If you look at action in stock market in the recent weeks, it may appear that we are out of woods. I think it’s too early to judge that. Real estate market gurus started singing their optimistic songs. If you look at stock price movement of builders like Toll Brothers, you can see there is lot of expectations about real estate market turn-around.

Although I like to believe in the hype and start putting my money in $70,000 house in Cape Coral, FL, I am hanging in there because it is just the hype. New York Times published an article about real estate market in Florida. It may be really tempting to go and buy couple of foreclosed properties in Florida and elsewhere. I am going to hold on to my money until employment situation is getting better. New York Times columnist mentioned in the article “age of the flipper is behind us”. You wish! Flippers make the real estate market looks sexy. Flippers are hiding for now, they will come back.

If you take a look at the action of savvy investors like Prem Watsa, this may be the right time to get back in the market. Prem Watsa was born in Hyderabad, India. He is the CEO of Fairfax financial holdings based in Toronto, Ontario. He is a graduate of the prestigious Indian Institute of Technology with a degree in Chemical Engineering and a holder of an MBA from the Richard Ivey School of Business of the University of Western Ontario. He correctly predicted the current credit crisis one year ago. In November 2007, he said that global credit squeeze was in its early days. He moved bulk of his investment portfolio to safe government bonds. He made bet against CDO like instruments that are the basic reason for global credit crisis that bankrupted many financial institutions all over the world.

His bet succeeded and made him handsome returns. Recently, he removed hedges on equity portfolio investments which typically mean that he thinks the worst is over. It appears that he is not afraid of losing money on the investments anymore. He might also think that the stock prices can’t fall too much below the current level. Whatever it is, it’s good to see an optimistic person that yield wide influence in the finance community. Hopefully this gesture would encourage other money managers to invest more in the market.

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