The Case-Shiller index of 10 major metropolitan areas and the 20-city index both lost 1.3% in November from the previous month. And Phoenix was the only one of the 20 cities to show a gain in November from October. Atlanta, Las Vegas, Seattle, and Tampa all hit new lows on the index.
Year over year, the 10- and 20-city indexes dropped 3.6% and 3.7%, respectively. Atlanta was the worst one-year performer, with an 11.8% drop in prices.
A Wall Street Journal article on the drop in home prices quoted economists with the Nomura Economic Research firm commenting on the numbers...
| Tighter lending standards and widespread expectations of further declines in home values have been depressing home sales on a larger scale… In addition, a growing share of distressed assets in home sales that are typically sold at a 20% discount are putting downward pressure on house prices. |
The two cities that did gain year over year? Detroit (where at one time you could buy a skyscraper for less than $4 million) and our nation's capital, Washington D.C.
The data above are from last November, the most recent data available. But Steve Sjuggerud says housing has bottomed. He's finding incredible values on the ground in Florida. And, while we may still see home prices slide, you can be sure you're getting a great value today...
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Right now, houses in America are the best value they've been in many generations. It's not hard to understand... |
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The Economist showed a chart of home prices relative to incomes in that article. Instead of showing that home prices are expensive, the chart shows that U.S. houses are the best deal in history (going back four decades), relative to U.S. incomes... |
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To attempt to explain this, The Economist says, "Prices [in America] may have reached a floor, but this is no guarantee of an imminent bounce." Yes, that's correct. We can't know the future. We can't know if another 5% dip is in the cards. But c'mon... We CAN know that extraordinary value exists right now in U.S. housing. You have the chance to buy fantastic properties at possibly once-in-a-lifetime prices. – Steve Sjuggerud, December 12, 2011 DailyWealth |
In Monday's Digest, I introduced our newest trading service, DailyWealth Trader. We're preparing a "sneak peek" for our Alliance members. But right now, it's only available internally.
We've been testing it with our analysts, including Porter, Steve, Jeff Clark, and Dr. David "Doc" Eifrig. And so far, the results have been outstanding...
Since August, we've averaged a 9% return on our trades. That might not sound like much, but the average length of our trades is just 50 days... less than eight weeks. Annualized, that's roughly 65%.
We're also turning profits on more than seven of every 10 trades we make – an excellent "win percentage" for a trading advisory.
Part of the reason we've been able to achieve such excellent returns is a "secret" Doc's readers know well. All through the fall, as the market was completing its near-20% drop and undergoing extreme volatility, we were turning up fantastic income trades on the world's best companies. These included Anheuser-Busch InBev, Intel, Wal-Mart, Cisco, McDonald's, and Microsoft.
Through November, we found 21 of these trades. Twenty were winners. And our average return was 15% in 10 weeks, or roughly 77% annualized. That can't compare with the A++ performance Doc achieved for his Retirement Trader subscribers. But it shows you the power of this strategy, especially during times of market panic.
These days, investors are more sanguine about stocks. The Volatility Index (VIX) – often called the "fear index" – has dropped from its high of 48 down below 19.
As Doc has proven during his two-year tenure with Retirement Trader, you can continue to make excellent, super-safe returns "trading for income" even when the market enters a relatively calm period. (To hear more from Doc, we invite you to tune into the most recent installment of Stansberry Radio... on which Doc was a guest. To listen, click here.)
But for DailyWealth Trader, we're more excited about what may be a new uptrend in resource stocks... Steve Sjuggerud clued in his True Wealth readers to this early on. He just about "called the bottom" in giant copper producer Freeport-McMoRan. His readers are up 34% since October.
You'll find several other major resource stocks sporting similar charts. And as Matt Badiali, editor of the S&A Resource Report, pointed out in today's Growth Stock Wire, the trend might be turning around in small miners as well.
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New 52-week highs (as of 1/31/12): Invesco High Yield Income Fund (MSY) and Westport Innovations (WPRT).
We received lots of feedback about the best businesses in the world... Most were businesses like Apple, Intel, Wal-Mart, and McDonald's. But we have to concede, the business of levying taxes is hard to beat... Send your feedback to feedback@stansberryresearch.com
"The best business by far is the Government Business." – Anonymous
"As an SA Alliance member, do I need to do anything to get the Direct Line alerts?" – Paid-up subscriber Frank Auer
Goldsmith comment: Jeff Clark's Direct Line blog is an invaluable service to his S&A Short Report readers. Every day, Jeff logs on to the Direct Line to give his thoughts on the market, in real time. Sometimes he shares trading ideas. Other times, he forecasts the direction of the market, so more experienced traders can formulate their own trades.
Accessing the Direct Line is simple if you subscribe or are an Alliance member... Once you log in to the Stansberry & Associates website, click the "S&A Short Report" link on the left side of the page. You will see "Direct Line" listed in the drop down menu. If you don't currently have access to Jeff's S&A Short Report, you can click here to find out more about his service.
Regards,
Sean Goldsmith
New York, New York
February 1, 2012
Housing still falling, except in D.C... Junior miners ready to rally... California out of cash... The best business in the world...