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Don't look at this chart David, everyone else might find it interesting2/8
On the horizon:
So what would be the best stocks to buy to take advantage of what we know is coming? Housing commodities, Pultie homes, Owens Corning?
Yes, and consult your financial advisor.
You should invest in the Wall Street Ral Investment Trusts that are buying up single family residences for the rental market.
Pat is right about these kids coming of age and wanting to live in houses with back yards for their kids to play in. The problem is they won't be able to afford it. Like a starfish slithering across the mudflats these REITS will latch onto every clam, suck the life out of it then move to the next clam.
The pile of money this group has to invest just doubles every two years. It has to find a home because nobody wants to just stuff it in their mattress. Fannie Mae started last month to provide insurance warranting rental income property. It used to be you could only get this for owner occupied real estate. The thinking was this would help minimize risk for people who put up the cash to underwrite these mortgages. Since there is no down side risk anymore to investing in rental property ALL property will eventually become rental property.
Another possible investment might be in electrical contracting companies. Somebody is going to have to maintain those double rows of electric fence surrounding these new homes. We also need to keep the server farms up and running to archive all these selfies.
I want to retract my advise, I'm not saying anything about investing.
There are an infinite amount of moving parts in the stock market.
I only brought this up for loosely projecting sales
Pat, the one stable I had in my life just went wishewashy. What do you mean man! I look to you for guidance in an uncertain world.
Sarcasm duly noted.
The economy is going to boom.
Read up on investing I recommend a random walk down wall street.
Pro tip don't look for stock advice on a woodworking site.
Pat - I just woke up. Your chart just put me right to sleep. I think while I was asleep I might have changed made a bunch of investments, based on data from your charts and investment advice.
But seriously, my position is often that these macro concepts are interesting if you like that sort of thing. But when it comes down to a small shop (less that 50), an owner or manager's time is far better spent in sales calls, walking the floor looking for waste of any kind, formulating close strategy for the next 6 months to a year, meeting new vendors, etc, etc.
In my 2 man shop, in my life, any spare time I have is certainly not spent looking at economic forecasts. Far better to go clean the shop, trash that plywood corner, change knives and wax the benches and machines. If I want to befuddle myself, I read up on the latest developments coming from Cern and the related physics news.
To each his own, I have 2 siblings with degrees in physics now that is a snore fest...
It is useful to me as you don't see things coming with too narrow of a focus. Not having a macro perspective has certainly hit me in the face. Not academic at all.
But a lot of what I look at is absolutely on a micro level, to think they are not 2 sides of the same coin is specious.
OTOH there is so much false information out there it gives the subject a bad name.
After the election results I figured over the next few years there would be some money to be made either shorting the market or investing or buying real estate.
My house was paid off so I took a 70% cash out refi and put the money in a variety of bond funds with my advisor who is also the guy the does the company 401k.
If nothing happens I will either use the interest to pay the loan or do some work around the house and then pay it down or hang on to it for tough times.
I just wanted to be in a position to take advantage of a growth market or take advantage of opportunities. In 2006 I had a home equity line of credit and as going to use it in 2008 or 2009 and they cut it off unless I wanted to get a new appraisal. This time I decided I would control the cash.
I have no idea what's going to happen but I feel like we will see a market that we haven't seen in 20-30 years and if an opportunity that makes sense is there I want to take advantage of it.
FWIW I'm not saying anything about the stock market.
This information is pertinent to future economic activity. It is based on the demographic increase in the population of the 25-35 year olds as this is when most people buy their 1st house.
IMO the stock market may be up because of an increase in the money supply which also has also shown up in some housing markets.
Who is president has little to do with the economy. Unless the president makes investors nervous.
One area that will grow long term is home building because of the demographics. And because home sales are as low as they were in the early 60s
Your statistics are accurate insofar as they reflect trends in age demographics. It is a big leap, however, to equate this increase in population group with an increase in home ownership. Just because these Millennials are of an age where historically they want to settle down and buy houses does not mean they will necessarily have the money to do so.
There will indeed be a lot more investment in housing but this will be housing that is specifically built for the rental market and owned by Real Estate Investment Groups (i.e., pension funds etc).
You need to read the Wall Street Journal more often. They write a lot about who specifically is investing in what.
As I mentioned before, Fannie Mae is now insuring mortgages for rental property. There is no risk for this type of investment anymore.
Come on, i'm talking about some things that are as old as time.
No matter what the WSJ says it is not going to subvert this
We have gone through a huge swing of the pendulum fueled by a credit bubble. Then the pendulum swung back for almost 10 years. It left a mark, more on some of us than others but the reality is that it is/going to be picking up.
The reason most of us did as well as we did was because of the baby boom. The next boom is going to take the population from 325 million to 425 million, you do the math.
For sure this boom will be different than past booms as all economic recoveries recover in different ways. Maybe manufactured homes will finally be the best way to do it, maybe the cabinets will be part of the home factory. Robotics will figure into it strongly. We have comparative low inflation now compared to the 70s it figures to hold that way if you look at the trend, that means that the prices will stay relatively low. Largely because of the lower cost of oil.For now there is a shortage of labor which means that wages are going to be going up. Which will increase the demand to automate.
This one shows that the interest rate trend is has been going down for a long time
This one indicates Tim's mentor, WSJ, be wrong.
Source of 1st chart easier to read
Source of 1st chart