservatively. Don't get me wrong, the sky isn't falling. But your capital will if you don't manage the risk in your portfolio well.

the central scrutinizer · Jan 22, 2008#132008-01-22T05:45+00:00

innov8ion wrote:
The Central Scrutinizer wrote:The "largest banks on the planet" are at zero, I repeat ZERO, risk of insolvency.
Have you not noticed day after day of write-downs? UBS AG and Bank of China Ltd. led financial companies lower after banks lost more than $100 billion on credit investments. Ref: http://tinyurl.com/2za7mo

Losses <> insolvency

The Central Scrutinizer wrote:"Markets" may be in panic mode, but investors aren't.

innov8ion wrote:And whose money is in the markets? Investors? Oh, I see.

I should have said "Investors shouldn't panic". Remember, day to day market shifts are irrelevant. Unless you own an index fund (I do not), the "market" is meaningless. And don't make the mistake that everyone in the market is an investor.

innov8ion wrote:
The Central Scrutinizer wrote:Better advice here: http://www.berkshirehathaway.com/

Stay in stocks. In fact, conditions like this create attractive buying opportunities. You want to be buying when everyone else is selling.

As for precious metals:

"Owning gold is dumb" - Charles T. Munger

So you like the contrarian play? Me too. The problem is that the contrarians right now are the sellers. There are still plenty of bulls left to squeeze.

Buying undervalued stocks and holding them for long periods of time is not "contrarian". It's wise investing.

innov8ion wrote:However, the class of stocks that Warren Buffett invests in aren't bad plays as part of one's portfolio for times like these.

I'm not sure what that means. The "classes" of stock Buffett buys are the same that anyone can, and should, buy.

innov8ion wrote:I don't care about the Munger quote. Gold has done quite well and will continue to do so throughout the market turmoil.

An ounce of gold purchased for $675 in Jan of 1980 is worth $877 today. An annual rate of return of .93%. And that doesn't even account for inflation. Still think it's a good investment? Maybe you should care about the Munger quote!

innov8ion wrote:As far as paying attention to market trends, I suppose doctors shouldn't pay attention to a patient's vital signs either. "Just stick it out, no need to take losses yet. "

Again, unless you are buying an index fund, or for some odd reason are buying every stock in "the market", market "trends" mean nothing. What the market did today, yesterday or tomorrow has nothing to do with the intrinsic value of a piece of Coca-Cola or IBM.

innov8ion wrote:People should diversify their risk and play more conservatively. Don't get me wrong, the sky isn't falling. But your capital will if you don't manage the risk in your portfolio well.

People should limit risk by not making risky investments.

debaliviere · Jan 22, 2008#142008-01-22T13:57+00:00

The Central Scrutinizer wrote:Stay in stocks. In fact, conditions like this create attractive buying opportunities. You want to be buying when everyone else is selling.

I agree wholeheartedly - dollar-cost averaging.

And I would add to that the recommendation to invest in index funds that seek to match the returns of a specific market index such as the S&P 500, the total stock market, the Russell 2000, etc. A good way to stay diversified.

My target asset allocation doesn't change because the market's changing.

innov8ion · Jan 22, 2008#152008-01-22T15:01+00:00

Sorry to be blunt, but dollar-cost averaging is a fool's game.

http://www.sciencedirect.com/science/ar ... d9eb634271

"Dollar cost averaging has been widely criticized by economists and academic finance researchers as more of a marketing gimmick than a sound investment strategy (a way to gradually ease worried investors into a market, investing more over time than they might otherwise be willing to do all at once). Numerous studies of real market performance, models, and theoretical analysis of the strategy have shown that in addition to having the admitted lower overall returns, DCA does not even meaningfully reduce risk when compared to other strategies, even including a completely random investment strategy."

Buy and hold of major index funds is an ok strategy for extremely long-term investments.

Regarding gold. It just stands to reason that money would have flowed from gold to equities during the period that Munger quotes. It was a prosperous time. Now is the time for an upheaval in America and things will change.

