Is the real estate bubble about to burst?

Adam,

Who ever said there is "ONE" stock market?

Robert Campbell

Investment Items bought with cash go up.
Investment Items bought with debt go down.

Gold Coins vs Real Estate.

Or.

Some other "investment" to hold or increase the value of your money while R.E. drops in value.

Hmmm.... interesting, Boyd.

Michael Ross

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Disclaimer: I am not a licensed investment advisor or broker. Nothing contained in any communication from me shall be construed as investment or any other advice.
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Hi,

Thank you for your message.

You wrote:
> Investment Items bought with cash go up.

I've been trying to understand whether deflation or inflation is coming, so I can figure out how to position myself. Some people are predicting deflation while others are predicting inflation. On another forum recently someone posted an article by The Mogambo Guru in which he said, essentially, "here's why hyperinflation is coming," and in a followup message someone else said "he must be a gold bug: the reasons he gave actually prove that deflation is coming." Frankly, it makes my head hurt. Economics is incredibly confusing, and apparently even the high-paid big brains with degrees from Ivy League schools don't really have a tight grip on it. One thing I recently read predicted simultaneous deflation and inflation (with inflation being used in the Joe Sixpack sense of rising prices); hence my message. In my message where I mentioned the possibility of rising prices for items purchased with cash, BTW, I wasn't talking about investment items but rather about normal commodities.

Best,

- Boyd

Hi,

Question:

How can someone who seems to have a need to be praised a lot channel that need into making a lot of money?

Thanks in advance for any replies,

- Boyd

Become an actor...

> Hi,

> Question:

> How can someone who seems to have a need to
> be praised a lot channel that need into
> making a lot of money?

> Thanks in advance for any replies,

> - Boyd

Inflation. Deflation. HyperInflation. HyperDeflation. French-Onion Double Dip Recession Inflation Stagnation. Alien Nation. Arrrrrgggggggg. Someone let me out of this cartoon.

We're not in Kansas anymore Toto. Ruff.

Okay. Assume Inflation. What is your Plan Of Attack?

Now. Assume Deflation. What is your Plan of Attack?

Which one, in your mind, is the worst case scenario?

If you go with that plan and it turns out different, will you be worse off? Can you adapt to the other plan quickly?

I like to keep things simple. Creating a million different names for a million different stages of an economic cycle is,

silly.

Economy. Is it "good" or "bad" in YOUR eyes? What evidence do YOU see? Now what are other people saying... what do you SEE? What does what you see mean?

CPI and all that has always been a bunch of mumbo-jumbo in my opinion. The man on the street is informed of those rising or falling CPI figures as if that means something to him. When all he realy knows is that the price of his steak has risen while a can of baked beans has gone down. Gas prices are anyone's guess - and there is no collaberation between gas companies even though they all seem to raise and lower their prices by the exact same amount in the same hour on the same day.

Are there more or fewer people at the flea markets? Is the Second Hand furniture business picking up or dropping off?

Are the shopping trolleys filled more with brand products or no-brand products?

Approach any cleaners you know and ask them if toilet paper theft has risen or fallen? Ask them if business is picking up or dropping off? Hired Cleaning Contractors are the first thing to be discarded by a struggling business.

McDonald's has a negative quarter/year. Was it because of a price war with Burger King or are there other factors involved - more and more people becoming health-aware, etc.?

Stores closing down in your area? Are they the ones that appear only to disappear a few months later. And the same thing happens with whoever opens a store in that "doomed" store front? Or are they stores which have been there for years and years? Why did they close?

I don't care what the so-called experts say. They can't even agree anyway. BUT... I do pay attention to the man on the street. I listen to the joys and pains they express. I see their spending habits. I listen to business owners - who only ever seem to complain with only the degree changing.

These non-scientific indicators give me a better "take" than some $200,000+ a year analyst on the 37th floor of downtown Manhattan, who plays golf three times a week at the $10,000 a year membership golf club.

The man on the street might be a sheep - even without realising it. And so it's good to watch him. Hey, the analyst is also a sheep - following whatever the other analysts say, like lemmings.

So, Boyd... forgetting about what the "experts" say... what do your eyes and ears tell you?

Michael Ross

Hi,

You wrote:
> Okay. Assume Inflation. What is your Plan Of
> Attack?

I'd better discuss this with you via email if you'd like.

One interesting thing is I recently saw a list of items that are said to be "objects of permanent value." Things like gold, stamps, rare books, silver, non-gold U.S. coins, masterpiece paintings, diamonds, farmland, etc. I said to myself "Hey, that's the kind of stuff richies buy!" Then I did a Homer Simpson-like 'D'oh!' See, I'd always felt that richies bought Rembrandt paintings just to get an ego-stroke when they say them hanging on their rainforest-mahogany walls. It occured to me that maybe the Rembrandt wasn't an expression of vanity but rather an exchange of paper money for an "object of permanent value."

You wrote:
> Now. Assume Deflation. What is your Plan of
> Attack?

Buying cool stuff when the price gets low enough.

