20-20 Investing

NOW They Tell Us

Getting caught up on the various financial publications I try to at least skim regularly (The Wall Street Journal, Barron's, Investor's Business Daily, etc.), I've been struck by how many money managers claim they were nervous about the market this Spring, and re-positioned their funds to raise cash (and sell equities).

With the broad averages down 15% since then, they (and their investors) are sitting pretty.

Funny, I don't remember any of these sages saying that back then.

If anything, the consensus on the same financial pages two months ago was that the recovery was gaining traction -- which meant that earnings were sure to go up, and therefore stocks were cheap.

I remember reading once that the definition of a politician is someone who looks for a parade and then runs to the front of it.

A good number of money managers subscribe to the equivalent: name the latest trend, and announce that they anticipated it.

P.S.: So did they? It can be very hard to tell.

For one thing, money managers can be bullish one day and do an about-face the next (can you say "Barton Biggs?").

For another, many funds engage in what's called quarter-end window dressing: whichever stocks or market sectors have been the most successful the preceding quarter, is what they buy for their fund . . . the last day (or hour) of the quarter!

Appraisal Air Pocket

Housing Market Circular Reasoning

The reason more upper bracket homes aren't selling . . . is because more upper bracket homes aren't selling.

Huh?

Once a deal is struck, the lender's appraiser seeks to substantiate the value of the collateral -- the home being sold -- by looking to other, similar homes that have sold recently.

The preferred number is three, within the last six months (more recently, if possible).

But what if there aren't three good comp's?

Increasingly, lenders in CYA mode appear to be filling that vacuum with the most conservative assumptions possible -- scuttling more than a few local deals.

The result is . . . . even fewer upper bracket deals.

That's certainly not the whole story with respect to upper bracket housing -- the tiny little recession we're experiencing, elevated unemployment, a weak stock market, etc. are all contributing factors, too.

However, "appraisal issues" are increasingly exacerbating the problem.

"Not a Kayak-By"

Do You Canoe?

"Not a drive-by" is one of the most over-used cliches in real estate.

So how about "not a kayak-by" instead?

On a kayak is how I encountered 2550 Burnham Blvd. yesterday, on the north side of the channel between Cedar Lake and Lake of the Isles in Minneapolis.

Hey, Barry! You're welcome for the plug.

P.S.: Minneapolis real estate trivia: what do Barry Berg and I have in common?

Not brokers (we work literally across the street from each other, at Coldwell Banker Burnet and Edina Realty, respectively).

Not alma mater (Harvard and Stanford, respectively).

Not credentials (he's an MBA; I'm a (former) Attorney/CPA).

Give up?

We both ran -- unsuccessfully -- for the same seat in the state legislature (59B as I recall, representing Kenwood and Bryn Mawr).

He ran about a decade before I did, and lost to the same opponent, Dee Long.

"S 53X119X86X129" vs. "553x119x86x129"

Listing Info Typo's

Notice the difference between the two strings of numbers above? (both are lot measurements for a home just listed on MLS).

You would if you saw "553 x 119 x 86 x 129" on MLS, and then looked at the line immediately above it, which says that the home is on a .20 acre lot.

Unh-unh.

There's no way you get a .20 acre lot when one of the lot sides is 553 feet (200' x 200' is slightly less than a full acre).

The .20 acre seemed WAY off, so I jumped to the tax records, where I saw the second string of numbers ("S 53 X 119 X 86 X 129").

Bingo!

The "S" at the beginning got misread as a "5."