Which crash have you seen it before it is coming?

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BogleMelon
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Which crash have you seen it before it is coming?

Post by BogleMelon » Wed Nov 29, 2017 4:18 pm

Another entertainment post here. Is there any wise bogle's who have seen or even felt any of the previous crashes coming? And if so, what makes you feel that "something is not right here", and have you done anything about it?

The reason I am asking this is that I wasn't in US before 2012, and I have very little idea about the "thrills" that come before and during the crash and how hard it could be to be predicted..
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livesoft
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Re: Which crash have you seen it before it is coming?

Post by livesoft » Wed Nov 29, 2017 4:20 pm

Many people have seen 13 of the last 5 crashes before they happened.
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Re: Which crash have you seen it before it is coming?

Post by Vulcan » Wed Nov 29, 2017 4:21 pm

BogleMelon wrote:
Wed Nov 29, 2017 4:18 pm
Another entertainment post here. Is there any wise bogle's who have seen or even felt any of the previous crashes coming? And if so, what makes you feel that "something is not right here", and have you done anything about here?

The reason I am asking this is that I wasn't in US before 2012, and I have very little idea about the "thrills" that come before and during the crash and how hard it could be to be predicted..
I called the great recession September 7, 2007, at the top of the market.
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Re: Which crash have you seen it before it is coming?

Post by MN-Investor » Wed Nov 29, 2017 4:24 pm

livesoft wrote:
Wed Nov 29, 2017 4:20 pm
Many people have seen 13 of the last 5 crashes before they happened.
But they missed those 5.
The key to success - Save early, save often, invest well.

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HomerJ
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Re: Which crash have you seen it before it is coming?

Post by HomerJ » Wed Nov 29, 2017 4:25 pm

I completely saw the 2008 housing crash coming, but had no idea when it would happen or how to profit off my knowledge.

I also felt it wouldn't really affect me, since I already owned a house. Boy was I wrong about that!

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Re: Which crash have you seen it before it is coming?

Post by linenfort » Wed Nov 29, 2017 4:26 pm

My dad sensed the last one...and still lost money.
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BogleMelon
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Re: Which crash have you seen it before it is coming?

Post by BogleMelon » Wed Nov 29, 2017 4:26 pm

HomerJ wrote:
Wed Nov 29, 2017 4:25 pm


I also felt it wouldn't really affect me, since I already owned a house. Boy was I wrong about that!
If you don't mind me asking, why? what happened?
Excuse my English, it is my second language! | | "One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather

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HomerJ
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Re: Which crash have you seen it before it is coming?

Post by HomerJ » Wed Nov 29, 2017 4:32 pm

BogleMelon wrote:
Wed Nov 29, 2017 4:26 pm
HomerJ wrote:
Wed Nov 29, 2017 4:25 pm


I also felt it wouldn't really affect me, since I already owned a house. Boy was I wrong about that!
If you don't mind me asking, why? what happened?
Heh, the U.S. (and most of the world) went into the Great Recession, stock markets crashed 50%, and the entire financial system nearly collapsed.

That's all. :)

All I saw was that housing prices were in a major bubble, with banks making loans to people who could not afford their houses. I knew housing prices would crash, and construction jobs and banks would lose money, but had no idea that the secondary effects would be so large.
Last edited by HomerJ on Wed Nov 29, 2017 4:33 pm, edited 1 time in total.

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BogleMelon
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Re: Which crash have you seen it before it is coming?

Post by BogleMelon » Wed Nov 29, 2017 4:34 pm

HomerJ wrote:
Wed Nov 29, 2017 4:32 pm
BogleMelon wrote:
Wed Nov 29, 2017 4:26 pm
HomerJ wrote:
Wed Nov 29, 2017 4:25 pm


I also felt it wouldn't really affect me, since I already owned a house. Boy was I wrong about that!
If you don't mind me asking, why? what happened?
Heh, the U.S. (and most of the world) went into the Great Recession, stock markets crashed 50%, and the entire financial system nearly collapsed.

