"Breakeven Crash Requirement"

cells

TheeMaskedTurnip wrote: »

An interesting thread would be one with a poll asking the crashaholics what their BCR percent is.

especially on the other crash wisher site

if they sat down and thought about it they would either have to come to the conclusion there were terribly wrong or that their 80% crash is not going to happen short of the black plague returning

mwpt

cells wrote: »

especially on the other crash wisher site

if they sat down and thought about it they would either have to come to the conclusion there were terribly wrong or that their 80% crash is not going to happen short of the black plague returning

I still read HPC. I'm interested in both sides of the coin and there is some valid debate there. Your point reminded me of a post I saw over there. Please hold caller...

Ok, back. Here, a poster debates the finer points of a decision being wrong vs the position being wrong:
http://www.housepricecrash.co.uk/forum/index.php?/topic/207774-buy-to-let-investors-to-challenge-tax-hike-in-court-merged-threads/?p=1102855045

I can see his point actually. But one thing it misses, for me personally, is that the end result counts for a lot. He seems to be dismissing the end result as not being a way to decide but for me, it's the only way to decide. I just want to end up with a house and would rather not be further priced out. Of course, I'd rather that prices corrected downward, for my own and others benefit but what I want doesn't come in to it.

I had views on the housing market, other people have views on the housing market but these views can never actually predict things. It is part of a wider UK economy and part of a wider global economy. We had and have no idea what bombshells are lurking around the corner that may bring prices down or drive them up.

But where I agree with his point is that I believe the position of most of the "crashists" (your word) would have been more correct, except for the unpredictable behaviour of the BoE and government. I could not foresee emergency low interest rates, QE, FLS, etc. These things are unprecedented so anyone claiming they could see them, I think is a liar.

I have no idea what is coming up in short or long term but my estimates are that probabilities favour buying. I'll see in the future whether this estimate was correct or not.

westernpromise

cells wrote: »

especially on the other crash wisher site

if they sat down and thought about it they would either have to come to the conclusion there were terribly wrong or that their 80% crash is not going to happen short of the black plague returning

I've had to make this call a number of times. In each case I looked at recent gains (or indeed the rate of losses) and wondered whether I should sell and buy back in lower and later. Each time, I concluded that the costs of exit and re-entry were so high that only perfect timing made it worth doing. And since perfect timing was impossible to ensure, I sat tight.

It's an example of the way the costs tend to support price to the benefit of incumbents. If you're long property you need a 9% crash to sell it and buy back just to offset the transaction costs. To make money out of doing this, you'd need a lot more than a 9% crash. This never seems likely - and if it ever did, probably you'd be unable to sell - so you and everybody else does nothing. This chokes off supply of property for sale, which stops prices from falling and in a looping way makes nothing the right thing to have done all along.

The lesson I draw from this is: if you have incumbency, don't give it up lightly. Or as the Chinese would say, never sell. Ever.