Thinking about the duration of extended equity valuations, reversion to the mean, etc, I can’t help but come back to certain Canadian RE markets, where prices have been by all rational measures insane since well before the whole tech bubble.
The housing stock mostly sucks, the urban areas mostly suck, the country is a lightweight, the currency is a weak petrodollar, taxes are high, costs are high, revenues relatively low. As an “investment”, such RE is a joke—and yet, it has remained insanely elevated.
For the same money, one can get infinitely better properties in infinitely nicer places around the world. But there is still demand for such RE, due to the appeal of wealth preservation through money laundering, and the secondary speculation that it spawns.
“Overpriced” story stocks could easily stay elevated essentially forever. One problem is that they are liquid—but that is also an opportunity, as price manipulation is therefore easier. Although EMD may outperform AAPL over the “long term” henceforth, I’m not net betting on it, even though I now own some em debt.
I still grumble at how some people can’t understand the utility of symbolic wealth. As btc remains above 40k, unproductive stocks are close to ath’s, RE is at an ath, etc. Yes we will see what happens to the less-liquid RE with the dislocation in rates, but the very liquid equity and btc markets have fared well so far.
Igy, I am curious, given the insights you have revealed on here—are you willing to give us a general breakdown of where you put your money? You seem to fit the profile of a classic gold bug, and yet you never mention it—lol which is apparently always the first clue. Stocks? Bonds? American? Cash? RE? Collectibles? Businesses? Commodity futures? I mean, everything sucks, right?😂