That's all. :)

Oh I though you mean "you were wrong and you had to sell your house cheap" or something similar..
HomerJ wrote:
Wed Nov 29, 2017 4:32 pm

All I saw was that housing prices were in a major bubble, with banks making loans to people who could not afford their houses.
That is brilliant!!
Excuse my English, it is my second language! | | "One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather

Bungo
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Re: Which crash have you seen it before it is coming?

Post by Bungo » Wed Nov 29, 2017 4:36 pm

I was virtually certain that housing was going to crash last decade, but I thought it would happen sooner than 2008.

The stock market is always going to crash, eventually, but any prediction I've ever made has been almost uncorrelated with what actually happened and when.

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Re: Which crash have you seen it before it is coming?

Post by Sandtrap » Wed Nov 29, 2017 4:44 pm

I have profited from R/E rebounds. But never foresaw the crash before them.
j :D

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Re: Which crash have you seen it before it is coming?

Post by MrNewEngland » Wed Nov 29, 2017 4:46 pm

I've been calling the next one for years now.

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Re: Which crash have you seen it before it is coming?

Post by acanthurus » Wed Nov 29, 2017 4:49 pm

I told my brother not to buy a house in late 2006 because I though housing was overpriced and he would end up overpaying. His response was not appreciative, so the conversation was memorable. I absolutely did not see the financial crisis that would ensue from the housing bubble. I just saw my coworkers and other people I knew borrowing more money than what they could really afford and what our local housing market was like.

On the flip side I totally got sucked in by the tech bubble. I was a STEM student in college so I knew everything, right? I had a nice 50% gain followed by a 98% loss on what I thought was a company with great tech. Their tech was just OK and the business was actually awful. Their IP was bought out years later after I'd sold.

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Re: Which crash have you seen it before it is coming?

Post by Nate79 » Wed Nov 29, 2017 4:50 pm

Is this the theory or humor section of BH?

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Re: Which crash have you seen it before it is coming?

Post by vitaflo » Wed Nov 29, 2017 4:53 pm

I had a gut feeling a recession might be looming in mid-2007. In fact I turned down a lucrative job at a newly founded company because I wasn't sure they would survive if I ended up being right, so I kept my normal fairly stable job. I ended up being right, but whether that was luck or prescience on my part, we'll never know.

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Re: Which crash have you seen it before it is coming?

Post by Toons » Wed Nov 29, 2017 4:56 pm

Been Investing since 1981.
I knew they would eventually come,,,,,,
But not as to when,
Same applies as I type. :mrgreen:
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Re: Which crash have you seen it before it is coming?

Post by WhiteMaxima » Wed Nov 29, 2017 4:59 pm

Bitcoin crash 1st I am certain.

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Re: Which crash have you seen it before it is coming?

Post by keystone » Wed Nov 29, 2017 5:05 pm

I was confident that there would be a significant correction to tech stocks in the late 90's early 2000's.

I was very confident about a real estate bubble in the early 2000's and knew a crash was inevitable.

I didn't really see the 2008-9 stock crash coming.

As another poster pointed out, a lot of us knew the crashes would come, we just didn't know when.

Bitcoin will most certainly crash but I can't tell you when. :D

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Re: Which crash have you seen it before it is coming?

Post by Earl Lemongrab » Wed Nov 29, 2017 5:08 pm

I began my serious investing late in 2007, so you can pretty well evaluate my prognostication abilities.
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Re: Which crash have you seen it before it is coming?

Post by oldcomputerguy » Wed Nov 29, 2017 5:10 pm

In an episode of "M*A*S*H", Klinger makes a comment that he had an aunt that had a premonition of the Pearl Harbor attack. Thing is, she got it on December 11.

Nobody knows nuthin.
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Re: Which crash have you seen it before it is coming?

Post by Tyler Aspect » Wed Nov 29, 2017 5:13 pm

You might get advance notice by watching for yield curve inversion event. No guarantee that it would work every time though.

