This blog post originally appeared on RealMoney Silver on March 31 at 7:56 a.m. EDT.Despite a not-so-surprising selloff yesterday, the stock market's performance, by nearly any measure, for the month of March was impressive. At the risk of making a market statement based on one day's performance, equities failed to collapse and staged a reasonably good late-day recovery, which has continued into this morning's futures ramp. Anecdotally, the bears came out of hibernation in force throughout Monday on the pages of RealMoney; on CNBC, with the possible exception of Jim "El Capitan" Cramer on " Mad Money"; and in three meetings I had with fund of funds managers in my office yesterday, who, respectively, forecast new lows for the S&P 500 of 500, 550 and 600. The fact is that few, if any, believe a sustainable market rise is on the horizon. Rather, the almost universal view is that the rally from the March low was a classical bear market rally. I respectfully demur and have taken the variant view that the March low was of major significance, likely a generational low. Tactically, I covered my trading shorts from Thursday into yesterday afternoon's downturn.
- 1. the level of interest rates; 2. the employment setting; 3. the economic setting; 4. demographics (population growth and household formations); 5. affordability; and 6. the relationship of the cost of home ownership to renting.
- 1. Median existing and new home prices divided by median incomes are now at 2000 levels. 2. Median home prices to disposable income (admittedly skewed by higher net worth individuals) is now at 40-year lows.
- The cost of home ownership in March 2009 is only 13% higher than the cost of renting a home. This ratio compares to a 73% higher cost of home ownership vs. renting at housing's cyclical peak in 2006.
- If we take out the high ownership cost/rental cost cities of Miami, New York City and Washington, D.C., then the national cost of home ownership is now equivalent to renting.
Know What You Own: The most active stocks in Tuesday's midday trading included Bank of America (BAC), Citigroup (C), S&P 500 Depository Receipts (SPY), Direxion Financial Bulls 3X Shares (FAS), Financial Select Sector SPDR (XLF), General Electric (GE) and Wells Fargo (WFC). For more on the value of knowing what you own, visit TheStreet.com's