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Brian Fricke
Copyright (c) 2010 Brian Fricke I am a financial expert. People turn to me for advice. But I will be the first to tell you I certainly have no way of knowing what’s next in terms of where the market is headed in the near future. And I want to remind you to avoid anyone who says or thinks they do. Everybody’s got an opinion. Everybody can back it up with all kinds of research. But at the end of the day, remember that if somebody really knew what the heck was going on, we’d all be lined up outside their door! And we all know that just doesn’t exist. So we’ll continue to follow our buy and sell system, which is as unemotional as possible. And we’re going to let that be our guiding light in today’s choppy cloudy economic environment. Sure, there are all kinds of so-called experts and talking heads and researchers and analysts with their own opinions on the economy and the market. Back in 2005, a well-known investment banking company by the name of Lehman Brothers (and I think we all know where they’re at today) gave their most pessimistic, negative outlook on housing. Their forecast was three years of – 5% drops in value. In other words, values would drop – 5% a year for three years, and then resume normal appreciation every year thereafter. Well, we all know what happened to the housing market — and we only wish it would have been that bad! But bad forecasting is not limited to Lehman. On the subject of housing prices, in 2004, Allen Greenspan was quoted saying that local economies could experience speculative price imbalances, but on a national basis that would be highly unlikely. In June of 2005, he reassured the world that if home prices declined, this likely would not have substantial implications. And in October 2006, back when people were bidding on homes and flipping the contracts within a couple of days without even closing, his comments were basically that housing prices were likely to be lower than the year before, but the worst was probably behind us. That was 2006, and we all know what happened to the housing market since then. The important fact here is if there was ever a person with access to all the data and all the teams of advisers and researchers, it would be Greenspan, or the Fed chairman. And they still got it wrong! Which is why our observation over the years has always been that when it seems like everybody wants to get into ‘it’, (gold anyone?) that’s the time to get out. And when everybody wants to get out, (stock market? real estate?) you want to be getting in.
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