The exact moment of the crash is usually a complete surprise. As I recall the CEO of Lehman was playing bridge one day prior to his company collapsing.
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Re: Which crash have you seen it before it is coming?

Post by Fallible » Wed Nov 29, 2017 5:53 pm

I thought something had to give in tech by the late '90s and in housing by '06 (I never thought housing would just keep going up), but had no idea when or that it would lead to the magnitude of crashes and recessions that it did.
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Re: Which crash have you seen it before it is coming?

Post by Valuethinker » Wed Nov 29, 2017 6:32 pm

HomerJ wrote:
Wed Nov 29, 2017 4:32 pm


All I saw was that housing prices were in a major bubble, with banks making loans to people who could not afford their houses. I knew housing prices would crash, and construction jobs and banks would lose money, but had no idea that the secondary effects would be so large.
You and any number of economists. Nouriel Roubini did, but the likes of Paul Krugman did not (as he has admitted).

A lot of us saw that things were going very wrong, and the US housing market was in a bubble-- we read Shiller, after all. But we underestimated the secondary effects.

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Re: Which crash have you seen it before it is coming?

Post by Valuethinker » Wed Nov 29, 2017 6:33 pm

Tyler Aspect wrote:
Wed Nov 29, 2017 5:13 pm
You might get advance notice by watching for yield curve inversion event. No guarantee that it would work every time though.

The exact moment of the crash is usually a complete surprise. As I recall the CEO of Lehman was playing bridge one day prior to his company collapsing.
Actually that was Bear Sterns. He was quite a well known player, and was at a weekend tourney and ordered that he not be disturbed.

Dick Fuld at Lehmans was in the middle of negotiations to sell the bank to Barclays.

Margin Call is a very good fictional treatment of these events (I didn't see the HBO one Too Big to Fail).

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Re: Which crash have you seen it before it is coming?

Post by Portfolio7 » Wed Nov 29, 2017 6:35 pm

Hmm. This may sound self serving, but it is what it is. In any case, I'm not wise, maybe got a bit lucky and borrowed some decent insights.

In Jan of 2000 I was convinced it was a matter of time before the market took a big dive. In particular there were multiple articles discussing the valuation issues with respect to dot.com stocks. It was pretty clearly frothy, but I don't know why I felt ok in 1998/9, and not in 2000. I make financial forecasts for a living, including some commodity prices & some business activity; maybe I'm sensitive to data I don't realize I'm picking up. However, I had no idea really what to do or to what extent. I believe in probabilities, not binary certainties, so I'm not one to just sell all my equities. I just held on tight and kept plowing money into savings. It was very painful to keep contributing and watch it keep falling. I was determined to do something in the next crash. I really started my financial education then, though it was haphazard.

In 2007, (and still haphazard) I was following a lot of former wall street and hedge fund guys on financial blogs. You can find every opinion under the sun there, but there was a common theme across a lot of them - a lot of concern over the size and stability of derivatives (and that derivatives nominal valuation was vastly greater than that of actual honest-to-god real assets.) Housing, no-doc & liar loans, and lack of accountability were also topics I remember, and there were a few folks who noted the culpability of the big banks and financial companies in the unregulated derivatives trade, though I don't recall seeing housing and derivatives connected until after it all began. I was 100% equities at the time. I spent much of the 2H of 2007 trying to build the case for a crash, and also trying to destroy that case. In October 2007 I was convinced that a crash was more than 50% likely, though I had no idea about timing. I never make big moves all at once, but knew I wanted to reduce my risk. In November I sold 10% of my equities and bought bonds/stable value (I don't remember exactly which in what proportion). I did the same in December. I skipped a month here or there, but most months my view seemed confirmed by the price action, and most months I sold equities. By early 2009 I was 100% fixed income. I lost 13% in 2008. It should have been 10%, but I was buried in a crazy project at work, lots of overtime, for Jul and August and skipped the 10% transaction those months. I waited most of 2009 and bought back in at roughly 10% a month in 2010. My account recovered it's total value a little sooner than the S&P500, but I'm not sure I'd have been much worse off with a buy and hold approach, since my participation in the recovery was muted, just as my participation in the crash had been. Still, it was an interesting experience, and luckily not a damaging one.

