Re: GREENSPAN SPEAKS!!
Well, most people do dissagree with me about the risk their houses may or may not have. Again: THIS IS NOT A RECOMENDATION IN ANY WAY SHAPE OR FORM, jus' stimulatin' a li'l critical thinkin' here. After all, ever since FDR set up the ol' 30 year FDA mortgage the direction has generally been up, n' most all of us invest by lookin' in the rear view mirror. That's the funny thing 'bout investin' in anything. It's emotional, (for all of us no matter how hard we try to make it pure logic). You live in your house n' so it is a very tangable thing that has given you a good return, and kept ya safe n' warm as well. Ponder the folks in the oil patch, (Texas large towns, n' Alaska large towns) after the Saudis drove the price of awl to $10 per barrel from $30 in 1985. It was regional but it was a real eye opener. Could that happen again?? You know it could. Ponder the New Englanders' plight after 10/19/1987? Again a regional situation. How about Hawaii in 1990 after the Japanise demographic peak in 1989? Regional again. Now the 'big one' ta think about: there are 77 million baby boomers, (the real movers n' shakers here in the USA) that think just like you: Stevieray. Most of their lives houses have gone up up up, (the three notable exceptions stated). Very cornvincing it will go on for another 70 years or so eh? Hmmmmm. Maybe, maybe not. That is why people MUST DIVERSIFY. Only risk takers should have all their eggs in one basket n' watch the ol' basket very carefully n' learn all the things that can cause problems for the basket. Lets ponder a few: #1 all time high in home ownership. #2 all time high in borrowed money in the consumer sector, (where do ya think the maximum leverage is with the ol' cornsumer)? #3 expectations of: gravity does not exist in housing, (can't blame 'em for feelin' that way as 70+ years is a real long time). #4 prices near all time highs, #5 The big one that really is a li'l different this time: the 'mother of all' demographic peaks. In my experence in securities, (where there is real life DRAMA), unsofisticated investors always buy the most stock at market peaks n' sell at market bottoms. Old farts (like me), call that the "odd lot" theory. People who buy less then 100 shares are odd lot buyers. Moral o' the story: when they line the deck chairs on the ol' Titanic ya better look for a life raft. (It is a real life delemma as most sucessful investors spot a trend n' log on, key question: how long does the trend last? [70 years? 140 years? you tell me]. As people age do they need the 10,000 square foot houses in Tennessee n' two more for good measure as they have gone up for the last 70 years? Ponder that one. We all should own a piece o' dirt, n' keep the leverage at a minimum, (so what if it goes down in value), ya gotta live somewhere right? We all should have a diversified stock n' bond portfolio, n' other things that help our lives as well. I hope the massive immagration we have experienced, (I like God fearin' Legal immagrants, [the kind that believe in a God that does not condone suicide bombin' n' all], make the demographic peak a li'l less nasty, but caveat emptor: demographic peaks have been real dangerous most times in the past. Some readin' ta tease the brain: Harry Dent n' Pat Buchanan's "Death of the West". Dent is a best selling author who has nearly a 'cult following' and talks in real dramma terms that may be ginned up to sell books et al. "Don't believe everything ya read". (but apply CRITACAL THINKIN' once you have the information). That said: his points are undeniable to critical thinkers, jus' the drama seems a li'l suspect. Buchanan talks about the same issue in political terms. I not sayin' chicken little is right I'm jus' sayin' try to be aware of the flip side of every coin. Sorry for the rant said way more then I intended here. Respectfully JR
