CB67

Oh I agree on the US jobs front. But just maybe, not least due to a very strong financial position that most US corporates are now in, the US employment data starts to get much better over the next 18 months (doesn't seem like it, I admit, from recent data points). Could this be the big surprise over the next year or so, with concomitant benefits for relative US interest rate expectations, and the US dollar? My point on the at least 9/10 months of excess "shadow" housing inventory is that, once it is worked off, prices could bounce back quite quickly (in certain locations, as you suggest). Great pity there is not a similar system for working off excess inventory in the housing market as there was in the auto sector with "cash for clunkers" scheme

I agree: flexibility and adaptability are keys in investment, as well as life: "Is is not the strongest of the species that survives, not the most intelligent, but the one most responsive to change" - Charles Darwin

Interesting. This might sounds like a stupid questions, but in terms of how these indices are collated, how much of the house price data is represented by foreclosed properties versus non foreclosed properties, and how has this changed over time in the series? My understanding that most of the US housing price data is currently dominated by foreclosure sales (i.e. at very depressed prices) which, over time, one would expect to be cleared out. On a more positive note, at least net household formation in the US is still growing due to immigration etc. Appartently, the divorce rate is now bouncing back as the economy improves and people can "afford" to get divorced. Also, as the labour market continues its slow, if erratic, improvement, more younger folk will leave home ...

Oh I very much agree with you on US property, not just for valuation grounds, but if the US economy/job market starts to surprise on the upside in Q3/Q4 11 and the "shadow inventory" of foreclosures starts to ameliorate. Here's an interesting switch my now ex neighbours did last month: Sell an apartment in Kensington, London at $2,500 per sq ft and buy a house in Scotsdale Arizona (one of the worst markets, but an upmarket address within this) for $250 per sq ft. Of course, the big issue in the US is land supply constraint (i.e in most markets there wasn't/isn't any). For this reason I looked at some apartments in Rio recently (best areas - Leblon and Ipanema, massive land supply constraint in this booming City) and liked what I saw. Apparently German residential property is interesting on a valuation and momentum basis.

Hello. I'm a newbie who came to this site indirectly through reading this book. I'm about 80% of the way through this, and have found it an informative read. I would make the following comments: (i) What is interesting from the book, is that there appears to be lots of different ways for investors to make money in markets (and keep it). What appears to unite successful investors is having a self-discovered philosophy and process; sticking to it; knowing the strengths and weaknesses of their approach; and evolving the strategy over time. (ii) I am struck by the number of investors who "maxed" out in the tech bubble (97-00) creating a solid base of wealth to work from subsequently. Obviously the key was to keep these gains. Whether this was skill or luck is a matter of conjecture. I did the same by being a forced seller of tech shares in Jan - March 2000 to fund an apartment in Central London - which, of course, with leverage, subsquently turned out to be a judicious 10 year switch. The reality was that it was luck. I wonder if the defining issue in the years to come, will be the guys who keep hold of likely substantial gains made in the commodity complex over the last 10 years? (I think returns in this over-invested area will be much less satisfactory in the next few years). (iii) The parallel debate on what is a "safe" base investment is interesting. I use the dollar, or dollar proxies, as this. Whilst this has not been too disadvantageous for a sterling based investor over the last 3 years - given £ weakness - obviously in retrospect, the Swiss Franc was perhaps a more "obvious" play. I am structurally positive on the US dollar; not just for its "least ugly" characteristics in the "Keynes Beauty Parade". If I were based in H Kong, as Dr Bubb appears to be, I would heavily invested in Renminbi - as I believe this is now possible for all HK residents? CB