At no other time have I had any worry about a significant crash. All that said... I don't feel like there is currently anything much to worry about, but who knows? I don't pretend to be any kind of guru, and I don't have faith I'll predict the next one. I mean, despite a 2 for 2 track record, there is no process - none for identification of the crash, for timing it, for knowing when to sell, what to sell, when to buy back in, what to buy... I'm more into ratcheting risk up or down a bit now, which is still a very non-Boglehead approach. I am about 5% equity heavy right now vs my base AA, fwiw.
Last edited by Portfolio7 on Wed Nov 29, 2017 6:39 pm, edited 2 times in total.
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Re: Which crash have you seen it before it is coming?

Post by Valuethinker » Wed Nov 29, 2017 6:37 pm

BogleMelon wrote:
Wed Nov 29, 2017 4:18 pm
Another entertainment post here. Is there any wise bogle's who have seen or even felt any of the previous crashes coming? And if so, what makes you feel that "something is not right here", and have you done anything about it?

The reason I am asking this is that I wasn't in US before 2012, and I have very little idea about the "thrills" that come before and during the crash and how hard it could be to be predicted..
I know that Toronto and Vancouver are going to have housing crashes. And I am almost certain so will Sydney and Melbourne. But.. I have been saying that for several years

Both 2000 and 2007 I knew things were going wrong. However I underestimated how wrong they would go, and the knock-on effects. Particularly 2008 (although 2000 was actually personally more painful, and culminated in 9-11, which had a very strong personal resonance (even though I had not been in NY for a long time)).

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Re: Which crash have you seen it before it is coming?

Post by flyingaway » Wed Nov 29, 2017 6:38 pm

I have seen the next one coming.

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Re: Which crash have you seen it before it is coming?

Post by tesuzuki2002 » Wed Nov 29, 2017 6:39 pm

livesoft wrote:
Wed Nov 29, 2017 4:20 pm
Many people have seen 13 of the last 5 crashes before they happened.
:sharebeer :P :P :P :P

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Re: Which crash have you seen it before it is coming?

Post by Valuethinker » Wed Nov 29, 2017 6:41 pm

Portfolio7 wrote:
Wed Nov 29, 2017 6:35 pm

At no other time have I had any worry about a significant crash. All that said... I don't feel like there is currently anything much to worry about, but who knows? I don't pretend to be any kind of guru, and I don't have faith I'll predict the next one. I mean, despite a 2 for 2 track record, there is no process - none for identification of the crash, for timing it, for knowing when to sell, what to sell, when to buy back in, what to buy... I'm more into ratcheting risk up or down a bit now, which is still a very non-Boglehead approach. I am about 5% equity heavy right now vs my base AA, fwiw.
Some people I really respect are screaming that this is the worst bubble they have seen in 25 years in investing.

That said, it feels more like 1999 than it does 2007 -- overextended valuations in some sectors. I can see lots of local bubbles (Canadian & Australian housing for example) and I can see some big potholes (the possibility of a hard Brexit, for example, although the damage should be limited to the UK). And China rumbles out there -- it looks like they have built up the biggest property-debt asset bubble of all time.

I have bought more bonds. There are age & tax related issues for that, but having never held fixed income, just cash + equities, I now find myself switching into bonds. Market timing. I know. :oops: :oops:

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Re: Which crash have you seen it before it is coming?

Post by randomizer » Wed Nov 29, 2017 6:44 pm

I'm expecting one in mid-2018. I'll let you know how that goes.

Not going to be shorting the market though, nor all cash, just rebalancing to stick to my AA.

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Re: Which crash have you seen it before it is coming?

