it's coming...

[moralist]

The next day of reckoning is coming...

...when it's time to fleece the fools... again.

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/11666355/Bond-crash-across-the-world-as-deflation-trade-goes-horribly-wrong.html

Greg

[Peter]

Do you know how many times I have heard this same spiel since 1970? "How to Prepare for the Coming Crash," was one of those paperbacks I kept on my desk. Of course America is closer to a tipping point but we never seem to reach that point. Keynsian economics can delay the inevitable even for Greece. What a cool slight of hand the Progressives possess. What foolishness all of us who have not gone Galt possess. We will prop them up as long as they are in power as we experience smaller and smaller expectations and decreased life styles.

Hypothetically, Greg and other readers, if you had some money coming in, where would you put it for safety, return and growth? The mattress and the safety deposit box are for the Big Plunge that never occurs. In my Maryland County property values have gone way down lower than the assessed value even if some of my family's acreage is commercial. Oh, cry for me Argentina.

[BaalChatzaf]

Do you know how many times I have heard this same spiel since 1970? "How to Prepare for the Coming Crash," was one of those paperbacks I kept on my desk. Of course America is closer to a tipping point but we never seem to reach that point. Keynsian economics can delay the inevitable even for Greece. What a cool slight of hand the Progressives possess. What foolishness all of us who have not gone Galt possess. We will prop them up as long as they are in power as we experience smaller and smaller expectations and decreased life styles.

Hypothetically, Greg and other readers, if you had some money coming in, where would you put it for safety, return and growth? The mattress and the safety deposit box are for the Big Plunge that never occurs. In my Maryland County property values have gone way down lower than the assessed value even if some of my family's acreage is commercial. Oh, cry for me Argentina.

Bingo! The people who are making out are the ones that write books like "The Coming Crash!!!!"

[moralist]

Hypothetically, Greg and other readers, if you had some money coming in, where would you put it for safety, return and growth?

I create my own independent economy (like Galt's Gulch) by plowing my profits back into my own business ventures where they compound on themselves. This is how to be free of becoming collateral damage of the stupidity of others. The next one will make the last one seem like a picnic, because the same stupid people have doubled down on the same stupid things they were doing that caused the last debt crash.

This is just the stupid getting exactly what they deserve... again.

Greg

[moralist]

Bingo! The people who are making out are the ones that write books like "The Coming Crash!!!!"

I make out great in crashes,

and I don't write books.

Greg

[Reidy]

Throughout history, a reliable way to become famous and wealthy has been to predict disaster. More specifically, it's been to predict the kind of disaster that one can avoid by ponying up to join the elect. This is how religions have used judgement day, armageddon or the rapture. During the Kennedy era it was bomb shelters, which morphed straightforwardly into Y2K disaster kits and, in California, earthquake preparedness kits.

Books, seminars and investment services that predict imminent doom are yet another version of this. Harry Browne got on to the bestseller list this way, Casey and Ruff rode his momentum, and Ravi Bhatra sold a leftist version of the same. Browne was, like the bomb-shelter crowd, even recommending that we lay in a survival kit of bottled water, guns and silver dimes.

I remember seeing an article in Esquire some years ago which looked back on various pop investment books including Browne, Casey and Ruff. It reported how the books had sold and calculated what an investor would have made following their advice. The doomsdayers had sold plenty of books, but their advice, by then, would have cost an investor money. The only one whose advice turned out well had said, in 1982, the bottom of the Volcker downturn, that stocks are undervalued and that one would be wise to get into the market. It sank without a trace.

[moralist]

I found the reliable way to consistently prosper regardless of economic or political cycles is to simply not do the stupid things I see others doing. These cyclic crashes that wipe out the fools who are smaller than their money are powerless to affect productive Capitalists who operate on the rock solid security of a debt-free financial foundation.

(By the way, I'm a big fan of Dave Ramsey )

Greg

[Brant Gaede]

Throughout history, a reliable way to become famous and wealthy has been to predict disaster. More specifically, it's been to predict the kind of disaster that one can avoid by ponying up to join the elect. This is how religions have used judgement day, armageddon or the rapture. During the Kennedy era it was bomb shelters, which morphed straightforwardly into Y2K disaster kits and, in California, earthquake preparedness kits.

Books, seminars and investment services that predict imminent doom are yet another version of this. Harry Browne got on to the bestseller list this way, Casey and Ruff rode his momentum, and Ravi Bhatra sold a leftist version of the same. Browne was, like the bomb-shelter crowd, even recommending that we lay in a survival kit of bottled water, guns and silver dimes.

I remember seeing an article in Esquire some years ago which looked back on various pop investment books including Browne, Casey and Ruff. It reported how the books had sold and calculated what an investor would have made following their advice. The doomsdayers had sold plenty of books, but their advice, by then, would have cost an investor money. The only one whose advice turned out well had said, in 1982, the bottom of the Volcker downturn, that stocks are undervalued and that one would be wise to get into the market. It sank without a trace.

