Real Estate, Banks, Stocks, U$D, Commodities
I see a lot of speculation on where we are and where we are headed. My 2 cents:
The real estate market bubble is not anywhere near done, and even when it does bottom, it will be like busts of past bubbles and take years and years to get back to appreciation, inflation will help on paper but not in "real" terms. MAny of these companies will be bankrupt and de-listed. People that got burned by the tech/stock market bubble went into real estate, believing house prices would never go down because "housing prices have never gone down since record keeping started, decades ago, so it will never go down in the future. They're not making anymore land you know".....so the realtors and lenders were telling them. Now the speculation in real estate is over and prices are headed back down to the level that wage earners can qualify for traditional loans. HOME PRICES WILL GO DOWN UNTIL THE AVERAGE WORKER CAN QUALIFY FOR A LOAN BASED ON REAL INCOME FROM THEIR PAY CHECKS! Prices are headed back to what they were in the mid to late 1990's.
Investing in the mortgage companies, home builders, and banks is way too risky.....think falling knife. I don't see the risk reward of trying to call a bottom????
The next kick in the rear is going to be further decline in the dollar. The dollar is going to be the next "carry trade" currency of choice. We are going to lower interest rates to + or - 2.0% and cover the world in a blizzard of US dollars. Borrowing USDs and investing in commodities is going to be the new hedge fund game. The market is starting to realize that the only real store of value is in the "real" things the world needs. The natural resource assets held by companies, in safe parts of the world cannot be reproduced, they are worth a fortune.
Gold can be argued as an investment because it has no use. Like it or not, it is seen as a store of value and it is going up.
I see tough sledding ahead, wild volatility, crisis after crisis developing. My strategy is to stay invested in commodities, including energy, grain, fertilizer, metals, and some gold, and investing in the companies that help produce them. Most of my stocks are Canadian listed with some Norwegian listed stocks. The dollar is going to be a hot potato and sitting on the sidelines in USDs will further decrease future buying power. Food, fuel, healthcare, education, and basic materials prices are going up, up, up and declining dollars simply won't go as far in a hyper inflationary situation.
The VMC Jr's Energy, Metals, and Agriculture Boards are a great place to get ideas for investing. Thanks to all that bring their stocks to our attention and share ideas and opinions.
I have been a VMC'er since day 1 on Raging Bull. I have been a little stressed by some of the bickering on the board of late. None of us are right 100% of the time. We have proven that collectively, we can beat the market averages. I try to post off topic or personal opinions on weekends and/or before/after market hours. I try to post the stock ticker symbol first during market hours or when talking about a stock. I also try to respect other peoples ideas and opinions and not personally attack anyone. My participation in the VMC network has changed my financial situation in ways that are hard for me to comprehend......let's keep these boards going and help each other make money in these challenging times!
Thanks to all of you that contribute to our efforts!
Kipp
