There is a saying that keeps getting thrown in our face: "You can't pick the bottom (or the top)"

Well, pardon me, but why the hell not? I wouldn't try to second guess the stock market, which seems irrational to me, but macro trends like housing and business cycles? I believe you can.

Oh, sure, not the exact bottom, but it seems to me that with a little experience and common sense and research, you can indeed come awfully close. At the very least, you can make an educated guess.

The bigger the trend, the easier it is.

I do it all the time in my business. I HAVE to do it all the time in my business. I'm constantly judging sales velocity, trying to decide whether to reinvest or slow down. So don't tell me you can't pick a bottom.

Sure, I've been wrong a million times about particular product; i.e. guessing that Pokemon figure game would be big last fall, for instance. But about the general trajectory of games, or sports cards, or comics or whatever, that isn't really even all that hard.

A few years back, as Marvel was coming out of bankruptcy, their stock was very, very low. If I had had money at the time, I might have bought some. (Though I remember reading an 'expert' who counseled against investing in the same business that you have a retail presence. I understand how it could be a double whammy, but then again what business are you most likely to know the most?)

There was a little movie in the pipeline called Spider-man, and I had seen and heard enough to think it was going to be huge.

Marvel stock since then has gone up, I don't know, 10 times?

My house buying situation was a little different. We had the down payment for a year. We had zero debts. We had the desire. But I wasn't quite ready. We started the Bookmark in Sept. 03, and I thought that was quite enough psychic energy, thank you.

But once Christmas was out of the way, I woke up and said, now.

We were buying our house by March.

If we had waited even two more months, we'd have been priced out. We would still be priced out.

I'd like to say I knew it was coming, but....well, all I knew was that 30 years mortgages were at a historically low interest rate. At the time, I thought it was strange that we qualified for a house that would take 40% of our income. That didn't scare me, since I've been paying out 50% for housing since college. But I was surprised they were so willing.

As it turned out, we were a pretty safe bet. In fact, I've been making double payments almost from the beginning.

Still....the fact that we were in the market, we were willing and able, and there was a house available to us, means we were indeed buying at a 'bottom.'

So people do it all the time, whether they know it or not.

So I watched the houses being built through 2004, 2005, and 2006, and even from the beginning, I thought it was overdone. By 2006 I was looking at blogs that talked about it, and by December of 06', I'd started this blog. It was clear to anyone paying attention that the housing market was in a bubble. With the collapse of the subprime in July, August '07, it became apparent to everyone.

So, my guess about the housing market is that there will be a 'false' spring, with lots of 'positive' news and energy, but by early summer it will become clear that the loans didn't come through, and the houses didn't close, quite as much as we were told.

I think by mid-summer there will be some heavy discounting, and by fall a general malaise. Over the winter a bit of a depression, and by the next spring desperation selling. By next fall and winter, a kind of bottom, where it will stay for a couple of years, before picking up again. So that's about 2 years to the bottom, 2 years scraping along the bottom, and another couple on the way up.

In ten years, everything will be hunky dory.

Anyway, what I'm more concerned with is the commercial bubble. I'm going to pick the top as right about 6 months ago. There are a few dumbasses committing to new building now, but not many. Most of the tenants probably were lined up a year ago. So I'm guessing that we'll see at least another year of buildings coming online. Then....?

I suspect new building will be coming to a stop about a year from now, so that means that commercial trails residential by about 2 years. By the summer after next, the general attitude toward commercial rents will be about where housing is now.

Which means that people who are really paying attention already know, it will become even more apparent over the next year or so.

What I'm coming to is this -- if I had plenty of cash, I'd be looking for a nice commercial property to buy in about 4 to 5 years. So if I win the lottery between now and four years from now, I expect to buy a bunch of buildings.

Like I said, I think in 10 years Bend will be back on the fast track. It is indeed a great place to live, as long as you don't keep building half empty crappy subdivisions.

Of course, the bottom would be constantly moving target....

But for the sake of intellectual mindgames, (I quite like my house), if I was in the market to buy, and I have to pick a moment right now that I have to live with, I'd pick one and a half years down the road, the fall after next, to make a lowball offer on a house. A 3.5 years down the road to make a lowball offer on a commercial building.

Anyone else want to play?