Will Wall Street traders invade the Greenwich real estate market?

I was told, second hand, of a fascinating conversation a friend of mine had with a (very, very) successful Wall Streeter. The Wall Street fellow said that equities are cooked, and so he and his cohort are turning to real estate again as a play. Hmm.

I’m a dummy in this field, but it seems to me that the days of investing in stocks are over, at least for now. When my father worked Wall Street, from 1929 on, the idea was that you looked at a company’s fundamentals: its products, earnings, management and prospects, and you bought or didn’t, depending on your analysis.  In 1980, at age 75,  my father gave up, admitting that he no longer understood his business. And I think that’s because the traders had taken over – they weren’t investing, they were trading. As one of my trading friends told me back then, a “long” position was something he bought in the morning and still owned after lunch. How do you do quality analysis against that? My dad didn’t live long enough to see the Dot.com bubble, but he would have been appalled and, knowing him, amused.

The only thing that makes me hopeful that an onslaught of traders won’t swamp our real estate market is that real estate is so illiquid – you can’t trade the stuff (so far) in a millisecond. There’s room for investors, maybe, especially in this down market, but certainly not traders. Which is good for people like me who claim to be able to advise on good buys and warn against the bad. I still prefer to work with young couples who are looking to find a good house in a good neighborhood in which to raise a family, but if investors are coming in, I can deal with that and still make a living.

Or I hope so. If not, you’ll find me in a cardboard box on Greenwich Avenue next year.

3 Comments

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3 responses to “Will Wall Street traders invade the Greenwich real estate market?

  1. Anonymous

    Doubtful

    Sept08 intensified fixation amongst smart survivors on liquidity/counterparty risk of any investment or trade

    Equities traders are different animals than fixed income, macro or quants: often very different intellects and emotions (or lack thereof) amongst those called “traders”, many of whom can be equally wealthy yet awfully divergent

  2. If you’re going to live in a cardboard box on the avenue you’d better have plenty of donuts for the cops.

  3. cos cobber

    ultimately real estate is driving by rising incomes and finite capacity. as more people adopt/accept apartment living the finite issue is partially mitigated. as for incomes, they are rising? where?