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Notes from the Investment World. August 20, 2008

Posted by shaferfinancial in Uncategorized.
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Haven’t posted in a few days due to being out-of-pocket for some meetings with a real estate developer I am invested with and doing work for.  Thought I would post some quick thoughts today:

1.  I have said it before, but this summer has really driven it home to me.  Real Estate is LOCAL. While everyone is my circle of friends in the real estate business is doing poorly in Florida, and those who have houses for sale are dropping prices in a desperate attempt to sell their houses, in Massachusetts it is a very different situation.  Three folks in my circle have sold their homes at asking prices in less than 45 days.  All these houses were at different price points and in different towns.  Not to say that the real estate market in New England is booming, just that the situations are completely different.  A real estate investor must keep the fundamentals in mind and not limit their investments to their particular geographic living situation.

2. Emotions rule the day for the stock market.  Makes it incredibly important to think long term and globally about stock investments.  Trying to out-guess the emotional movement of the market is simply impossible, leaving only luck as your guide.  If you have done your homework and have good long range thinking, then you simply apply your buying strategy methodically (The Buffett Way).

3. The list of folks who started their businesses in a recession is long.  It simply doesn’t matter as long as you have enough starting capital and a good business plan.

4. Layoffs are so commonplace now, that unless the numbers are huge, it doesn’t rate even mentioning in the main-stream press.

5.  Looks like we are going to see a whole DECADE of zero growth for the S & P 500 stock index.  This is devastating for the largest group of baby boomers as they were trying to play catch-up with their retirement funding.

6.  This stock market issue is also creating huge problems with local municipal pension funding.  Raise taxes or lower benefits or worse!  I expect this to be the next crisis the media exploits.  Anyone that thinks taxes are going down or even remaining stable needs to take a look at the pension responsibilities!

7.  Once again the “experts” and “talking heads” are failing to see reality for what it is, demonstrating mid-20th century thinking, in an environment that needs mid-21st century thinking! 

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