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Current owner of boutique RIA firm. 17 years in the wirehouse world as advisor and regional managment. I run the firm consciously avoiding the pitfalls of the wirehouse culture. Founding principle is derived from an Albert Einstein quote - "Any intelligent fool can make things bigger and... More
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  • Homebuilders still stink - so what? (So do Realtors...)
    Please explain to me why the homebuilders order book getting schmeissed, as Doug Kass would say, is bad for the housing market? Seriously, it might be bad for employment if the construction industry flounders, but how can it be bad for real estate.

    Our problem continuously seems to be supply - foreclosures, short sales, "shadow inventory" along with everyone who puts their home on the market in the spring. Why would slowing the creation of new supply hurt that market? Lets stop building and clean out soem of the inventory pipeline, no?

    All I see in our area and those that I visit traveling is that the builders have lowered quality dramatically, crammed everything more closely together and continued to do crazy financing deals to get people into the new product. The larger, national builders have seemingly swung in the direction of car dealers where they say, "Maybe we can barely break even on the sale of the product, but now we'll make money on the financing." Not sure that's a good idea...

    Also, with all of the terrible real estate stories we hear, why has nobody said a word about the realtors? How on earth do they continue to make 6% commission when they add no value? They had a good gig in the past where advertising your property correctly could move it more quickly and perhaps improve your price. Now, all they do is fall all over themselves to talk about the soft market and that things only sell if they are "priced correctly." (i.e. underpriced) IF you can't make any more money on the property based on their efforts, why do they scalp 6%? How many of you out there would continue to pay your advisor, broker, research associate, et al if all they did was lose you money with basically no minor indication (even from them) of an improved performance in the future? The realtors now risk turing the home market into the car market - why would I buy if all it does is lose value?

    AARP should take Congressional lobbying notes from the NAR...
    Apr 05 1:25 PM | Link | Comment!
  • Baby Boomers - the Scourge of our Markets
    Am I alone in believing that the Baby Boomers have been the best and worst things to happen to our investment landscape over the past few decades?

    I'm a big believer in demographics and psychology driving the markets, especially in the short term and it seems as though even thought the Boomers are not the wealthiest generation (their parents retain that title so far) - they certainly have the most influence on fund flows and market psychology.

    Having been in the retail advisory business (as a personal advisory as well as a manager of quite a large organization) for almost 20 years, the one thing I have noticed is that we have never had many Boomer clients. They have just never been savers. To go farther than that, they are tremendous consumers far in excess of their earnings and that is the biggest part of the housing bust that nobody seems to mention. They drove the demand for crazy loans on homes they didn't need - it was all about want & greed, as if their "me decade" of the 80's had returned. Now we are all paying the price for this excess as well as their malaise after having wiped out the fantasy fortune they felt had been amassed.

    I'd love to hear thoughts on this now that I've stirred the pot a bit - I'll try to write more as the discussion develops.
    Apr 04 1:05 PM | Link | Comment!
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