Michael's Blog: "So if you wait for the robins, spring will be over."--Advice from Warren Buffett

Michael this is a great post - many good points were made. If only the market will start reacting. I'm with you if this ain't bottom - It's pretty darn close!

Great post - I agree wholeheartedly and applaud the fact that real estate bought now will be worth a lot more in 10 years, especially waterfront.

Michael

I had planned to write a blog about this very same thing from Warrne Buffett.  I believe he said that "when the robins sing, spring is over."  How true that is.  We can derive a lot of inspiration from this man. 

I think this post was very well done and very good advice.  Now, is the time to buy with or without cash, people can get reasonable loans and I see owner financing on the rise, too.

Great post, Michael.  I am worried about my stocks... I have held onto them despite what has been going on.

OUTSTANDING....applause, applause. We have a custom here...since Robins are one of the first signs of spring..and that is that you wish on the first one you see and your wish will come true....I think they have gone south for now....we will have to find another sign to wish on....and hope the buyers do likewise !

Carol and Darla, thanks for the compliments. His article just really struck a chord with me as it is really relevant. His advice was some of the best I have heard yet.

Diane, I find Warren Buffett very inspirational. If and when they run it again, catch his interview on PBS with Charlie Rose. It was very enlightening. I try and watch every time that he is being interviewed. MSNBC also did a series with him that was exceptional as well.

Jane, I think it is the best time to buy. Many wise people say that we should all save for the lows and the dips in the markets as this is when the best opportunities arise.

Shirley, I think everyone is suffering as well. As I am not qualified to give advice on stocks, I cannot directly advise you, however, I will pass on some good advice from Suzi Orman, which is standard advice that a lot of experienced investors follow. It is to continue investing every month in your 401-K or to your self-funded retirement account, because that way you dollar average your investment and take advantage of the market when it dips low as well. Of course, you have to have the money to invest at the time. I would suggest reading the Op-Ed article I excerpted this post from (by Warren Buffett), as well as some other proven investors to learn how to handle all of the different scenarios that could materialize.

I have tremendous respect for Buffett, he truly is one of the best, if not the best investor of all time, but...

There's also a saying about trying to catch a falling knife, it is impossible to time it right.  It true that the best deals are found when everybody else is fearful, but way, way too many people get killed trying to catch a bottom.  It's much better to wait until you see clear indicators of a recovery, even if you miss the first 10% of the upswing, to avoid getting killed by another 30% downswing.

One of the things people have to realize about Buffett, is he is able to invest in ways that the vast majority of investors can't.  He's not going out there an buying common stock but rather making large investments through warrents and preferred which give him some guarenteed returns, and provide some significant downside protection in the short or intermediate term. For example if you look at his Goldman Sachs investment he gets a 10% dividend on his preferred stock, plus got warrents at a significant discount to the stock price at the time.  If I could have made that deal, I would have, but no way I buy common stock in that company right now as an individual investor.

I hope for a chance to load up on depreciated assets in the next couple years, but every long term indicator I use is pointing to significantly more downside in the next 12-24 months, even though there maybe several intermediate bottoms in various assets.  I particularly want to see clear signs of the credit markets improving, and right now I'm only seeing a worsening trend.  We've yet to see the effects of major economic disruptions due to these credit market problems, but they are coming, guarenteed.

Just my 2 cents as an investor myself, I haven't seen the whites in their eyes yet...

Matt, you are saying is what many people believe as well. Sometimes it is best to be cautious and catch the markets on the upswing. Of course, his investments are a little more sophisticated than the average person. Uutilizing the option strategy is a great way to minimize the downside risk. One piece of advice I was given many years ago by a very good long-term investor in the stock market was..."if you can't sleep well at night and are thinking all of the time about your investments, get out of the market." Then again, I don't think he ever encountered a market like our current one. Let's hope that things turn positive sooner rather than later.

Sally and Dave, Let's hope there are some other good signs out there.