Almost all investment books back then were not very good. The markets essentially went nowhere between 1967-1982, but sometimes violently fluctuated in value while the big Nifty-Fifty stocks were wiped out 90%. This made a good market for purveyors of disaster scenarios. They sincerely believed their book. Of the three mentioned, Brown was the safest and Casey the best story teller. Ruff was fluff.

There is now a lot of very good information available for investing. Not for trading. Most traders fail and are eaten alive by the few who succeed. Your are competing against super brainy people and super fast computers scalping pennies for millions.

--invest, don't trade

--buy a piece of a business and buy it cheap and keep it unless the story changes, not the price except if it goes down 35% against a full position

--no one can predict the future except by luck and most of those end up unlucky eventually

--no investment in stocks until you have 10,000 dollars in a low cost S & P 500 mutual fund

--diversify into no more than 10 different equities

--have multiple streams of income and save

--never use leverage

--for options you can sell covered calls only, but the broker must hold the shares you are selling the options against

--have extra cash to buy something cheap when it gets cheap even if for macro reasons and everybody is panicking: you must never, ever, panic sell and you won't have to unless you've used leverage

--gold is for insurance against catastrophe, not inflation, and has no intrinsic value. Intrinsic value does not exist for value is in one's head, not in an object

--have the broker send you the paper stock certificates when you have purchased a full position, for until you do neither you nor the broker own those shares--the broker has a claim on the shares and you have through the broker and your ownership is a convenient myth for both of you

--the great 35 year bond market is greatly mature

--buy in tranches--once the investment is full use a 35% trailing stop loss on the position. Then you take your certificates to your broker and have him sell them for otherwise you might take a 100% loss

--a dividend can be reinvested or put in your pocket, but is good evidence of a company's value for it had to have money to pay you money

--investigate "DRIP" investing

--etc.

--Brant

[Derek McGowan]

In my Maryland County property values have gone way down lower than the assessed value even if some of my family's acreage is commercial.

Never worry about the value of a property (unless you took on too much debt and have to keep a close eye on selling just to save yourself) and instead only worry about what rents you can get from the place.

This is what I have learned..

1st

Too often people look at the neighborhood that they would choose to live in (nice and expensive) and when the idea of investment property comes up they can only think of how much it would cost to buy such property in a similar neighborhood.

"I need a loan for $450,000 to buy one investment property"

Uh, no. You need to realize that just because you wouldn't live in x neighborhood doesn't mean that others wouldn't. X neighborhood is normal for some folks. I mean think about it, someone accustomed to living in Beverly Hills wouldn't dream of living in your neighborhood either (including Montgomery County) So please think about buying in a lower class neighborhood. I'm finishing a deal on my fourth place now (final title work being drawn up) and it has 5 apartments in it and cost me 80,000. That means 20% 16,000 thousand down and my mortgage is for 64. That means my mortgage will be somewhere between 3-400 dollars. There is almost no risk!

2nd

"But..." you say "you can only charge 600 for an apartment LOL, where I'm from we pay 1200. If I can't get 1200 and apartment then there is no point in me getting in the game"

This is nonsense. If I get 3000 from the building and the mortgage is 400, I clear and easy 2600 (or more realistically 2300 when you take out Public Service electricity and the quarterly water bill) You can't do anything with an extra, no risk 2300 a month?

3rd

"but the value on the resale is so low" you say.

Do I look like I care to resell? I don't even have to save for retirement. Why? Because the 6,000 a month that I make off of real estate right now (not including future purchases) will be coming in from now on through my retirement, FOREVER! Who needs the stress of calculating a nest egg that slowly dwindles. Money comes in FOREVER! The only way you don't get it is if the place catches fire (that's why you have insurance) or you don't pay your property taxes (in which case you are dumb)

[Backlighting]

Some yrs back I read a story of a man who purchased an apartment bldg at a very low price. The price was low because the bldg was on a street which had an elevated train track a stones throw from it. Needless to say the noise of the trains passing thru was enough to scare off any potential renters.

His solution: he modified & advertised the apartments to accommodate deaf individuals, putting in special telephones that lit up when calls came in and a doorbell which, when depressed, turned on a light over the door. In no time at all his building was full with happy, deaf renters.

[moralist]

In my Maryland County property values have gone way down lower than the assessed value even if some of my family's acreage is commercial.

Never worry about the value of a property (unless you took on too much debt and have to keep a close eye on selling just to save yourself) and instead only worry about what rents you can get from the place.

This is what I have learned..

1st

Too often people look at the neighborhood that they would choose to live in (nice and expensive) and when the idea of investment property comes up they can only think of how much it would cost to buy such property in a similar neighborhood.

"I need a loan for $450,000 to buy one investment property"

Uh, no. You need to realize that just because you wouldn't live in x neighborhood doesn't mean that others wouldn't. X neighborhood is normal for some folks. I mean think about it, someone accustomed to living in Beverly Hills wouldn't dream of living in your neighborhood either (including Montgomery County) So please think about buying in a lower class neighborhood. I'm finishing a deal on my fourth place now (final title work being drawn up) and it has 5 apartments in it and cost me 80,000. That means 20% 16,000 thousand down and my mortgage is for 64. That means my mortgage will be somewhere between 3-400 dollars. There is almost no risk!

