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This Is the Moment I Live For as an InvestorBy
Tuesday, February 21, 2012
I love it.
This is the moment I live for as an investor.
It hardly ever happens. But it is EXACTLY what I want to see as an investor... And it is happening right this second.
The moment I live for as an investor – the time when I can get the greatest deals – has two simple characteristics...
1. Nearly everyone in recent memory has lost a lot of money on this investment and has sworn it off. Meanwhile...
2. ALL of the latest data about that investment is 100% in favor of that asset going up. This rarely happens. People rarely get so severely burned that they'd completely give up on ever investing in that asset again, regardless of how attractive things are.
Less than two weeks ago, in DailyWealth, I wrote about this incredible idea. And as I'll show today, in the last two weeks, all the important data completely confirmed what I wrote.
The time is here.
My headline back then was "The Greatest Opportunity Ever Is Just About to Pass You By." I said, "You are foolish if you don't do everything you can to take advantage of this... We may never see opportunity this great in our lifetimes."
Meanwhile, I STILL don't know anyone who has actually taken my advice here...
Many people rationally agree with what I've written. But they haven't stepped into the batter's box and taken a swing yet. I don't know why.
I made my case as emphatically as possible... I said, "I'm more convinced of what I'm saying here than I have been about any other investment in my two decades of studying investments."
What more can I say to express how I feel?
I'm talking about housing.
Everything is conspiring to send prices higher... right now. The opportunity for gains is there. I wrote, "You can buy a home and make a 175% tax-free gain by simply assuming things return to 'normal.'"
The basic story is that housing is an incredible value right this moment: With mortgage rates at record lows TODAY (at 3.87%) and with a record "bust" in home prices, housing is more affordable than ever. PLUS, we're at the "puke" point – where banks are giving up properties at any price, just to get rid of 'em. PLUS, the government is getting in on the act, trying to help.
It's only been 11 days since I wrote that DailyWealth... Today, the facts are confirming my strong belief... my belief that, not only has the bottom passed, but the best deals are passing you by at this very second.
Here are some brand-new facts. This is what a bottom looks like:
All the facts are from a Bloomberg story that ran on Sunday. It basically said banks are helping, the government is helping, and the economy is improving.
It is crazy, because the brutal reality is, the real estate market doesn't actually need the help... The extraordinary mortgage rates and the incredible affordability will straighten out housing all by themselves. Really. Smart investors are taking advantage and scooping up the bargains.
This is the moment I live for as an investor... The vast majority of the actual facts are going my way. Meanwhile people are frozen, afraid to act.
This is it.
Once again, get out there if you can swing it. Find yourself something. I'm nearly certain you'll be glad you did...
Good investing,
Steve
Further Reading:
Steve's not the only one who sees value here. On Saturday, we featured an essay from Capital & Crisis editor Chris Mayer, who calls housing "the best value play in America." One of his contacts in the industry is buying cheap houses in nice neighborhoods, paying about $250 a month for the mortgage... and renting them out for $1,000 a month. Get the details here.
Palm Beach Letter editor Mark Ford is doing similar deals, with a twist: The government is guaranteeing he'll get paid. Learn more here.
Market NotesTHE BIG ASIA TREND IS STILL IN PLAY Today's chart is an update on one of the biggest investment ideas in the world... one we've written about for years... and labeled, "Asia up, the West, not so much."
The trend is the gradual increase of Asian economic power... and the gradual decrease of old European economic power. Many European countries have declining population growth and onerous business regulations. This creates a headwind against the region's stock and real estate prices. Many Asian countries have healthy population growth and are embracing free markets. This creates a tailwind behind the region's stock and real estate prices.
One of our favorite ways to monitor this idea is to compare the returns made in the big Singapore stock fund (EWS) versus the returns made in the big Italian stock fund (EWI). Singapore is a global financial hub and is considered one of the world's easiest places to do business. It also sports a low corporate tax rate. Italy is deep in debt and tough to do business in.
As you can see from today's chart, the big "Asia up, the West not so much" idea is still in play. Over the last six years, EWS (black line) and EWI (blue line) have plotted very different courses. Singapore is up more than 90%. Italy is down 40%. In other words, free markets work.
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