Has anyone deliberatekt & succesfully timed the market?

Question

There are at any given time several posts about how people are “waiting for the correction or crash” to invest in RE.

Are there any BP investors who have deliberately (in a planned manner) timed a market knowing a correction or crash was coming?

I have been investing for > 20 years primarily in SF Bay Area and NYC. I have a business background, a top school MBA and worked for several years on Wall Street, but I’ll confess I cannot predict a crash or a boom!

100% of my investments happened because I liked the property, saw value, had a good team, found comfort about the sellers and as it turns out I also had a good enough balance sheet to make the purchase. Yet I recall not selling properties during 2008 - 2011, purely because I liked them and saw them valuable even as the overall market was taking a beating. The properties I purchased during the time was also a about value vs analytics about timing about a crash.

So my question to gurus who have deliberately timed economic cycles, can you share the leading economic indicators/ trends that guided you & and how is that experience guiding you now.

Amit M. · Answer

@Justin Thorpe as to replies to your original question...crickets...crickets!

Personally I think trying to time the RE market is a foolhardy endeavor, especially for private investors like most people on BP. If you already own property now, to sell it at the high, wait, and buy again at the low is almost impossible. Think of it, you’re going to pay 5-7% sales/transfer taxes, plus capital gains up front. The dip you’re speculating on better be significant, and you need to time it right. Not likely.

As for RE funds and sponsors, that’s perhaps a different story. They basically raise funds, so they can build a war chest in anticipation of trying to buy at, or close, to market lows. But those sponsors are also the same ones that raised money in the last 2-3 years and also brought property then. Especially if it’s commercial, I bet a lot of those sponsors are going to have a difficult time delivering the profit spread they were predicting 2-3 years ago. Their job is basic to raise money and invest it, at whatever cycle the market happens to be in.

Darius Ogloza · Answer

No crystal ball here but in over 25+ years investing in both stocks and real estate I still marvel a how many people panic at the bottom of the cycle and end up buying high and selling low. A think a failure to maintain liquidity is a lot of it. There is I believe a valid "weak" form of market timing that exists based on the simple understanding that cycles exist and having perseverance and patience will lead to good deals down the road. I bought my primary residence in March 2009 - what was later disclosed to be the bottom of the last financial crisis. More luck than skill was involved. Still, I have to say that my gut was telling me that the beating had to stop soon.

Has anyone deliberatekt & succesfully timed the market?

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