Skip to content
 

Panic versus real estate

Panic is the biggest danger in today’s volatile markets. Panic means listening to the drumbeats of gloom and boom. Panic means dumping your stocks at lows and buying them back at highs.

Last week the pundits were gloomy — China, rate increase, emerging countries, etc.

This week they’re all “Happy days are here again.” Oil has hit bottom. We’re not getting a rate increase until my granddaughters enter college, etc.

The pundits reflect, not predict where markets are going. Read that again:

The pundits reflect, not predict where markets are going.

The only certain thing is that volatility is here to stay. Here’s S&P 500 this year. Unlike any other year. As they say in Australia, up and down like a whore’s drawers.

S&PThisyearagain

My piece yesterday on David Einhorn’s 12-year performance has freaked me out. What the heck do I need the stock market’s daily aggravation when my real estate (apartments and syndications) have generally done so much better? And the real estate I own directly — three properties — have tenants who pay rent. Monthly checks are good.

Virtually all (not all) my brilliant shorts are now dead in the water. I predicted they would fall. They did. But then a couple of days of unpredictable bounce wiped out all the profits. I was too late with them. I’ve kept a handful — VLKAY, EWZ, BHP, WMT, XOM and GS. A weak day or two should help. Volatility means “don’t stay long.” Take your gains and run. Hard to play.

Small consolation: Most hedge funds have done no better than I have this year. I suspect most have done worse. My real estate has done really well.

Even owning index funds has been no great shakes. Most of them are under water for the year.

The theme I return again and again to — Owning your own business which you can control is the surest path to The Perfect Investment.

Neat call of the week. From Business Insider:

The most interesting call of the week arguably comes from Deutsche Bank’s David Bianco. Following the disappointing jobs report, Bianco agreed that the Fed would keep interest rates very low for much longer than expected. This is bad news for banks, which he said currently face “spartan interest rate conditions.”

“We see a better chance of landing men on Mars before a full normalization of nominal and real interest rates, especially 10yr yields, to historical norms,” Bianco said. “We doubt 10yr Treasury yields exceed 3% for the rest of this cycle.”

Bianco cut his year-end target on the S&P 500 to 2,050 from 2,100, which was actually a target that was revised down from 2,150 on September 18.

 Favorite new iPhone app:

+ Magnifying Glass with Light Pro — $1.99 and worth every penny to aging eyes. Read menus, food ingredients, etc.

The ocean as you have never seen it. Stunning underwater video. The best I’ve ever seen.

Underwater

Watch it full screen. Click here.

Favorite quote from yesterday’s column.

“The key to becoming a billionaire, which Einhorn allegedly is, is to own the hedge fund, not to participate in it.”

Someone with far too much time on their hands.

AfterTheyveBeenShot

Jeb Bush,commenting on the Oregon shootings:

But I resist the notion, I had this challenge as governor, because, look, stuff happens, there’s always a crisis. And the impulse is always to do something, and it’s not necessarily the right thing to do.”

No junk stuff

DES MOINES (The Borowitz Report)-Hoping to stem the fallout from his comment in the aftermath of the Oregon rampage that “stuff happens,” former Florida governor Jeb Bush said today that as President he would declare an ambitious “war on stuff.”

“Make no mistake: I will not sit idly by when stuff happens if there’s stuff we can do about that stuff,” Bush told supporters in Iowa. “In a Bush Administration there will be a zero-tolerance policy on stuff.”

Pressed for specifics, Bush said that, in addition to preventing stuff from happening, he would also “work tirelessly to stop junk.”

“If I see junk happening that will harm the American people, I will not put up with that junk,” he said, adding for emphasis, “or stuff.”

Citing an example, he said that as President he would demand that Russian President Putin stop “the junk he is doing in Syria.”

“I would be like, `If you think you can do that kind of junk and we’re just going to lay back and not do stuff about it, you are sorely mistaken about that stuff,’ ” he said.

Striking a resolute tone at the conclusion of his speech, Bush told his supporters: “Read my lips: no junk stuff.”

HarryNewton
Harry Newton, who is not changing this investment column into a political one. But Harry admits he can’t resist some of the really dumb things politicians say. Outside my family and my grandchildren, my biggest joy is tennis, followed by great TV. Trevor Noah is becoming a worthy successor to Jon Stewart on The Daily Show. 11pm Monday through Thursday on the Comedy Channel. Funny.

TrevorNoah

 

2 Comments

  1. Fderfler says:

    The only thing better than owning rental property is owning Section 8 rental property (with a good manager). Checks from the government are always on time and don’t bounce. Sure, this violates my fundamental Conservative principles, BUT if someone is going to benefit, then I’ll benefit.

  2. RWReagan says:

    Hey Harry, how’s that Mayor Bill deBlasio doing. I herd he actually showed his face in Manhatten the other day. From what I understand he doesn’t show up for work very often.

    Congratulations on electing an absolute discrase for mayor.

    Deep watching the daily show……