Michael- Congrats on your featured post! That is awesome. I was coming here to flag it for a feature but someone beat me to it:) Very well written article and see that others think so to cause you got the reblog thing going on! Love it! Now is a great time to put your money into real estate. We are getting a lot of all cash offers down here!

Michael~  I really don't like to think of it as "Greedy".... As you said.." Be fearful when others are greedy, and be greedy when others are fearful."  I think "greedy" is not really the best word....I know what you mean.  Greedy is just so negative.  I just think you have to make educated, intelligent decisions.   

Vickie, I agree with you about the use of the word "greedy", however, i did not want to misquote Mr. Buffett here. Perhaps he meant it the same way but chose the wrong word.

Katerina, Thanks. I am looking for more of those cash offers down here in Miami. It seems that the market down here is ripe for the picking!

Michael, I think for true investors and for people looking to live in a "home" now is a great time to buy.  So many people do get too focused on the bottom.  I'm glad Warren Buffet is buying American right now.

Michael,

Great post and so true !!! I believe that this will be the time where new fortunes will be made... in real estate and in the financial markets as well.

Fear and greed - booms and busts - opportunity and risk.  Thanks for the Miami stats - if we had a little more jingo I love the thought of owning in other states... investment properties that is... we will continue to focus on getting more investment properties in Philly... as that is what we know the best.

Hi Michael,  I hope this advice is taken to heart by those wondering if this is a time to buy !  Good selling to you.chokecherry

Michael,

Great post! More people should read more great books and get the tips a clues from the experience that has come before us!

"Be fearful when others are greedy, and be greedy when others are fearful."

I have heard this before, and it totally makes sense to me. It goes back to the what my mom taught me when I was growing up..."Just because everyone is going the SAME direction...it doesn't mean it is the RIGHT direction." She taught me that most people are followers. She taught me to be a leader...not a follower. I am so thankful for that.

GREAT STUFF! Congratulations on the little shiny star...and GBU!

Chris and Stephanie, I think it will be a great time for many Realtors, homeowners and investors who can take advantage of this market. Good luck to you in Philly.

Bill, Me too. I think a lot of buyers are just waiting for the financial markets to stabilize and the election. At least those are the two reasons I hear the most right now.

Michael,

Great post --- I agree with you.  You did a great job of presenting.

Liz Loadholt

AgentOwned Realty

Hi Elizabeth, I think the contrarian philosophy is one thing to believe in and another to take action on. It takes guts and some extra money as it is hard to go in a different direction when many say go the other way. However, when you use as an example the media and the people who wholeheartedly believe everything the media says, it is not as difficult to go in the opposite direction provided you have enough information to make an educated decision.  Take care.

Bill, it would be nice if more people read books by many of the great people who have experienced markets like this, which reminds me that I could use a few more "interesting" books.

Carolyn, I think you hit the nail right on the head. Buyers that can wait long-term for their investment to mature, or can live in their home for several years are going to be the big winners here.

Liz, Thanks for your comment.

I always think real estate is a bargain simply because they are not making anymore of it as they once said. But anytime you can buy something with some elses more and either rent it out or hold it till it goes up you profit. Because you have to live somewhere so even by you making the payments you cannot help but profit.

Hello Michael,  Warren Buffet is one of my heroes.  One of the things that has struck me through the most recent economic crisis is the anger, jealousy and even hatred that some people have for people like Mr. Buffet who have made schrewd business decisions that have made them wealthy.  I have studied Mr. Buffet and I'm convinced that he is an honest, ethical man.  I applaud him for being brave and smart enough to amass a fortune.  May we be brave and smart enough to at least survive this market and perhaps even thrive.  Good blog.

Hello Michael,  Warren Buffet is one of my heroes.  One of the things that has struck me through the most recent economic crisis is the anger, jealousy and even hatred that some people have for people like Mr. Buffet who have made schrewd business decisions that have made them wealthy.  I have studied Mr. Buffet and I'm convinced that he is an honest, ethical man.  I applaud him for being brave and smart enough to amass a fortune.  May we be brave and smart enough to at least survive this market and perhaps even thrive.  Good blog.