Post by frugalecon » Wed Nov 29, 2017 6:48 pm

HomerJ wrote:
Wed Nov 29, 2017 4:32 pm
BogleMelon wrote:
Wed Nov 29, 2017 4:26 pm
HomerJ wrote:
Wed Nov 29, 2017 4:25 pm


I also felt it wouldn't really affect me, since I already owned a house. Boy was I wrong about that!
If you don't mind me asking, why? what happened?
Heh, the U.S. (and most of the world) went into the Great Recession, stock markets crashed 50%, and the entire financial system nearly collapsed.

That's all. :)

All I saw was that housing prices were in a major bubble, with banks making loans to people who could not afford their houses. I knew housing prices would crash, and construction jobs and banks would lose money, but had no idea that the secondary effects would be so large.
I had the same thinking, but I didn’t realize the degree to which the entire financial system was contaminated. I had discovered Cakculated Risk, a blog that greatly influenced my thinking. (Sad that Tanta is no longer with us.)

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Re: Which crash have you seen it before it is coming?

Post by whodidntante » Wed Nov 29, 2017 6:48 pm

I seriously believed that single family housing was overleveraged and inflated when I bought my current house in 2005 and I bought less house than I was "supposed to" according to popular opinion as a result. I was way early, but not wrong.

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Re: Which crash have you seen it before it is coming?

Post by ClevrChico » Wed Nov 29, 2017 6:51 pm

I've predicted two failures on our German car to the day. (Dead battery and coolant leak.) I dreamed of one of them, then went to the garage to find a puddle on the floor.

Unfortunately I have no way of monetizing this.

(Off-topic, but you said entertainment. :-) )

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Re: Which crash have you seen it before it is coming?

Post by celia » Wed Nov 29, 2017 6:55 pm

I didn't foresee any of the market crashes in my lifetime.

But then, I didn't foresee any of the California earthquakes (or fires) that caused lots of damage. At least I could buy insurance for the natural disasters.

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Re: Which crash have you seen it before it is coming?

Post by Portfolio7 » Wed Nov 29, 2017 6:56 pm

Valuethinker wrote:
Wed Nov 29, 2017 6:41 pm
Portfolio7 wrote:
Wed Nov 29, 2017 6:35 pm

At no other time have I had any worry about a significant crash. All that said... I don't feel like there is currently anything much to worry about, but who knows? I don't pretend to be any kind of guru, and I don't have faith I'll predict the next one. I mean, despite a 2 for 2 track record, there is no process - none for identification of the crash, for timing it, for knowing when to sell, what to sell, when to buy back in, what to buy... I'm more into ratcheting risk up or down a bit now, which is still a very non-Boglehead approach. I am about 5% equity heavy right now vs my base AA, fwiw.
Some people I really respect are screaming that this is the worst bubble they have seen in 25 years in investing.

That said, it feels more like 1999 than it does 2007 -- overextended valuations in some sectors. I can see lots of local bubbles (Canadian & Australian housing for example) and I can see some big potholes (the possibility of a hard Brexit, for example, although the damage should be limited to the UK). And China rumbles out there -- it looks like they have built up the biggest property-debt asset bubble of all time.

I have bought more bonds. There are age & tax related issues for that, but having never held fixed income, just cash + equities, I now find myself switching into bonds. Market timing. I know. :oops: :oops:
I know what you're talking about, but at the same time earnings are screaming upwards, US GDP has surged back into the 3% growth range, international business (as well as US) appears to be very healthy despite a little shakiness here and there. The 4 main forward looking economic indicators for the US are solid. Technical indicators seem solid, though that's far from conclusive. Recession probabilities appear low, for whatever such methodologies are worth. Plus, there is enough fear out there, we're still climbing the wall of worry. I"m still in equities and stable value - not feeling great about bonds, but I know that's probably just my own stupidity. I think long term rates will stay low, and a lot of bond fear is inappropriate, but still I struggle with it. Fixed Income is something I need to understand better.
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Re: Which crash have you seen it before it is coming?

Post by celia » Wed Nov 29, 2017 6:58 pm

randomizer wrote:
Wed Nov 29, 2017 6:44 pm
I'm expecting one in mid-2018. I'll let you know how that goes.
I'm expecting one last month. How was it?

