Stocks vs real estate


I read this too. NVDA hit double top curve. IMO, analysts are pounding NVDA with lot of negative hypes. I bought NVDA today, both stocks and call options.

Everything changes in just one more month. As long as economy is doing good, company like NVDA grow further. The growth may not be steep like what happened so far, but NVDA will not be volatile like TSLA !


[quote=“Jil, post:81, topic:1355”]…I bought NVDA today, both stocks and call options.

Bought only stocks, no calls, short some May $95 puts. What strike price and expiry date of your long calls?


Bought only stocks, no calls, short some May $95 puts. What strike price and expiry date of your long calls?

Call $120, Oct 2017. I play here risky bet. I have made so far some realized short term gains and bet those money with calls. Even my options become worthless, I pay zero tax and come out zero gain.


We are near the end of Moore’s law. The easy gain from straight scaling is gone. It used to be that programmers can be lazy and wait for CPU upgrades to make their badly written code go fast. Not anymore.

The recent trend to wring performance out of existing technology node is to go custom. Custom make the silicon to fit your workload. Cloud computing like Google and Amazon is at one end of the spectrum. Apple is at the other. But they are both doing the same thing. Custom-fitting silicon to workloads.

Hardware companies selling general purpose silicon like Intel and Nvidia are in trouble. Software is eating hardware.


Many do the same thing, but who is reliable, cheap, have support grabs the orders.

Coming back to real estate: In today’s market, lot of investors are bidding more than primary home buyers. Investors have high cash down, risk taking, and plan to make profit.


Current crop of investors are more like momentum traders than value investors.


Anyone who does any kind of shorting, putting, or calling is momentum trading and not investing. That is no different from going to the casino and playing roulette. I would stay away from that and concentrate on investing.

However, I do understand that some of you have lots of play money and time to spare. To which I say, enjoy! It sure feels dandy sitting in a casino and playing that roulette… :smile:


Most of my portfolio is still the same as 8/9 years ago. I don’t know what to buy so I continue to hold what I have. I made some adjustments on the margin but ~70% of my small portfolio remained unchanged.


You have said this two times (in another post one time). Remember that Buffet putting 18 Bln on AAPL. Is he doing momentum investing? He took so long to invest in AAPL. He said that he lost the time to invest in AMAZON !


Referring to RE investors. 100% certain didn’t say similar for stocks.

It is a response to your comment,

Coming back to real estate, In today’s market, lot of investors are bidding more than primary home buyers. Investors have high cash down, risk taking, and plan to make profit.


I have seen RE investors during 2008-2011 and now, they mostly behave same way, grab the opportunity.

You remember that my ARM locked home, finally decided to sell to avoid keeping ARM risk.

We have 11 offers (listed low) out of which 9 are investors with 40% to 100% cash down level. I Never expected full cash offer, but it came. The last two offers were from primary seekers and they were no way near the high cash offers.

This is nice 10k lot and easy to expand,but I do not have sufficient cash and time to take 12-18 months to build a new home or extension. At this stage, I can not provide any more clue, even the city or location. The buyer has lot of cash on his side to make it work. When he puts on sale, he will get primary home offers. I am pretty sure he will make 250k easily.

I saw similar comments from elt1 recently investors are bidding a lot. True, I realized the same.


What you describe is exactly what I am commenting on. Those who bought during 2008-2011, me included, are value investors… buy when not many believe the bottom is in. Now, these “investors” buy because they don’t believe the top is in… typical of momentum traders’ mentality. Usually value investors like you sell to them, doesn’t matter what reason you rationalize for selling.


Feb 2017 Cash sales, pretty high if compared to monthly average.

Cash buyers accounted for 24.9 percent of February 2017 home sales, up from 21.4 percent in January 2017 and down from
25.1 percent in February 2016. The cash sales share peaked in February 2013 at 32.9 percent, and the monthly average since 1988 is about 15 percent.

According to this report ->


I always wonder how many buy with cash then refinance later to make funds available for future purchases. I don’t think there’s a good way to know how leveraged investors really are. Leverage is really the key to systematic risk. Bubbles always have their roots in easy credit leading to excess speculation.


Normal mortgage loans need lot of paperwork showing assets & liabilities?
So would, I would assume non primary loans & loans from private lenders?


I think freddie/fannie limits you to 10 properties. If they are getting private financing, then it’s all about risk tolerance of the lender. I seriously doubt they’d want to keep their capital tied up unless it’s a flip. It’d make sense to refinance and keep buying. The refinance level depends on everyone’s risk tolerance. I’m sure some would want positive cash flow of x%. Others might tolerate negative cash flow.


Seems that RE top is still a few years away. In the final leg, appreciation rate could be surprisingly high.

I think it is a good time to buy smartly in an appropriate location and at the appropriate price point.

Mortgage lenders are loosening underwriting standard since refinance activity is down a lot. Loosening financing will be the stimulus for the final leg of upward move. There are still many buyers who want to buy but mortgage lenders have been denying them.


I wonder what those people would buy though. Inventory is already super low. It’s not like there are tons of homes that are unsold for months. It would add more bidders to the mix which could push prices even higher. I’m not sure adding 10-20% more bidders would make much difference when there’s already so many bidders. Maybe it’ll help the low end a bit.


I think the last leg is all about entry level homes and move-up homes. High end is topping out.

Millenials will push up entry level. Gen-Xers will buy move up homes from boomers.

Since Millenial population is much larger than Gen-X, entry level will be on fire. Question is how aggressive the millennials will be? Are they going to buy in a frenzy like 2003-2007?


Private lenders, like portfolio lenders, provide loans with high cash down or cash rich people. Still they will have all paper work, documentary proof to ensure that borrower is safe to pay back to them.