Good afternoon, Michael, Wow, and I've been searching for the right words.  This is perfect.  Thanks so much, I will have a better tomorrow, I am sure.

Terri Martin (David Kahn and Company)

Buy when they are all selling and sell when they are all buying. The way to make money. Great thoughts Michael.

Gary's comment of "Buy when they are all selling and sell when they are all buying" is a head scratcher.  It makes a person wonder why buyers buy in a "seller's" market, and not in a "buyer's" market.  Hmmm.  Buyers were buying like crazy when the prices were at an all-time high, and are afraid to buy when they are more affordable than they have been in years - especially lakeshore!!!

Good post. The richest guy in the universe did not get that way because he was dumb.

Michael - great post! Buyers today are in the best position ever! In Greater Cleveland prices for very good properties in certain neighborhoods got back to 1999! That will not last long - so smart buyers invest today. You need a lot of cash though to make all these very attractive investments.

Michasel1 I like this post. I will use this concept to tell buyer want to wait. He is the richest man in the world. If he said something then listen.

Excellent post Michael.  I find myself reading much of what Warren is saying these days.  In fact, we are one of the people looking to buy, rather than sell.  Many folks don't realize there were many millinoniares made during the depression, or as a resulf of the depression.  ;)

•:*¨¨*:• Joe & Colleen Lane •:*¨¨*:•

Our ActiveRain Blog: "What Is A Luxury Home"

Charles, I just wish more people understood the huge potential of real estate when common sense principles are applied.

Marian, I also believe Warren Buffett is ethical and honest, and he should be a role model to more people. He is one shrewd cookie.

Terri, Thanks. I know what you mean. It helps when you hear markets and investment advice put in proper perspective.

Gary, We just need to give our clients the right information, resources and tools, so they can make an educated, informed decision. Timing is different for each person.

Darla, It is hard to predict when some people will feel comfortable with the timing. Sometimes they want to wait until others dip their toes in the water first.

Bob and Carolin, That is why I enjoyed reading the article and writing about it.

Svetlana, I know it is true. Cash is king right now. More and more buyers will enter the market as things stabilize more. The really smart ones with cash will start sooner.

Grace, If these concepts are good enough for him, they are good enough for me.

Joe and Colleen, Thanks for your comments. Good luck to being one of those that capitalize on this market. Take care.

Great post!  I love quotes and there are a lot in this post that make a lot of sense.  People who can buy now, should buy now.

Great post on ActiveRain and so creative!

Best wishes to you!

Joyce Logan, Realtor, Real Living HER, Ohio

Jenn and Joyce, Thanks for your comments. Glad you enjoyed the post. Take care.

Thank you for the sage advice from someone who has the results to back it up!  Buffet's wisdom is needed now more than ever.

Norma, you are welcome. I try to find the best teachers to learn from. Buffett is really incredible. I like the fact that if he is not familiar with an industry, he will not invest in it. He just sticks to what he knows. Take care and good luck to you.

I love the last quote, "Be fearful when others are greedy, and be greedy when others are fearful."  It is soooooooooooooooooooooooo TRUE!

Great post you have here.. There is plenty of business out there.. One must be willing to go get it. Wait sinks the ship.

Warren Buffett must be one of the smartest men in history. He needs to be hired by the government!

Amen to Barbara's comment!

I can't predict if housing will go up or down but my sense is we are near the bottom and if you want a great deal now is the time.

Great analogy! Warrent Buffet has certainly been causing quite a stir lately!   Congrats on the  feature also! Keep up the good work!

Warren Buffett does well for himself and others.  It would seem to follow is advice could be good for real estate as well.

"WE SIMPLY ATTEMPT TO BE FEARFUL WHEN OTHERS ARE GREEDY AND TO BE GREEDY ONLY WHEN OTHERS ARE FEARFUL."  (Warren Buffett) 

Yes, it is a great time to buy if you focus on quality.  Quality homes in quality neighborhoods sell in all markets.  I like Buffett's quotes - plus he is an ardent St. Louis' Cardinals fan.

