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Minyan Mailbag: Real Estate Perspective


Sorry, it says "the Moops," bubble boy


Note: Our goal in Minyanville is to remove intimidation from the financial markets and encourage an interactive dialogue among the Minyanship. We share this next column with that very intent.

Re: Robert Shiller Op-Ed piece in WSJ

Just for perspective....he predicted the equity bubble in '96 and '98 before
his clock was right in Feb '03.

Meaning no disrespect as I don't know the man...and I also think coastal real estate is overpriced.

Minyan David

Thanks Minyan David. Nothing wrong with a little perspective... on our time. Of course, Mr. Shiller is an economist, not a market timer, and although his bearish views are widely known by most people by now, the view from beyond the housing market's white picket fences runs both ways.

Still your point is well taken, and another way to put it might be this: Can there be a real estate bubble when Mr. Shiller, the WSJ, the L.A. Times, Washington Post, New York Times, Boston Globe, and (insert your local newspaper here) are all writing about one?

Legg Mason strategist Paul MacRae Montgomery, the tester and originator of the magazine cover indicator, has shown that once a magazine cover such as Time or Newsweek features a definitive statement on a financial trend, bullish or bearish, the buyers, or sellers as the case may be, are baked almost fully into the pie.

Newspapers are a trickier read, however. Their task as I see it, one that has been compressed and has suffered the effects of information deflation as the Internet and blog medium has grown, is to tag along with the immediacy of the day's popular distractions.

Mr. Shiller may or may not have any insight that allows him to predict a housing bubble. I don't know. But I do know that outside the 'Ville here, I'm not particularly comfortable (and definitely not popular) when I express my honest views on real estate.

In other words, while many in the financial community seem to be worried and talking about a potential housing bubble, the actual buyers and sellers of real estate, by their actions, are demonstrably not.

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