If you pay 6% in commission fees in a buyer's market, you're stupid. If you pay more than 2% you're stupid. Do you buy a new car for the sticker price too?
Just thought I'd mention that there is a tendency on the part of human beings to ALWAYS fight the last war. The last war? Bubble. This word "bubble" is a word that was not heard of or used for most of my own investment career until the peak. Now we hear the word nearly every day describing every bull market, or any move up that anyone thinks has gone too far. Either way, the homebuilders have been downplayed by Wall Street types for years. So hear they are, hitting new all time highs every day, still carrying PE ratios of 10-15, and yet described as a "bubble" in a thread titled "housing crash". I heard this same question asked several years back about Toll Brothers (TOL)....at 30. Tonight we closed at 74. Housing crash? Certainly there is no discounting of this idea on the part of housing stocks. In fact, they appear to be discounting ever higher earnings to come. Interest rates....everyone predicts higher rates...yet we seem to be moving down. Looks to me like there are a whole lot of folks in this thread arguing with the tape. With age you learn not to do that,it can be costly. OldTrader
And many/most were making your argument during 1998-2000, and guess what? They were all correct too, for a time. Bubbles need a catalyst to pop, and until we get one yes, you will continue to be right. Here's a thought: has Texas prairie land really gone up 200% in value over the past two years? (Somehow I find that hard to believe.) http://finance.yahoo.com/q/bc?s=TPL&t=my
I call this a bubble and we will see if i am right. i called the nasdaq 5000 a bubble and many people like yourself said i was wrong. by calling this a bubble i am not fighting the tape, i choose to play different sectors. i laugh at most real estate professionals since they rarely know about any other markets except their own and most have only experienced a long bull market. they have no idea what is happening to our monetary system...our deficits, the size of US debt that asia controls, real inflation that the media is covering up, massive mortgage fraud..... blah blah blah. early on i asked you a few questions that you couldn't answer so i will post a link for you to read up a spell. wink wink with age you learn not to think to highly of your own opinion. http://www.financialsense.com/fsu/editorials/willie/2005/0112.html
yeah, u among few people on ET I consider having brain. Too many people look at what happen know and extrapolate (new word for me) far into future. That short sighted and immature. Mr. Zen
The oil under that Texas prairie land has just about doubled in value in the last two years. TPL derives about half its cash flow from oil royalties. Other Texas oil and gas royalty trusts have appreciated 100% or so in the last two years. So that's a partial answer to your question. Martin
Must have touched a nerve eh? Now understand that I am not saying that either you or the prior poster are not the smartest guys ever...in fact, you've illustrated it in that you both evidently called the peak in the stock market back in 2000, and presumably profited handsomely. But it's a damn good thing that neither of you were so dumb as to get short the homebuilders around the time that the "real estate is dying" thread began....because had you done so you might have short Toll Bros. around 40...now around 74. That might have cost you just a little of that fortune you made getting short in 2000. My guess is that a "real estate professional" does not pay a great deal of attention to "our deficits, the size of US debt that asia controls, real inflation that the media is covering up, massive mortgage fraud..... blah blah blah. " because of the simple fact that employment trends are much more important in the pricing of real estate. And my guess is that if pressed you would be unable to show any type of study that illustrates how "deficits" have caused real estate values to decline. Either way, what is important for you and the other posters to this thread to know is that residential real estate does not trade like a stock. People live in houses, and they have to live somewhere. This is not to say that prices cannot decline...but it should be obvious that if you want to sell your stock that is completely different than selling your house. Until you understand that difference you're going to keep trying to compare houses to the NASDAQ index. And most real estate professionals do not make that mistake. Finally, if you will look over the posts in question, you asked me a question regarding mortgage insurance companies....a subject that I brought up, and that most here knew next to nothing about. The question was technical, and therefore I did not know the answer...nor did you, or evidently anyone else posting here. In terms of FNMA you asked for my take, and I gave it. I also said I was no expert on FNMA, which certainly makes me no different than any other poster here, including you or the guy who wrote your article. The point is that the question you asked me that I could not answer had nothing to do with your link. OldTrader
Texas Pacific Land Trust has the following profile from the link you provided: "Texas Pacific Land Trust (the Trust) is primarily engaged on managing land in Texas conveyed to the Trust. The Trust holds title to tracts of land in Texas, previously the property of the Texas and Pacific Railway Company. Managing the land includes sales and leases of such land and the retention of oil and gas royalties. The Trust's income is derived primarily from land sales, oil and gas royalties, grazing leases, and interest on investments. In the fiscal year ended December 31, 2004, land sales accounted for 16% of the Company's consolidated revenue while oil and gas royalties accounted for 54%." Lots of possible reasons why the price of this stock has gone up, to include oil and gas royalties as the prior poster pointed out to you. Royalties were 54% if revenue, and obviously that portion of their revenue has risen sharply. The point is that at least one major factor this stock is up has very little to do with "real estate". Lets just hope you're studing real estate with more detail that this attempt to debunk real estate with a company benefiting from oil and gas royalties. OldTrader