Ok - it is blatant self-promotion - but more Buffetisms can be found at http://activerain.com/blogsview/728818/Just-Ask-Warren-Smart-Investors-are-Buying-Now.

Hi Michael, I too am a fan of Warren Buffet.  He knows investing if anyone does!  I was also struck several months or perhaps a year ago when he complained about our tax structure, saying that he took a survey in his company and found that the lowest paid person in his company paid much more of her pay in taxes than he did, and he felt this wasn't right.  He feels that the regular working person deserves tax breaks, not more tax breaks for the wealthy.  Anyway, I have been trying to convince investors that they are crazy not to be buying up as much property as they can right now.  The recent changes in lending rules have made it a little bit more difficult, but it is worth it.

Michael, that was a great article. Warren Buffett is a man to listen to and follow with sound advice. You did a bang-up job comparing real estate with his quotes.

I was shocked to read,"Miami-Dade there are almost 25,000 condos available for sale of which only about 500 are selling each month. That is more than a four year supply." And I thought it was bad in Sacramento! WOW, that is some supply!

I too, get the question on when is "bottom?"  I always say, by the time anyone tells you that real estate hit the bottom, it will be at least 30 days late. Can't imagine much more of a bottom than what we are experiencing right now, though.  Pretty bottomed out.

You were talking about your prices now being those of 2005 and what I am seeing in some areas here in Sacramento is equivalent to 2003.

I appreciate a well written article. Thank you.

Michael ... you brought up some great points, thank you!  It is also a positive light on the negative events that are happening right now!  pippa

Michael: I frequently remind myself that I started my business at a great time. That's what keeps me going. Thanks for the positive thoughts!

 

Paul

Great post - I also love the quotes. They are so true, the wealthiest people are the ones that do not follow what everyone else is doing. They are risk takers and the risk usually comes when everyone else is fearful and that's when they pay and usually BIG TIME. Thanks for the quotes.

Linda, Quotes can be really inspirational. It is always interesting to see how people make their fortunes. More often than not they take advantage of the dips in the market. In this case, it is a big dip.

Paul, We must think positive. Why focus on the negative when there is always something positive to focis on and be grateful for. We just have to keep our eyes focused on our goals and what inspires us beyond each day.

Pippa, Thanks for your comments. Nice to hear from you.

Gena,Actually, it depends on the area here and in some cases the building. In some areas like Miami Beach, prices are closer to 2005, but in other areas they are closer to 2004. In downtown and midtown Miami, as well as Brickell, there was a lot of overbuilding, so prices there are more downtrodden than other areas where there is less inventory to be absorbed. There are definitely some great buys now.

Susan, I don't think many people really understand the tax code at all. it seems that it was structured to benefit the wealthiest Americans with some little teasers like the Stimulus package to make the middle class think they are being listened to. 

Ryan, Quality always sells well. I will have to check out your post with more Buffettisms. A little self-promotion never hurt anybody!

Tracy, Thanks for the kudos and for stopping by. Take care.

Christine, Terry-thanks for your comments. It seems that Buffett would be a good person to listen to experience and success are a very good combination.

Barbara,It would not have hurt the government to have put Warren Buffett on retainer, although I am not sure if they can afford him.

Roland, I think we all need to be more proactive than reactive. Waiting is not the best business strategy.

Michael, It certainly makes sense to act when others are fearful as long as you enough common sense and the knowledge to know the waters in which you are treading. A little chutzpah does not hurt either.

Great post, a lot of really great material, thank you for this!

 

-Brendan Winans

Brendan, You are welcome to it. I may be looking for some more Buffettisms, so look out for them in my future posts.

 Excellent piece Michael and Mr Buffet is absolutely right. It seems obvious but the stock market/real estate market often logic. People scramble to buy when things are overpriced and panic sell when things are low, this is the worst time to be selling but that's exactly what many are doing.

Thanks for your comments Marti, It is a shame that many people do not follow logic when investing in real estate or stocks. When you follow your emotions, that is when the trouble begins. Easier said than done though.

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