Personally, I would be moving money out of the dollar and into the Euro. The Fed cut 75 basis points this morning before market open. They can't keep it up. Inflation is no joke.

debaliviere · Jan 22, 2008#162008-01-22T15:13+00:00

^

Guess it depends on how you look at it. If I had a large lump sum to invest today, I would certainly do it, as opposed to investing the same amount in small increments over a specified period of time. If I had $5k with which to max out my IRA right now, for instance, I'd do it, but I don't, so I make my contributions in small chunks whenever I get a paycheck.

And I won't be using the money I invest today for 30+ years, so (hopefully) I'll be okay.

the central scrutinizer · Jan 22, 2008#172008-01-22T15:23+00:00

innov8ion wrote:Regarding gold. It just stands to reason that money would have flowed from gold to equities during the period that Munger quotes. It was a prosperous time.

For the record, Munger wasn't talking about any particular period.

innov8ion wrote:Now is the time for an upheaval in America and things will change.

That is what the gold-bugs always say!

innov8ion · Jan 22, 2008#182008-01-22T16:28+00:00

Dollar cost averaging philosophy is good in one respect because it stresses continual saving like you say. Where I take issue is the indiscriminate and seemingly random reinvestment in addition to not adjusting portfolio risk over time.

As far as gold, check the Dow/Gold ratio. From the early 1980's to 2000ish, the DJIA outpaced gold. The tide has turned and Munger won't tell you because his money is in Berkshire Hathaway. I'm not a "gold bug" by any means but I think it's safer than the stock indices right now. Ref: http://seekingalpha.com/article/21641-d ... sh-picture

I would be more involved in bonds, the Euro and precious metals in addition to some Berkshire Hathaway type exposure.

What does this mean to downtown? Skyhouse very likely will not happen. Developments already in the pipeline should continue. The housing market will slow a bit but nothing too bad. Interest rates will continue to decrease a bit, loan restrictions will be tighter, and stagflation will be an issue.

debaliviere · Jan 22, 2008#192008-01-22T16:33+00:00

innov8ion wrote:What does this mean to downtown? Skyhouse very likely will not happen. Developments already in the pipeline should continue. The housing market will slow a bit but nothing too bad. Interest rates will continue to decrease a bit, loan restrictions will be tighter, and stagflation will be an issue.

Will the Fed's decision to lower the discount rate help matters any?

innov8ion · Jan 22, 2008#202008-01-22T16:44+00:00

^ First, I'm not an economist but I'm fairly well-read and welcome the opinions of others. It will help in the near-term no doubt. You see the DJIA has recovered about 300 points from market open. Interest rates will lower, giving mortgage borrowers an opportunity to refinance and improve their financial positions. Loan / credit restrictions tightening can help but it's not the total answer either. The root cause is our society of materialism. The Fed can do nothing about that and they can only adjust the rate so much before stagflation takes hold. That's my opinion.

matt · Jan 22, 2008#212008-01-22T16:45+00:00

We need to remember that real estate/housing markets are local -- even as finance has become global.

St. Louis central city has lost economic value through urban decline for decades. We've had bargain basement housing prices for too long. I think the price appreciation of the past 10 years has been solid but would agree that some of the units in select neighborhoods are probably a bit speculative and priced too high. It's not hard to figure out if you shop, compare and do a little research.

the central scrutinizer · Jan 22, 2008#222008-01-22T16:46+00:00

innov8ion wrote:As far as gold, check the Dow/Gold ratio. From the early 1980's to 2000ish, the DJIA outpaced gold. The tide has turned and Munger won't tell you because his money is in Berkshire Hathaway. I'm not a "gold bug" by any means but I think it's safer than the stock indices right now. Ref: http://seekingalpha.com/article/21641-d ... sh-picture

Like I said before, Munger was not refering to a particular time frame. He would have told you the same thing 50 years ago or 50 years in the future.

And his money is in a lot of places besides Berkshire.

