Replies to post #36331 on Value Microcaps Motherboard

[lentinman]

Cliff: RE:

Maybe you didn't read this before (see analogy below). Maybe you don't understand it. Of course, maybe you don't agree with it, but this statement in your article is 100% irrelevant. Yet, it is THE statement that the article is predicated upon.

"Even with higher mortgage rates and a lull in economic growth, existing single-family homes in Florida had a median sales price of $246,300 for fourth-quarter 2005, an increase of 29 percent over the year-ago period, according to the Florida Association of Realtors."

If you read on down in the same article you will see that even using the misleading measurement of quarter over SAME quarter in previous year, the number of sales was DOWN. Think about it. The number of sales will be the FIRST thing to drop. The price won't come until AFTER that. That's just common sense. People hold out because they don't believe they have to drop their prices. Eventually, they figure it out and then it is a race to the door.

Here is my example from before. I guess I will just have to keep posting this until everyone understands that you CANNOT compare year over year totals to determine WHEN a peak has happened. If you do, you will be getting out WAYYYYYY after the smart money!

Let's call this example Widget Sales. It begins on December of 2004 and ends on December of 2005. Shown are the monthly changes.

12-04 100   
  1-05 110 +10  
  2-05 120 +10  
  3-05 130 +10  
  4-05 140 +10  
  5-05 150 +10  
  6-05 160 +10  
  7-05 170 +10  
  8-05 180 +10 Balloon pops  
  9-05 170 -10 
 10-05 155 -15 
 11-05 135 -20 
 12-05 110 -25

Now, some person with a stake in widgets, or some idiot reporter that doesn't have the faintest idea about numbers, posts the following headline (Based on December of 2006 being 110 versus December of 2005 being 100.)

"WIDGET SALES RISE FOR 5TH YEAR IN A ROW! Widgets gained a healthy 10% in December of 2005 versus December of 2004."

And, other stories follow: "Widget sales still going up!" "Widgets still flying out the door!" "Widget increases of 10% are better than average!"

Signed,

Speechless in KC... Len