Last week Tony Robbins posted a 24 minute warning on the current financial situation. He covers credit, consumer spending, investor psychology and most importantly demographics. If you want to know my core financial thoughts, watch this video. He nailed it.
h/t HousingTimeBomb (a great concise blog)
Nice find!
What do you think we should do? His advice is very sound however he doesn’t really give us a directive (not his intent anyway). short the market? buy utilities/commodities? what do you think?
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I think the investor he may be referring to is Tom Barrack or Soros. I remember reading in 2005-2006 a great article on Tom Barrack who said that housing would fall because of the inability to get raw materials. He specifically referred to Vegas and mentioned that the builders of condos were having a hard time getting building materials and that condos that were in contract would not be able to be profitable due to the inflated material costs. Thus the developers would ask for more money at closing and the buyers would either walk away or sue for agreed upon pricing. Well, that is exactly what happened in Vegas and every bubble market for real estate; not even considering the mortage lending practices which were not discussed.
The article resonated with me because Tom Barrack has about the most colorful life in his journey to success, sort of like an Indiana Jones of international markets.
@thomas – What should we do? Get out of debt, save cash and get out of the stock market. In a deflationary environment you want to be in cash.
Building material costs had little to do with the real estate bubble. It was fraudulent lending and bubble psychology.
Besides the obvious. Robbins specifically refers to making money on the downward trend. Getting out out debt and saving doesn’t provide a positive return; maybe researching his investor clientele will give some direction.
Building materials were an early indicator of housing troubles. Remember many high-rise condos were built on forecasting a certain amount of demand fueled by lending practices that were negligent. Scarce resources were a canary in the coal mine for what was to come.
@thomas – Robbins has some high net worth clients that should be hedged to profit if the market turns. If they lose their money, they won’t be able to afford his services.
The average investor is best off staying on the sidelines. Their net worth will be the same, but that isn’t a bad deal when the net worth of others are collapsing. From a relative view come out ahead without taking any risk.
If you want to take some risks, you could buy the “SH” ticker. It goes up when the S&P 500 goes down and it does it without engaging in the leveraging of the ultra-ETFs.
great post overall, it was rude of me not to thank you initially. Anthony Robbins is another really interesting guy. He has several great speeches; although I find it hard to apply his philosophies because life gets in the way.
found this article regarding my initial question: stocks for double-dip (http://money.cnn.com/magazines/moneymag/moneymag_archive/2010/09/01/105971790/index.htm)
@thomas – CNN Money pays their bills by selling advertising to companies that want you fully invested in the stock market at all times. I think the easier money is to stay on the sidelines until valuations and honesty returns to the market. I’m in no hurry.