Charting Housing, China and Social Gaming

Prediction: In early February, I boldly proclaimed that the U.S. residential real estate market hit rock bottom.

Proof: The latest reading of the S&P/Case-Shiller 20-City Composite Index.

Real estate prices rose 1.3%, or 0.7% on a seasonally adjusted basis.

Digging into the data reveals that prices in 19 out of 20 cities registered gains. So there’s no anomaly in the data. A major price increase in a single market isn’t skewing the results. The rebound is legit.

The trend is even more apparent when we look at the year-over-year changes in prices.

Bottom Line: Accept it. The housing bust is (finally) over.

Or as Bill McBride at Calculated Risk says, “It might be hard to believe, but earlier this year there was a debate on whether housing had bottomed. That debate is over… and the debate is now about the strength of the recovery.”

Prediction: Starting in August 2011, I issued warning, after warning, after warning, after warning, after warning that a slowdown in the world’s fastest-growing economy was brewing. And, in turn, Chinese stocks were a bad bet.

Proof: The price performance for the Shanghai Composite Index.

Since November 2010, Chinese stocks are down 29.8%. In comparison, U.S. stocks are up about 7% over the same period.

And in the last two months the selloff has accelerated, with the Shanghai Composite down 9.6%, which is more than double the decline for U.S. stocks.

Bottom line: I’d avoid any thoughts of bargain hunting or bottom fishing in China. At least until the economic readings start improving.

Prediction: On a CNBC appearance in late December, I dogged social-gaming juggernaut, and recent IPO,Zynga (Nasdaq: ZNGA). Instead, I recommended investors buy the lesser-known, Glu Mobile (Nasdaq: GLUU)

Proof: The price performance for both stocks.

Zynga’s down about 40% since that time. But Glu’s up 60%!

Bottom line: Zynga serves as the latest reminder – after Zipcar and Groupon, which I also panned – that we should never bet on the most-hyped IPOs.