FM123

Large caps in general look cheap relative to mid and small cap and pharma and financials have been left behind therefore in equity world, those look OK although not mega cheap on an absolute basis. Unfortunately, I think your problem points to the fact that the tidal wave of liquidity has floated all asset classes and none are cheap. Of course, one way to exploit this is to short or buy puts on things....

You hint at a good point here. The last five years has seen a global tidal wave of liquidity that has driven all asset classes - equities, bonds, commodities, houses, commercial property. Why is it that so many people see house prices as ludicrously over valued, but commodity prices which have risen 100% YTD to all time highs as really great value?

silver was $80 ounce in 1980 its only $14 now stick in some inflation and you will get an idea with the fundementals i just explained where the price is going. Silver spiked to $80 in 1980 when the Bunker Hunts tried to corner the silver market which should hardly be taken as representative of current market conditions. Stripping out that spike, the peak of the last 40 years is basically the price we are at right now.

You mentioned leverage - gold mining shares would give you this. You could go for individual stocks or a fund such as Merrill Lynch Gold fund. A couple of things to consider before piling into mining stocks - UK miners have outperformed the market in the last five years more than NADAQ beat the S&P in the run in to March 2000. -They stand at 40 year relative highs -They have outperformed for seven consecutive years - only once in the history of the stock market has any sector out performed for eight - Using a simple DCF, they now discount 20% medium term growth rates. No sector has ever done this rate of growth. - Money is piling in to mining trackers and particularly the Merrill Funds in the way it used to go in to Henderson and Aberdeen Global Technology - just before they imploded. You buy these now you have to totally buy in to the 'its different time' thesis. I would be very careful.

yahoo finance

Tong Pidgely, CEO of Berkely Group, sold 1m shares on Friday at 1165p - that is 40% of his entire holding in the company. This guy is one of the shrewdest operators in the UK housing market and he appears to be signalling which way he thinks things are going!

Hi Am new member to HPC and background is that I am a Fund Manager in the City who owns no housebuilder shares but constantly receives a stream of bullish research on the housing market. Am also fed up with price silliness as my neighbour sold the land in their garden for £320k to a developer who built a 350sq m house on it so I have swapped view over South Downs for view of roof of the new monstrosity. Needless to say, said developer drives a Ferrari and has enough money to run his own polo team!! Am hoping he gets come uppance when prices melt down and his quick turns become long term investments at much lower prices. Having lagged early last year, the share prices of the housebuilders took off last year as the City perception is definately that a HPC has been avoided and we are off to the races again. To give an example, the price of the largest housebuilder, Persimmon, has risen by a staggering 66% since the start of November to an all time high. Almost all of the housebuilders to report figures recently have met expectations and have commented that they see signs of confidence returning to the market. I have long been a believer that we are headed for a crash. In fact, one well known US fund management house has researched ALL previous bubbles in history and they define a bubble as any asset class that moved more than two standard deviations away from its long term average. In the history of time, there have been 28 of them (tulips, south sea bubble, nasdaq etc) and in ALL cases, they have corrected back to their long term average fairly violently. According to their studies, UK house prices are the 29th such incidence of this occuring.... However, just when 2005 looked like it would be the top, suddenly the data has started turning positive again. Can anyone out there rationalise the following figures for me? Housing transactions and mortgage approvals have suddenly shot back up to 2003 levels. What is really weird about this is that consumer confidence has crashed post the Christmas splurge, unemployment is picking up, voluntary redundancies and loan defaults are going through the roof. This would not normally be a great background to increase ones confidence in going out and buying a house and yet transactions have suddenly spiked. Anyone able to solve this apparent conundrum? City as a whole is usually pretty efficient at pricing shares which makes me worry that I am missing something.