In what way has the tide turned? What is different this time in comparison to all the other times the gold-bugs have said "the tide has turned". Just curious.

Remember, during the dot-bomb market, the dot-bomb cheerleaders (James Cramer being a big one) where all claiming that "this time it is different", and that Mr Buffett was out of touch. We all know how that one turned out. Lesson #1: It's never different.

innov8ion · Jan 22, 2008#232008-01-22T16:51+00:00

^ Don't look into the gold thing too much. I just believe that investing in commodities is a good diversification play during a recession. Warren Buffett is far from out of touch. He's more rational than most, obviously, and I like him. BRK-B was up 3.72% today. That's a telling sign. Too bad Warren and Charlie will have to pass the torch at some point.

the central scrutinizer · Jan 22, 2008#242008-01-22T17:16+00:00

innov8ion wrote:^ Don't look into the gold thing too much. I just believe that investing in commodities is a good diversification play during a recession. Warren Buffett is far from out of touch. He's more rational than most, obviously, and I like him. BRK-A is up 1% today.

I would say he's more rational than all!

markinlondon · Jan 23, 2008#252008-01-23T01:34+00:00

Myself, I went bargain hunting today. It's like an after Christmas sale! Seriously though, there are some solid companies out there that are undervalued. Perfect time to add to the long term portfolio.

downtown2007 · Jan 25, 2008#262008-01-25T03:30+00:00

Here is a story they did on Fox 2 tonight about the market Downtown!!!

http://www.myfoxstl.com/myfox/pages/New ... geId=3.2.1

irocktheparty2000 · Jan 25, 2008#272008-01-25T03:39+00:00

Downtown2007 wrote:Here is a story they did on Fox 2 tonight about the market Downtown!!!

http://www.myfoxstl.com/myfox/pages/New ... geId=3.2.1

Great bit! Thanks for the post.

stldtfan · Jan 25, 2008#282008-01-25T04:16+00:00

wow. very positive coverage.

Flamingo bowl highlighted. woo hoo

jcity · Jan 25, 2008#292008-01-25T05:20+00:00

wow, can someone PLEASE send that to the editors at the St. Louis Post Dispatch.

stlcardsblues1989 · Jan 25, 2008#302008-01-25T05:30+00:00

Thanks for the video. It's encouraging.

If you're going to buy a home, do it now.

Those lofts look nice.

chrisindowntown · Jan 25, 2008#312008-01-25T14:04+00:00

Definitely a nice feature. Certainly different from most of the gloomy Highway 40 features that have been running lately.

Lucas Lofts are very nice. A lot of units, but rooftop pool and deck are a nice perk.

Flamingo Bowl was defintiely cool to have in there, but it was strange they showed a shot of the boarded up Copia...

gelatinousendive · Jan 25, 2008#322008-01-25T22:46+00:00

There were TWO positive articles in the Post today about the local real estate market, written, I'm sure, as a press realease from the realtor's association.

They reported that small measures show an improving market. Me, I took this to mean things are not tanking here in the 'Lou.

All I know is that I missed out on a piece of property I took for granted no one wanted. Took my own sweet time to get around to making an offer on it. Found it was gone and for more thanI would have paid for it.

downtown stl fan · Jan 26, 2008#332008-01-26T05:27+00:00

I stopped by Pyramid's office on 10th and Washington last week and spoke with a friend that works there that said they'd had a really good month for sales. I think things are picking up and it reinforces the Forbes article I read last month that said St. Louis should see an increase in housing values in 2008. We were one of their top 10 cities listed.

stlcardsblues1989 · Jan 26, 2008#342008-01-26T06:19+00:00

That's great to hear!

Americans are having kids at a rate that matches 1961's births, so I guess people need bigger houses!

It would make sense to buy a home in St. Louis now, since prices are low all over the country, and the outlook seems pretty good considering where the rest of the country is at.

scottinstl · Jan 26, 2008#352008-01-26T14:51+00:00

A Reelter ad says it's a great time to buy, must be true!!

St. Louis Real Estate Market [status/news/info]

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