2nd

"But..." you say "you can only charge 600 for an apartment LOL, where I'm from we pay 1200. If I can't get 1200 and apartment then there is no point in me getting in the game"

This is nonsense. If I get 3000 from the building and the mortgage is 400, I clear and easy 2600 (or more realistically 2300 when you take out Public Service electricity and the quarterly water bill) You can't do anything with an extra, no risk 2300 a month?

3rd

"but the value on the resale is so low" you say.

Do I look like I care to resell? I don't even have to save for retirement. Why? Because the 6,000 a month that I make off of real estate right now (not including future purchases) will be coming in from now on through my retirement, FOREVER! Who needs the stress of calculating a nest egg that slowly dwindles. Money comes in FOREVER! The only way you don't get it is if the place catches fire (that's why you have insurance) or you don't pay your property taxes (in which case you are dumb)

I'm happy for you Derek.

That's how to buy your own economic freedom. Do you use a management company or have the time to manage it yourself?

Greg

[Brant Gaede]

You can certainly tell when someone knows what he's talking about.

--Brant

especially if he puts up numbers

[moralist]

You can certainly tell when someone knows what he's talking about.

--Brant

especially if he puts up numbers

Yeah, Derek's not bs'ing. You can tell when experience is real.

Greg

[Derek McGowan]

Do you use a management company or have the time to manage it yourself?

Greg

Currently I do it all myself. Im sure I can handle maybe 10 more before I needed help (still young!)

p.s. 4th misconception tied to my above statement

There really isn't that much stress to being a landlord. Maybe you spend 3 months fixing stuff, but thats still 9 months of just kicking back and collecting. You take the good with the (little bit of ) bad

[Brant Gaede]

Do you use a management company or have the time to manage it yourself?

Greg

Currently I do it all myself. Im sure I can handle maybe 10 more before I needed help (still young!)

p.s. 4th misconception tied to my above statement

There really isn't that much stress to being a landlord. Maybe you spend 3 months fixing stuff, but thats still 9 months of just kicking back and collecting. You take the good with the (little bit of ) bad

It's all in the tenant vetting once the numbers are right.

--Brant

[moralist]

Currently I do it all myself. Im sure I can handle maybe 10 more before I needed help (still young!)

p.s. 4th misconception tied to my above statement

There really isn't that much stress to being a landlord. Maybe you spend 3 months fixing stuff, but thats still 9 months of just kicking back and collecting. You take the good with the (little bit of ) bad

I understand... I was a HOA President and rode herd on 400+ townhouse owners for a couple of years. The Board and I used a small management company to handle the finances insurance and legal stuff, while we handled the day to day decision making.

Greg

[Peter]

Derek wrote:

There really isn't that much stress to being a landlord. Maybe you spend 3 months fixing stuff, but that's still 9 months of just kicking back and collecting. You take the good with the (little bit of ) bad

end quote

Excellent Derek, you sound like the land lord protagonist, Easy Rawlins in a Walter Mosely novel, and I think there was an older guy too who was a landlord but I cant remember his name. Its not a job I would want, in Mosely's Los Angeles, or in Baltimore. Mosely is an interesting man. His mother was a white, Russian, Jewish emigree. Hmm. Denzel could play the part of Easy Derek, even if you did pan his last movie.

My father in law had two trailer/cabin parks with roughly 20 dwellings for lower income individuals and they were voluntarily segregated until he sold or demolished them in the early 80s. He was tough. Sometimes being a landlord required forced evictions and some big and rough hired temps or a sheriffs deputy too. If he was angry about a tenant not paying he would shut off their electricity. If that did not work he would remove their front doors. One time some people were keeping chickens under their cabin. They had cut a hole in the floor, to feed the flock. Unbelievable.

[Brant Gaede]

Derek wrote:

There really isn't that much stress to being a landlord. Maybe you spend 3 months fixing stuff, but that's still 9 months of just kicking back and collecting. You take the good with the (little bit of ) bad

end quote

Excellent Derek, you sound like the land lord protagonist, Easy Rawlins in a Walter Mosely novel, and I think there was an older guy too who was a landlord but I cant remember his name. Its not a job I would want, in Mosely's Los Angeles, or in Baltimore. Mosely is an interesting man. His mother was a white, Russian, Jewish emigree. Hmm. Denzel could play the part of Easy Derek, even if you did pan his last movie.

My father in law had two trailer/cabin parks with roughly 20 dwellings for lower income individuals and they were voluntarily segregated until he sold or demolished them in the early 80s. He was tough. Sometimes being a landlord required forced evictions and some big and rough hired temps or a sheriffs deputy too. If he was angry about a tenant not paying he would shut off their electricity. If that did not work he would remove their front doors. One time some people were keeping chickens under their cabin. They had cut a hole in the floor, to feed the flock. Unbelievable.

Own the land and the infrastructure but not the manufactured home on top. Your tenants are then renters of the space and their home is collateral for the rent and good behavior specified in the lease.

--Brant

[moralist]

That's the best way.

Everyone owned their own townhome and under 5% were rented out. With so many people having "skin in the game", the HOA ran pretty smoothly.

Greg