I thought I would throw a little comedy on here this morning after the gloomy weekend posts.
I wish the data looked better everyone! Trust me, I love bull markets as much as the next guy. They are much easier on the stomach versus trying to predict where this manic market is headed. This is what bear markets are like. There are lots of rallies on hope and selling on panic.
Many day traders will go broke because its easy to get caught on the wrong side of the trade. You simply can't predict when the FED is going to come out with a stick save and rally the markets. You also can't predict where the next time bomb is about to go off sending the DOW down 400 points.
Playing defense with your portfolio is the best way to protect yourself. Cash is king during turbulent times like these.
Anyway, enjoy the following speculator story. I am amazed at how stupid some people are when bubbles are being blown up.
100% neg am loans. What was he thinking!
My favorite quote:
"I knew I was sitting on time bombs," Forgaard said. "I knew the market was going to go soft and I knew that property values would decline. But I figured that I had enough equity to survive the storm and sell or take the loss and refinance.
"I didn't anticipate a downturn of epic proportions such that home values are 40 percent less than they were," he said."
If thats not the understatement of the year. This is why it will take years and years to cleanup this housing downturn. Buyers were never this reckless during any other housing bubble. Speculators also never had the ability to borrow so much money with leverage like they did from 2003-2007. Leverage is great when prices are going up. However, it can put you into BK in a heart beat on the way down. Mr. Forgaard found this out the hard way.
This is why you are seeing the biggest price declines in the history of the housing market.
Thank your lucky stars this isn't you!!
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