Trading stocks vs. Trading real estate

Discussion in 'Economics' started by eagle488, Oct 2, 2006.

  1. The difference between trading stocks and trading houses is obvious. However, stock traders and real estate traders go through similiar pains.

    We have all been through the following scenario and kicked ourself in the ass everytime its happened. A stock that we have longed suddenly gaps up for minutes and sometimes hours presenting a unique exit point. We watch it happen. Soon, we are sitting on a nice profit. Instead of taking the money and running, we sit to watch it some more hoping and waiting. Then there is the gap down as profit taking takes place. Then it gaps down past your original entry point and suddenly that profit turns into a loss. You wait, hoping. However, it never turns back up again. Sooner or later you are forced to sell at a loss.

    The above process sometimes takes minutes, hours or even days to occur.

    Now real estate home buyers are going through the same process but in extreme slow motion. Its fun to sit back and watch this happen. Real estate is now on the gap down and many folks are simply watching as their profit evaporates. Eventually the gap might go past the original entry point.

    Fortunately for us stock traders, our loss is realized quickly and we can move on from there trying to makeup our profit.

    Unfortunately for real estate traders, their process takes several years and someone is going to end up selling for a huge loss after waiting all those years.

    Its unfortunate that these hard lessons have to be repeated again and again. You almost wish there was a class in high school that addresses these painful issues or maybe a college course. However, there is no courses and no one ever tells you these things when you start your way down the path of speculation.

    I tip my hat off to those who have made money in real estate, but there is a world of pain that is about to be realized soon...