Is the real estate bubble about to burst?

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