Did you predict the real estate and debt bubble crashes ?

Question

How so ?

Answer 1

I saw the writing on the wall and sold my condo at the top.

How did I do it?

17 year cycle.

1988 was the last cycle top that lasted 5 years into 1993.

I also saw some really silly things like people paying 1,000's of dollars OVER the asking price, people standing in line to buy track homes they never intended to live in, and the Front page of Time Magazine on June 12, 2005 was the last shred of evidence I needed to see.

Magazines are ALWAYS last to the party.

Watch for signs of a bottom in 2010.

What are the signs???

Banks starting to lend, times on days shrinking, homes sold going up, new housing starts BELOW 700,000 units.

The final sign is Time, Newsweek, or The Economist magazine COVER having a guy crying about the housing mess.

Answer 2

Some did, some didn't...& any that did, did so through pure dumb luck (and good for them!), if that weren't the case, the stock market would not work! Think about it, if there were ever actually a way to be sure which horse was going to win a race, the gambling industry would cease to exist.

Sensible portfolio management elinates the need to know, however, since if you allocate your assets in a way suitable for your age and goals, the ups & downs of ANY market are less than relevant, you'll still get to where you were planning to go...

Answer 3

I did. I dont believe it was luck, or a magical numbered year cycle.

I just looked around me.  In general, the American mass is stupid. And, I decided to move in the opposite direction.  When most of my friends and coworkers were stretching to buy houses, I saw rents going down. So, I stayed a renter.  When, most wanted Ford Explorers and Chevy Tahoes, in 2005 I went with a used Ford Focus.

It was all supply and demand.  Most people told me to get into real estate before it was too late back in 2004 and 2005. But, I saw that demand had outstripped supply in the short run, and in the mid-term 2007-2009 there was going to be too much supply as the market readjusted.

So, to recap. Yes, I predicted it.

- I got an apartment within 5 miles of both my jobs (for conveince and due to the fact that in 2005 I had no where close to the 10-20% down payment on a hous).

- I purchased a smaller car in 2005.

- I paid off all of my credit card debt between summer 2006 and 2007. I am now credit card debt free and working on finishing my car off buy this labor day.

- Instead of trapping my money into a house, I have instead maxed out my contributions into a retirment account. Yes I have lost some money in the last 6 months. But, it is for 30 years from now.  It is not something I am banking on selling or worried about getting upside down on. In fact, if the stock and bond market stays down for the next 2-5 years before recovering, long term I will come out way ahead.  While others are letting their houses go for a loss.

Answer 4

Real Estate may crash but Debt NEVER crashes.  If debt is not paid off it just increases.

Answer 5

I disagree that those who predicted the above did so through pot luck. I am sure those amoung us with the right vision predicted both. Personally although I did not "Predict" as such I made sure that I was not in the market during these periods. One californian Hedge Fund Manager turned $4billion into $18billion in 6months by selling both of the above in derivatives.