What's going into escrow - Irvine and maybe some Tustin too

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IR, we share a similar view about gold prices. The dollar index hasn't hit the lows seen last November despite 150 basis points of Fed funds rate cuts. Gold will always be the most sensitive indicator of inflation or deflation, and I fear that all the toxic paper being vaporized may be overwhelming the Fed's ability to print new money.





I am seriously considering doing something with gold futures on the downside.
 
<p>As the old saying goes, "Short term, in the market, there are those who don't know, and there are those who don't know that they don't know". </p>

<p>Any event and it's "immediate" reaction anticipated by you and I, is mostly discounted by the market already, by the time we form our expectation. The short term micro trends zigzag, and appear completely random. They are unpredictable without illegal inside information. It's a losing proposition for an average investor to try and read the market's short term moves. </p>

<p>Longer term, macro trends are much more difficult to change once in place. Any investor with the "not so common" common sense could add value by riding these long term market trends. Take what the market gives. The hard part is making <strong>unbiased </strong>long term calls. </p>

<p>Hind sight being 20/20, we can clearly see that the 6-month long, 20+% deep correction in gold from May of '06 to Jan of '07 was nothing more than a correction in a bull market. Why would anyone try to interpret a move as small as a few percent, and a few day long is beyond me.</p>
 
<p>For dcades gold has not had any real use/demand. European governments were systematically selling gold in open market. Major gold producers/miners did it in the forward market and created a enormous hedge book. These trends lasted a long time, but their time had come and gone. The trends are reversed now. The supply is not what it used to be.</p>

<p>All the years gold was touted as useless, why hasn't the bigger holder of gold on earth, the US government sold one ounce of gold?</p>

<p>Other than the consumers in India, there was no major buy and hold demand. Now we have a few central banks (Russian, Brazilian, etc.) that are actively buying and holding gold as a reserve. The consumer demand in China is emerging as a new force to be reckoned with, after being prohibited to own gold for decades. </p>

<p>The demand is growing. On top of this, major world conflict (the Iraqi war is not one) and financial crisis are wild cards for gold demand. They may or may not surface, but the possibility is there.</p>

<p>Just a few observations on some of the entrenched long term trends. Like anybody without a crystal ball, I could be totally wrong.</p>
 
<p>Boy, all the condescending buy-and-holders have really come out of the woodwork tonight. You guys can pontificate all you want about never trading (as opposed to investing) and hope your investments grow with inflation plus a little spiff, but I for one will continue to try and make money on the up AND on the way down... You can profit on trends. You can profit on news. You can profit on uncertainty. You can profit on the emotion of the market... </p>

<p>I went almost all cash, bonds, and gold back in the late summer, mostly just to play what I thought was going to be a short-term trend with the credit markets seizing up. That seems to have worked out remarkably well, at least until the last few weeks, when the market has traded up in spite of the Fed, Congress, the President, and every presidential candidate finally talking about how fearful they are that the economy is going into the crapper. Has your portfolio been doing as well awgee? Rhetorical question, no need to answer.</p>

<p>What amazes me is those of you that want to deify yourselves for being buy-and-holders or taking the less risky, more traveled, uber long view with regards to investing. You don't hear those of us that trade regularly pompously denigrating your investment strategy choices... Once upon a time, trading, not investing, funded the down payment for my house, paid for my wedding, paid off my credit cards, paid off my car, my wife's car, her student loans, allowed my wife not to work when we had our first child, etc. I think I'll keep sticking to what works for me... Thanks for the sage advice though. </p>
 
In any panic people will sell the moneymakers. Gold has been a big money maker. In times of genuine financial crises, banks and brokerages, and funds MUST sell assets like gold, treasuries, etc to raise capital. I rarely agree with George Soros, but I think he is spot on in his predication of rates. With every rate cut the FED gets more and more powerless. At some point, long treasury yields will begin to skyrocket.
 
<p>IPO, Not trying to be condescending in by previous posts. Just sharing my views. Trading has been my trade for 16 years. </p>

<p>I was told from day one "Kiddo, there are two types of traders on the street, there are bold traders, then there are old traders, but there is no bold and old trader". Bold traders don't last on the street. Although I am not old yet, but I have not been bold for a long while. </p>

<p>Short term trading is fine, but to take small, regular trading moves and make them into the basis of something fundamental is not! Disastrous results could come. Making relatively large bet is fine, but leaving no room for mistake is not! Many talented traders could have a good run, and make an out-sized profit. At the end of the day, it almost always boils down to taking on more risk and being on the right side of the market, plain and simple. </p>

<p>Now comes the condescending part from my confrontational evil twin:</p>

<p>A) I think we are about the same age. Those glorious trading profit windfall you recited, the dollar value is worth no more than one year (maybe two) of interest income from A+ rated papers for me today. </p>

<p>B) A really talented trader with an education and motivation like you shouldn't be stuck at a relatively low paying accounting job at a small company. Relative to a real trader on the street that is. </p>
 
ipo,





You might want to try the search button. Several of us "uberbears" have made plenty of money on the up or down of the market. These "wild inferences" you are making, make <em>you</em> sound hypocritical, pompous, and rather ignorant. In fact, it will be great to use those proceeds on a few foreclosures, as the market gets worse, but not yet. If I were you, I wouldn't worry about our portfolios, especially awgee's. We all got into gold a long time ago. We have also made some great short term trades, gotta love that SEC investigation announcement for New Century, that makes the put options soar. Don't get me wrong, I have made some mistakes, and I don't hide it. But, like awgee, I am smart enough to know how to cover most, if any losses. Of course, you would know this if you used the search button.





