Everyday, all day you can catch the talking heads on CNBC, CNN, FOX: "Are we in a recession or a depression? When did it begin? When will it end? Have housing prices bottomed or will they fall further?" It seems like there is a lot of noise and pessimism, but not a lot of wisdom. And for all those of us here at Buxton who believe in data, it seems that every one with an opinion has data to support it. How can this be, and how can we, each of us and all of us together come up with a better answer? Read on…
Observable Local Fact #1: I saw a photo in my local paper this week (I live in a small town of 19,000 people in Oregon) that showed 84 railroad flatcars “abandoned” on our railroad siding by the Central Oregon and Pacific Railroad—actually stored here because there is currently no need for their freight-hauling capacity in the face of the current manufacturing slowdown. Fact: 30% (about 206,000) of all railcars belonging to the five largest U.S. railroad companies are currently in storage. I think it is reasonable that when I see these cars begin to move, it is one small, local, observable sign that the economy is moving too! And since there is a bike and run path along the tracks, I will probably see this happen long before one of the network talking heads!
Observable Local Fact #2: I have coffee several mornings a week with our local ReMax broker. This morning he told me that he is selling houses again—to first-time buyers at the lower price ranges in our local market. Low mortgage rates, an $8,000 government tax credit, incredible sale prices and willing sellers—what a great opportunity for young singles and couples just starting out. And I will hear about the action in my local coffee shop long before it makes national news.
Observable Local Facts #3: Darned if I know—but I’ll bet each of YOU do! Peter Lynch, who for a lot of years was the revered fund manager for Fidelity’s Magellan fund, used to say that if you want to know which retailers to invest in, go to the mall and see where people are shopping! I don’t pretend to be Peter Lynch, but I think if we want to know when the recession is ending, then we should pool our data points and share our observations. Houses are selling now in southern Oregon. I’ll let you know when I see the trains moving!