I talked about it, but mostly we were focused on terrorism, war, and the aftermath of 9/11 to pay too much attention to the looming real estate disaster. My father warned me very loudly, though. He say it coming. I remember very clearly at Thanksgiving Dinner November 2007, he told me he was 100% cash. I was astounded and told him that's not good for his retirement. How wrong I was. Of course, like you, he's spent many years in the real estate investment and development business and has many banking contacts and partners. So he knew what was coming. Thanks to him, I got a little defensive at that point, but I still lost a goodly sum. Luckily, my father also picked the bottom and I listened to him at that point and went close to 100% stocks at the bottom and quickly made all the money back that I'd lost, and then some.
This time around, I'm prepared for what is coming and am solidly defensive. The wildcard this time around, though, is all the QE. That can keep the game going far longer than what happened last time around. It will lead to further excesses and a larger meltdown, though. So I'm choosing to forgo 20% gains in the stock market, in favor of safer 5-8% gains, so that I can avoid the losses when the big crash comes.
OH and I see the market is down big today because of the employment numbers. Don't worry about that. The Fed's minions will step in around noon time and by the end of the day, we'll be closer to break even. They won't let any big down days happen, so it won't scare people. |