Oh, and 2 closed sales, but 10 homes, with a $750k+ loan, in Irvine went back to the bank in the same time frame. Mmmm... looks like the inventory is increasing faster than the sales. Geez.... I sure hope no one wants to put their home on the market this spring, because it will suck to compete with the banks. There are 10 scheduled, so far for this month in that range, and this is just the Santa Ana court house. I wonder, will there be more closed sales, or more REOs, in that range, this month?
 
<p>"We have also made some great short term trades, gotta love that SEC investigation announcement for New Century, that makes the put options soar".</p>

<p>Oh Graph, you're going to be sorry you admitted that. awgee says trying to make money off short-term one-off events is ludicrous. He was at a loss that I would try to do such a thing. Has he lectured you similarly already? I suspect not. I presume such scoldings are reserved those not part of the OBN.</p>

<p>I hope you're right about inventory exploding this spring. That would be nice for me. More house for less money is good.</p>

<p>All you kept asking was "did any of those close yet" like it was a practical impossibility that they would and when you get the answer they did, you just shrug it off like it was nothing. Sounds like you are interpreting data to suit your own preconceived notions. To me, it's all just data. Just because I watch escrows like you watch foreclosures doesn't mean we don't think the outcome will be the same... Hopefully if and when inventory in Irvine does go through the roof, there won't be the sales to support it.</p>

<p>Any bold predictions as to where you see this going by the summer?</p>

<p><a href="http://www.ipoplaya.com/inventory.htm">http://www.ipoplaya.com/inventory.htm</a></p>

<p>What do you forecast?</p>
 
<p>I didn't quote you anywhere awgee. If I did, you would have seen something like this "insert awgee's post here". </p>

<p>I was simply summarizing my interpretation of your posts. </p>

<p>Did you notice gold was down again today? GLD has declined by almost 5% over the past 3.5 trading days. While you may scoff at the notion, I think a 5% decline is a material trend. There appears to be a short-term support level around $870-880/ounce and if it breaks below there, gold could easily drop another 10%... </p>

<p>Personally, I've been unwinding some positions on the metal this morning. Yeah I know, maybe short-sighted, reactionary, etc. but I'd rather go with the apparent trend and lock some nice gains. IR and Winex's posts made good sense to me and seem to jibe with recent trading action. </p>
 
<p>Hey CK, you out there man? Looks like one of the San Simeon units you like on Arcata just got into escrow:</p>

<p><a href="http://www.ipoplaya.com">www.ipoplaya.com</a></p>

<p>Arcata was last sold 5/2004 for $755K so it's definitely at least a 2004 rollback. Maybe a 2003...</p>
 
<em></em> there's nothing wrong with short-term trading. if that is your investment strategy, so be it. the key is to understand what exactly you're basing your decisions on. as xtreeter said, taking small movements in the mkt on any given day, or over a few days, and interpreting that as a trend is simply dangerous.





as for a 5% decline being material, that's subjective but i would note that volatility in the mkt is significantly higher than what it was even just a yr or two ago. volatility of GLD using a 3-mo rolling avg of annualized monthly st dev is about 20% recently. when the etf started in 2005 it had volatility in the 12% range. so even in gold etfs volatility has increased dramatically. today the s&p is down 3.2%, gld is down 1.6%. i don't think anyone would be surprised if either was down just as much tomorrow... or if they both have gains higher than their losses today.
 
I just want to go on record so I am not misinterpreted. I did not say one could not short term trade. I trade myself. What I said was I did not trade, speculate, or invest based on every little short term indicator out there. Maybe someone else can, but I doubt it.<p>




<i>"How about the S&P? Looks like it's up 5-6% since mid January. Partial to tech stocks? The Nasdaq is up 7% over that same time... Like I said, markets trading gently upward of late."</i><p>




Yesterday and today the S&P was down 59 points or 4%. Is this part of the trading gently upward? Or the Naz, down 104 points or 4%. More trading gently upward?<p>




I have no idea if gold is in a downward trend. 5% down in 2 or 3 days is not enough to me to call a trend enough to place a trade. But what do I know? According your previous post, <i>"Has your portfolio been doing as well awgee? Rhetorical question, no need to answer."</i> But, if anyone were to ask, I would say, the long term trend is up and the fundamentals behind the rise in the gold price have only gotten stronger. Buy on the dips.
 
<p>thanks, ipo -- I'm actually more interested in 22 Mineral King. The Beazer Evergreen tract is very nice, for paired units. I think 22 Mineral King has gone into and out of escrow a couple of times...So that must mean the other knife catchers think it is priced right, but just can't seal the deal with a loan approval. Right now I think the list price is still about $75-$100k too high for what would get me excited --- but I will be interested to see how far the sales prices falls, if it closes.</p>

<p>I think 74 Arcata is way overpriced at $719k. Way overpriced.</p>
 
From looking at the table on ipoplaya.com the new price for homes in much of irvine is sort of like $300.00 per square foot. I seem to remember that home is this area of Irvine were in the $450 PSF range a few years ago. This seems like a nice start to the correction in home prices......33%. By the end of summer I figure we should be down in the $225 PSF range.





Whats sort of funny about this is all off the stupid people listing at 2005 prices. How can they be that stupid...even if they go an offer, they banks wouldn't lend because of comps.
 
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