Housing vs. S&P Revisited

Updated through September 2010. The S&P 500 is not shown in this chart like the others:

nahb_0910.gif
 
This one is thru May 22 (so it said in the article).

090209a.gif


This one says it's from July 2009. Looks pretty similar....

090209b.gif
 
tsptalk said:
Although the chart is purely conjecture at this point, it's not even the decline that is so bad. We can always sit on the sidelines and get the buying opportunity of a lifetime when we hit bottom (assuming it continues). But rather it is the duration of the decline. If the comparison does continue, we're looking at 15 to 24 more months before we see the lows in the S&P. :blink:

It's tough to make money when the market drops for 3 or 4 years (unless you are good at market timing). Many of you are in your 50's looking to retire soon (mainly talking to future FERS retirees), and this won't help. Timing may be your only chance.
Click to expand...

Yep, my thoughts exactly, been thinking these thoughts for awhile. Fortunately? for me, I got a late start on real career thanks to getting out of college in 79, just in time for no jobs with any longterm prospects, plus competing with Nam vets to boot back then, entry level jobs. Long and short, I'm early FERS but long til retirement, gotta get my 30 in, thats still 10 years off and I'll likely stay longer for fiscal reasons, my stash won't be big enough yet by 62. I got time to grab the bull when he decides its time to get up and go, whenever that is, but in the meantime, its timing and being extremely selective on outside investments for me, including picking up bargain divvy stocks here and there.

Hey Birch, ever own ATN? Days of future past. I no sooner buy for the juicy divvy than they decide they're no longer paying divvies. I didn't even get one single divvy before they changed their rules. :mad::suspicious:
 
I wonder if there's some indicator out there that will signal a bottom that we don't know of yet. For example, maybe someday when Social Security gets reformed, there's going to be some chart showing the distributions and it's correlation to the stock market.

While this chart is somewhat revealing, keep in mind it only goes back a little less than 15 years. How did it fare in the 70's and early 80's?
 
Bullishreturn said:
oh THANKS-A-LOT for that picture.

Jeeezeee ooohh peetee. UGLY, isn't it?

Now I feel all better.

Well, I guess I end up working until age 74, and then die.
Click to expand...
Although the chart is purely conjecture at this point, it's not even the decline that is so bad. We can always sit on the sidelines and get the buying opportunity of a lifetime when we hit bottom (assuming it continues). But rather it is the duration of the decline. If the comparison does continue, we're looking at 15 to 24 more months before we see the lows in the S&P. :blink:

It's tough to make money when the market drops for 3 or 4 years (unless you are good at market timing). Many of you are in your 50's looking to retire soon (mainly talking to future FERS retirees), and this won't help. Timing may be your only chance.
 
I always though the market was a discounting mechanism. I knew it, those sell side analysts lied to me again!

Conclusion: The Market is not so good after all in regards to predicting turns.
 
Realistically I'm not concerned about the chart. Most of the mortgage defaults and foreclosures are do to the at risk population - they are not stock owners. Investors are now fighting over the purchase of these foreclosed homes and turning them into rentals for now with plans to sell them five years down the road when prices gain. The housing crisis is over. Single family home starts were actually up 2.8% in April I believe.
 
oh THANKS-A-LOT for that picture.


Jeeezeee ooohh peetee. UGLY, isn't it?


Now I feel all better.

Well, I guess I end up working until age 74, and then die.
 
fabijo said:
Here, I put the HMI data alongside the S&P data (lagged one year) into Excel. Here's where we're at:

I'm not sure if the correlation continued.
spx.vs.hmi.2008.09.11.jpg
Click to expand...
fabijo -

The S&P has dropped about 500 points since your update. Do you have the ability to spit out an updated chart - without too much trouble?

Thanks!
 
Great find Mike.

I especially liked the second one.

It is the first appearance of "this is where we are supposed to be, and I told you so four years ago".

Which is another--ever so small- indicator of the bottoming out in my book.
 
If you look at the housing index back to its inception in 1985, the "correlation" between it and the S&P + whatever lag you wish to apply disappears. The S&P climbed for the most part, regardless of what this index did between 1985-1995. Here is the link: http://images.google.com/imgres?img...+index+chart+2008&um=1&hl=en&safe=active&sa=N

Here's some interesting reading: http://www.investorsfriend.com/S and P 500 index valuation.htm - according to that analysis, the S&P 500 fair value could be anywhere from the 700s to where it is now, depending on earnings / PE assumptions.
 
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