You wrote:
> Which one, in your mind, is the worst case
> scenario?

Living in crude huts made of hundred dollar bills wouldn't be very fun.

You wrote:
> If you go with that plan and it turns out
> different, will you be worse off? Can you
> adapt to the other plan quickly?

This might be another email topic if you'd like.

You wrote:
> Economy. Is it "good" or
> "bad" in YOUR eyes? What evidence
> do YOU see? Now what are other people
> saying... what do you SEE? What does what
> you see mean?

That's a very good point! As are your observations of taking readings on the economy by observing what's actually going on around you.

You wrote:
> CPI and all that has always been a bunch of
> mumbo-jumbo in my opinion. The man on the
> street is informed of those rising or
> falling CPI figures as if that means
> something to him. When all he realy knows is
> that the price of his steak has risen while
> a can of baked beans has gone down. Gas
> prices are anyone's guess - and there is no
> collaberation between gas companies even
> though they all seem to raise and lower
> their prices by the exact same amount in the
> same hour on the same day.

The man on the street has been hit with so much strange stuff (weird diseases, terror alerts, the possibility of being attacked at any moment, all the stuff they show on the TV news) that he's adopted a weary "Whatever..." attitude. He's shell-shocked.

You wrote:
> These non-scientific indicators give me a
> better "take" than some $200,000+
> a year analyst on the 37th floor of downtown
> Manhattan, who plays golf three times a week
> at the $10,000 a year membership golf club.

Good point.

You wrote:
> So, Boyd... forgetting about what the
> "experts" say... what do your eyes
> and ears tell you?

I'm an internet recluse, I barely set foot outside my room, all I know is what I see on these three computer screens in front of me.

Thank you very much for your astute observations. You have tons of common sense, which is misnamed since it's getting so uncommon these days.

Best,

- Boyd

Hi Boyd,

> One interesting thing is I recently saw a
> list of items that are said to be
> "objects of permanent value."
> Things like gold, stamps, rare books,
> silver, non-gold U.S. coins, masterpiece
> paintings, diamonds, farmland, etc. I said
> to myself "Hey, that's the kind of
> stuff richies buy!" Then I did a Homer
> Simpson-like 'D'oh!' See, I'd always felt
> that richies bought Rembrandt paintings just
> to get an ego-stroke when they say them
> hanging on their rainforest-mahogany walls.
> It occured to me that maybe the Rembrandt
> wasn't an expression of vanity but rather an
> exchange of paper money for an "object
> of permanent value."

I think this is a great observation!

I remember reading that while J. Paul Getty made his first fortune in oil - he also made a second fortune, this time in art. (At one time, J. Paul Getty was the richest man in America.)

I don't remember the reason - maybe it was the depression? - but art had gone down in value by quite a bit. He paid someone to teach him how to recognize a good piece of art, then bought art all over the place at their low values. When the prices went up again (as he knew they would), J. Paul Getty had made a second fortune.

I'll have to re-look up the details one day - I have a feeling I read it in his book "How to be Rich" (which I have sitting on my shelves).

- Dien Rice

Hi,

Thanks for your message and kind words.

Man, the coming hard times are going to open up some kickass opportunities for those with a little knowledge or who are in the right spot at the right time.

I'm a fan of a particular set of rare pulp spy novels from the 1960s and now I've got a reason to tell my wife why collecting them is a good thing to do, despite their high cost per copy:

"But dear, they're objects of permanent value!"

Best,

- Boyd

> I'm a fan of a particular set of rare pulp
> spy novels from the 1960s and now I've got a
> reason to tell my wife why collecting them
> is a good thing to do, despite their high
> cost per copy:

> "But dear, they're objects of permanent
> value!"

Art is really a greater fool item. Better to create art and sell to a list of obtained clients and buyers. How you get this list and get them interested in your art is not the point of this discussion.

Alan Bond now knows the truth about art. Bye bye $56 mil

As for your novels. I would class that as memorabilia. And according to Gary Henrickson - if my memory serves me correctly - memorabilia has a high price life between 25 and 45 years. That is... 25 to 45 years after it was made, in fashion, in vogue, etc.

The logic is... at this time period those who grew up with it now have the disposable income to buy back pieces of their "childhood."

After this time period, all the childhood buying back is done and the price falls - those who did not grow up with those items have no interest (or only little interest) in the items.

Assuming this logic is true... items which were made around 1978 should soon begin to fetch higher prices. And should continue to do so for another twenty years. After which time, demand will decline - and so will "value."

On a side note... I am amazed how people will pay $100 - $200 for a modern clock (or spend nearly that much on wood and clock works and then make their own) when for the same money they can get hold of a nice looking art deco clock. The art deco clock will hold its value more. And is usually not made of cheap MDF or other throw away materials.

Anyway. The 25 to 45 year age thing is something you might want to consider before you buy "modern" old things. It means you can get rid of old stuff you have before it declines in value. And buy stuff before it goes up in value.

Michael Ross


$35,550 a week. That's what the woman we just wrote about makes. Subscribe and you get to read how