People dislike shorting in part because it has been wildly abused in the past. People would publicly promote a stock while taking a short position contrary to their public pronouncements. Short investing historically was not easy for individuals to access. And large B/Ds vastly abused shorting, though Reg SHO mostly put a stop to that.
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No, divesting is the opposite of investing. Unless Iāve missed your point?
Having knowledge of something is not the same as taking action. Personally I am interested in how cryptography spoofs work but that doesnāt mean I intend to try them myself. I would suggest that you donāt be so quick to jump to conclusions about other peopleās intentions.
Unless one is in fact parenthetically alarmed, as one probably would be in this circumstance.
Appreciate that the freeholder may be making you feel nervous but, for the majority of us who can just about afford to buy but not speculate, all this price rise stuff is irrelevant if you actually intend to live and raise your family in the house. Itās all very well people telling me that my house has āearnedā Ā£50k, but so has every house Iād move to if I sold it.
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My 2p: donāt. Like San Francisco, thereās no reason for the London ābubbleā to burst in our lifetimes. Why? Because itās where everyone wants to be, and it has relatively limited space. Combined with an ever increasing rate of income inequality and you have a situation where the merely wealthy compete with millionaires who then compete with billionaires (US, for now) etc. for the foreseeable future.
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I think you are missing the point: Did they sell it for more money than they bought it for? Adjusted for inflation?
If yes, they didnāt lose money.
That they could have made more money is besides the point. You can lose only money you actually have.
What awexelblat said: If you want to make a quick safe bet against the London housing market, if only for the hell of it, puts on some closely-related financial are the safe way to go.
If you short something, your exposure to a loss is unlimited; say you short sell XYZ at its current price of $100 for one year from now, and then in the next year it goes up 10 times in value to $1000, you are out $900; if instead itās at $50 you make $50. The maximum you could make is $100, maximum loss is theoretically infinite. If you make a put, youāve instead got the option (literally) to sell it for $100 at that date. If itās at $1000, your put is worthless, but youāve only lost what it cost you to buy that option; if instead itās at $50, you make $50 (minus the cost of the option.) The maximum you could make is $100-option price, maximum loss is the option price.
Disclaimer: I am totally ignorant about investments and financial matters. So there.
the best way for cory to short london - write a kickass novel about day-after-tomorrow oppression and salvation under the perpetual bubble
I thought literal wagers on practically everything was one of those quintessentially British things.
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I bet youāre not wrong.
That was an excellent response. Thanks SamSam.
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As a Spanish myself, I know a little bit about bubbles.
My only recommendation:
1-Get the fuck off of London ASAP.
2-Buy a cheap property in the country.
3-See the city burn from afar.
4-Write a book about it.
5-Proffit!!!
If a majority of the leaseholders get together, they can take the right to maintain the property away from the freeholder and manage it themselves instead, stopping the freeholder from either under- or over-maintaining.
Were I going to try to short that market, I would invest in storage units.
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Itās not a construction-driven bubble. Itās all about regular houses in some inner-London buroughs, built between 1800 and 1960, which are being used as a non-liquid bolt-hole by rich foreigners. Itās reached the point where Eric Schmidt, former CEO of Google and armed with a Ā£30M war chest, canāt find a three bedroom family home he can afford in the right part of town.
(Thereās some new construction going on, but itās on existing brown field sites and typically involves massive luxury high-rise apartment blocks, or ā at the low end ā conversion of small business/office units into high density student accommodation.)
This all has me wondering what happened to my grandmotherās house. It was rented to someone, rent controlled since the 50s. But now I have no idea what has become of it since she died 10 years ago. Wouldnāt it be nice if my family didnāt sell it.
YOU DON"T.
My grandfather, a successful investor, taught me The Three Rules of Investing.
Rule 1. Never invest money you canāt afford to lose.
Rule 2. Neve make an investment you donāt understand
Rule 3. If it sounds to be good to be true, it probably is.
Your post puts you in clear violation of Rule 2. Also, transactions involving real property tend to have high overheads, so I find it unlikely that you can make an investment large enough overcome the costs while being small enough to not harm your family if the bet goes against you.
However, you are uniquely positioned to profit from your insights without ever talking to a banker or a broker.
In the 21st century, human capital trumps financial capital. You, Cory, are already a one-percenter from a human- capital standpoint. Therefore you have is unique investment opportunity that is understandable, affordable, and available to only a privileged few:
publish a cracking-good story set in a London property crash.
( I see I am not the first make this suggestion - but hopefully I provided a useful analysis framework).
If you can afford to own property in London then youāre already doing ok. I earn about the UK average but I couldnāt afford to buy a house outside London, let alone inside the M25.
And regarding Brits and betting, I never realised that it wasnāt as widespread in other countries, and I also assumed that gimmicky bets (eg, will so-and-so cry during their oscar acceptance speech), happened everywhere in small amounts.
For example there was a man recently who bet that his grandson would end up playing for the Welsh national football team, when the kids was 18 months old, he did and the grandfather made lots. I assume that with odds of 2500/1 that at least 2501 people have lost similar bets.
Agreed, with a caveat. In London, a lot of those folks are buying expensive London Real Estate as a hedge against their government turning against them.
So of course people who view are treating those properties as shelter are getting priced out of the market.
