Stocks vs real estate

If we get tax reform, then I’m super bullish. We’ve cut tax rates 4 times since WW2. GDP growth averaged over 4% the 3 years following the cuts. Consumer sentiment actually worries me. We’re the highest since 2000. I’d prefer to see a lower number, because it gets to these levels at the top.

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Post-dotcom bust, founders are more shrewd, they grow their business privately for a fair long time to maximize worth of their holdings before IPO. So, growth rates post-IPO tends to be slower.

Beginning of the end. The end phase is super lucrative. However, it would end with a stump, not a whimper, so have to be very alert if you’re trading or don’t intend to hold longer than 3-5 years… but where to put your money after liquidating your stock and RE?

In that case, we should sell RE and buy TSLA. Alternatively, should not be putting more than 15% as downpayment for RE.

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How about selling all of AAPL and buy TSLA?

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Just be patient and wait. That’s good thing about being an individual. I don’t have to be invested. Usually start dollar cost averaging in once below the 200-day. Picking the exact bottom is near impossible. Starting to average in there should be good enough.

I am bullish too and I think your prediction is reasonable. However, I will not put all my money (actually, I put none but IRA) into stock because the possibility that anything go wrong is still very high. If correction does happen, stock will be hit first and I have no time to respond as a small player without looking at the screen full time. However, if I were get layoff, tenants were having hard time to pay rent and investors were fleeing from Bay Area, I would still have plenty of time to respond on my RE. That is why I like RE a lot more (plus I can margin by mortgage).

For super high growth public stock, I am still bullish on NVDA. It seems expensive now but AI and self driving cars are going to be everywhere (just look at Tencent’s moves recently). A blog from Andrew Ng is also a good read. Everything will be running on GPU and NVDA is still the monopoly…

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I am bullish on NVDA too.

I am bullish on smaller companies like this IRBT, UBNT, CGNX, AEIS, I see them grow 20% per year next 3 years.

Bigger companies QCOM, OHI, BA, CSCO, AAPL, GILD are dividend players and grow at least 10% per year for next 3 years.

https://seekingalpha.com/article/4061424-dividend-investing-vs-real-estate-investing

Why not invest in both. No need to choose!

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Yes, this is better, I mix both.

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The beauty of investing in dividends versus real estate, is that dividend stocks pay you to own them, not the other way around.

Huh? WTF is he talking about?

Wow… can someone please pay me some money so that I can own them? :slight_smile:

Cash flow positive. It falls back to the value of a series of cash flows or the value of the underlying asset.

Real estate also pays. I’d argue the payment stream is more stable than stock dividend.

I calculated with 4-to-1 leverage, compound annual return of Bay Area real estate is about the same as holding S&P with no leverage. Volatility is much, much lower in real estate though. Also I just assumed rent covers PITI with nothing left. In reality, mortgage and tax payments are mostly flat over the years but rent increases at significantly faster rate than inflation, at least in Bay Area.

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I should have known this was a rhetorical question!

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Yes, the cash flow positive amount, from the rent, is equal to dividend. In fact, Cap rate is the correct ROI equal of Dividend.

Any home appreciation equal to stock growth. The benefit or risk of real estate comes from leveraging 4x at low interest rate.

Lost in translation. :slight_smile:

Didn’t read the article, feel the statement makes perfect sense.

This is worrisome for NVDA. If more major players design their own chips for AI, then they’ll have less of a market.

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