Why do you think that? You're caught up in the media propoganda that the stock market is 'going nowhere'? Seriously, if you have an asset class that is yielding 10% in earnings, and can tack on some growth ontop of that -- won't that eventually provide a better return than some asset class that's already been severely played out?
Well, with lower financing costs, and more slack in the labour market (all those tradespeople not building houses -- so they can be hired cheaply to build oilsands projects) -- why won't earnings skyrocket?I'm not even going to ask you how it's "roughly on track" to earn 1000, and never mind the fact that we still had a contraction(deflation) last quarter. But how did you manage to ADD the 2% inflation onto your return? You know in most valuations, inflation goes on the denominator right?
http://www.investopedia.com/terms/i/inf ... return.asp
Seriously, I look at commodity prices, and I see them basically similar to what they were when the stocks were much higher.
You look at the interval 1989-2000, stocks what, doubled or tripled, while real estate, at best, remained stagnant and actually fell severely? Why couldn't we have a repeat of that?
Commodity prices and commodities are doing just fine. It was people trying to save their skin in the housing (financing) markets that caused them to be sold off. Heck, we're back to $3 copper again, $75/barrel oil yesterday, $950 gold. The markets are neither reflecting these prices, *nor* the reduced costs in operating the companies (financing, labour), nor the reduced discount rate applicable to financial assets generally because of lower interest rates.Oh, the Nortel trap, you mean like the commodity trap last year which is what most of TSX consisted of?
I didn't allege they were fudged; rather, I alleged that those players have every incentive to 'look the other way' on things like the kickback schemes, the free trips, free colour TV's and cars, etc., that are being included with condos, just to keep the prices high. Now, if you have any evidence that CMHC or Statscan have designed their surveys to exclude the impact of such kickbacks, I'd love to hear it.Yes anecdotal opinions from an internet guy is the most reliable information there is. I will go by that and disregard all the other real data since they are all fudged even though a lot of them show negative impacts.
http://www40.statcan.ca/l01/cst01/famil110-eng.htmPost the "rest" of the balance sheet.
Now take a look at the rows entitled "non-financial" assets, and in particular, look at the 'value' of principal residence. It 'rose' by $36,000 (in real terms). The average net worth of Canadians only rose by $28,000 over the same interval.
Since house appreciation is greater than the average net worth of Canadians, we can conclude that Canadians, minus their principal residences, actually were poorer, in real terms, in 2005, than they were in 1999.
Now, I'm no economist, but I can't see how possibly house prices can rise, while overall net worth, excluding housing, can fall. I just don't see it as being sustainable, since its external economic activity that drives housing prices, and not the other way around. I do also see, from that Statscan table, that mortgage debt grew by $15,000 in real terms -- so, practically speaking, that means that Canadians aren't really any wealthier, in real estate terms, but merely, that Canadians, on average, are taking on more debt to purchase real estate, thus running up prices.
Well US housing is down roughly 50%, but the Dow is back at 10k. A lot of capacity in the US banking system has been shaken out, and the very steep yield curve now, in mortgage assets, along with the 0% Fed Funds rate, is allowing capitalized banks to make insane amounts of money right now.I mean, sure go ahead and keep believing that equity will go up if real estate tanks. I mean, real estate is not a huge part of the overall economy at all. When real estate crashed, US equity market skyrocketed afterwards right?
I have done no such thing, so I don't see it really being worth having a discussion with you if you're just going to toss wild accusations out there, or resort to emotion the minute someone challenges you on your hippy-dippy view of real estate valuations.Sorry to resort to sarcasm, but it's really not worth having an intelligent discussion with you. I'm mostly only here to see if anyone has any actual information that I haven't seen before. So far, you've only completely made up yours.