In mid 2000 when it was obvious that dotcoms were entering a secular bear market the likes of which had not been seen in a generation, I drew up a list of the few dotcoms I thought would be "blue chip" survivors. My plan was to wait for the ultimate lows after the tech crash, and pick up these companies for peanuts when they were down 90%+ from their highs. My list included Amazon, Yahoo, Ebay etc. Most of the companies on the list indeed became genuinely cheap in the late 2001-2002 period, although one or two (e.g. Ebay) held up much more than I expected. Unfortunately I slacked off on the investment of my work, since my daytrading was making far more money for very low risk due to the insane volatility of that period. Although I did buy some of those stocks, I never put down the serious size bets that could have netted a fortune over the next 3-4 years, and I ended up selling way too soon. The idea was spot on but the implementation and follow-through was lacking. Fast forward to late 2006, and premium US real estate (e.g. prime California, Miami beachfront etc) is currently experiencing the early stages of a once in a generation secular bear market. It is my conviction that prime properties that were at the forefront of the real estate bull market, will fall 50% and possibly 75-80% in the most extreme cases. The quesiton then is how best to profit from this? Let's look ahead, say 3 years out. Imagine the bear view is proven correct - real estate is in the doldrums after the worst bear market since the early 90s or even the Great Depression. Prime lots lie empty for 6-12 months or even more. Bids of 20-30% below asking prices are standard practise. More marginal lots don't even get a single enquiry all year. Foreclosures are rampant. In that environment, what should one do? Wouldn't this be a once in a lifetime opportunity to acquire prime real estate at incredible bargain prices? Where, and what, would you be looking to buy, if you had sufficient spare cash lying around? As for the stockmarket sectors affected - homebuilders are already way way off their highs. However, the same was true of tech stocks at the end of 2000. Techs fell massively, 80-99% depending on the stock, yet they also had several periods of 30%+ rallies during the 3 year bear market. I would imagine homebuilders could follow a similar pattern. The market is pricing in a major housing slowdown. It is not pricing in an out and out collapse. So, if people feel the worries are overblown, and we get a decent homebuilder rally, that could offer an ideal opportunity to short and/or buy long-dated puts to play for a further collapse. The key thing to remember is that all lengthy bear markets have sucker rallies - one must anticipate this and use it to put on new short-side exposure, rather than get blindsided, or even worse, assume it heralds the end of the bear. Any thoughts?