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Re: Which crash have you seen it before it is coming?

Post by Wakefield1 » Wed Nov 29, 2017 7:00 pm

Didn't Warren Buffet warn of the overvalued market around the market highs of year 2000?
As to the housing bubble I was irritated at the constant efforts to keep inflating house prices and I think I still see some of that activity going on now. (Easy money,low/no down payment.) Although not nearly to as great an extent yet.
I was surprised that the general economy was so damaged by having been corrupted into the housing mess. And surprised that Lehman Brothers wasn't smart enough to have steered clear of getting caught with so much overpriced bad loan/bad stuff on its books.

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Re: Which crash have you seen it before it is coming?

Post by saltycaper » Wed Nov 29, 2017 7:01 pm

I was gliding through the intersection, and all of a sudden, I realized I wasn't going to make it. It was kind of strange, really, that moment before impact. I wasn't fearful. I was angry.
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Re: Which crash have you seen it before it is coming?

Post by DaftInvestor » Wed Nov 29, 2017 7:04 pm

After she got her license I saw my daughter's automobile crash coming before it happened (her driving left some th ing to be desired). What I did about it was ensure I had good insurance.
....you said this was an entertainment post :)

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Re: Which crash have you seen it before it is coming?

Post by jadedfalcons » Wed Nov 29, 2017 7:23 pm

Bitcoin. Hopefully won't bother the rest of us too much.

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Re: Which crash have you seen it before it is coming?

Post by Marylander1 » Wed Nov 29, 2017 7:35 pm

I worked for a dot-com in the late 1990s. Everything was early on the way up and up, and Kozmo.com was eagerly sending out messengers to deliver investor-subsidized stuff within an hour. The day the massage therapist arrived as full-time employee #25 or so, I told my peers "When that person is laid off, we're on the way down."

Knowing that it wouldn't last, I maxed out my 401k.

-Marylander1
Last edited by Marylander1 on Wed Nov 29, 2017 8:45 pm, edited 1 time in total.

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Re: Which crash have you seen it before it is coming?

Post by TeamArgo » Wed Nov 29, 2017 7:47 pm

I foresaw the 2008 housing crash as far before as 1996, and I had the timing about right but I had the reason completely wrong. I made predictions to several co-workers in 1996 to 1998 that housing values would crash in the 2007 to 2008 range, but I said it would be because of "baby-boomers" retiring in greater numbers and wanting to downsize their "McMansions". At least one remembered and remembers my earlier prediction, although he didn't act on it at all.
So, did foreseeing it (sort of) help me out any? No, not really. I held on to the house and let the 2008 event wash over me. Only by luck did I live in an area where the fall was mild, the recovery happened early, and I was able to sell in 2014 at about the peak I might have received in 2007.
But, I now own a condo near the beach in Florida, and I am wondering if it might not be time to sell before the masses begin to anticipate big sea level rises! Oh, God, am I trying to time the market??!? :wink:
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Re: Which crash have you seen it before it is coming?

Post by quantAndHold » Wed Nov 29, 2017 7:49 pm

I saw the housing crash in 2007, when my tennis instructor, a guy who worked part time teaching middle aged ladies to hit forehands, bought a house. If he was buying a house, there was nobody else left to sell to.

I didn’t see a way to profit from it, and I certainly didn’t see the rest of 2008 coming. But I nailed the recovery, and retired early as a result.

metacritic
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Re: Which crash have you seen it before it is coming?

Post by metacritic » Wed Nov 29, 2017 8:04 pm

I predicted the housing crash. I read Calculated Risk and Big Picture regularly for a year leading up to it. Even so I never imagined how far the effects of the crash would be felt and how many sectors it would effect. I made no money from my anticipation (and imagined the crash would come 18-24 months before it did). I lost like everyone on this site.

I did put off a home purchase as a result of my certainty of a housing crash.
HomerJ wrote:
Wed Nov 29, 2017 4:25 pm
I completely saw the 2008 housing crash coming, but had no idea when it would happen or how to profit off my knowledge.

I also felt it wouldn't really affect me, since I already owned a house. Boy was I wrong about that!

technovelist
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Re: Which crash have you seen it before it is coming?

Post by technovelist » Wed Nov 29, 2017 8:31 pm

I saw the NASDAQ crash before it came, and even warned someone who had millions of dollars in one tech stock to sell.

He didn't, and that stock is now worthless.

I saw the housing bubble in the early 2000's, but was wrong about the timing.

I now predict a crash of the Bitcoin bubble sometime in the next couple of years.
In theory, theory and practice are identical. In practice, they often differ.

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JoMoney
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Re: Which crash have you seen it before it is coming?

Post by JoMoney » Wed Nov 29, 2017 8:41 pm

I saw the 2000 stock bubble coming... in 1996
I sold some California real estate in 2003 because prices had gotten 'stupid' high (it went up A LOT more before peeking in 2007).
:?
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

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steve roy
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Re: Which crash have you seen it before it is coming?

Post by steve roy » Wed Nov 29, 2017 8:49 pm

It was August 2007 and I still owned individual stocks ... in this case, Goldman Sachs.

September rolled around and Goldman shares were falling like an anvil pushed out of a C-130. I got rid of all my shares. I presumed the company would soon cease to exist. I would have been right, except that Uncle steped in and saved the large banks' (also GS's) bacon. It was at that point that I gave up buying individual shares of ANYTHING.

I had some idea that disaster was looming. A bit earlier, as the Fed was making reassuring statements, the website "Calculated Risk" kept showing how residential real estate was starting to tank, and that mortgages were imploding. CR turned out to be right, and the guvmint turned out to be wrong.

JBTX
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Re: Which crash have you seen it before it is coming?

Post by JBTX » Wed Nov 29, 2017 9:29 pm

While I may have had a vague notion that valuations were high, and they would likely eventually subside, I didn't "see" either crash coming per se. In 2000 I was more weighted to small cap, international and REITS, so my hit wasn't as bad as the market in general. In 2007, pretty much everything crashed, as did my portfolio. I didn't sell in advance or on the way down. In both cases, on the way back up, I modified my allocations modestly.

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Sandtrap
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Re: Which crash have you seen it before it is coming?

Post by Sandtrap » Wed Nov 29, 2017 9:57 pm

My business has always been in apartment buildings so maybe a bit different perspective than most.
I got lucky with my retirement home.
Figured 2011 as the last of the "low hanging fruit" in R/E. Bought my mini/ranch/mini mcmans. on a bank auction in cash for nearly 1/3 of the value. It had been abandoned for 2 years. The market rebounded shortly after. Also bought several smaller rentals but missed the boat completely on a couple by 2012 when inventory dwindled and prices started egging up. Shucks. Shucks. We always remember the one's that got away. (country music)
For residential income property, it's getting tight.
Now, inventory is shrinking, R/E is overvalued. Good stuff is gone. How long until the next buy opportunities?
Tough call.
Rental buildings last year were running 85-90 per door in prime areas. Now it's up to 110-120 and gaining fast. That drives the CAP margins really thin. The speculators with deep pockets and staying power are still in the game and can run at low margins. Lot's of foreign money, Canadians, etc, driving the prices up still further.
Tough call.
Thinking about VRBO's and such but SFH and small rentals have never been my thing as there's no economy of scale.
Maybe time to go all in on Total Bond and walk away from the R/E casino.
Get a Roadtrek RV and tour the USA, Canada, Alaska.. . . . .
j :D

heyyou
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Re: Which crash have you seen it before it is coming?

Post by heyyou » Wed Nov 29, 2017 10:18 pm

Which crash have you seen it before it is coming?
Not a single one.
Attributed to Carlos Santayana: "Those who have not studied history are doomed to repeat it."
Crashes occur periodically, it is only the timing that is unpredictable. Allocate accordingly.
Wm. Shakespeare, Julius Caesar "The fault, dear Brutus, is not in our stars, but in ourselves,"

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