I spend less time reading and watch less and less television each and every year the last 10 years.
I spend more and more of my WORK time on the web.
I don’t play ANYTHING on the web. I do play Scrabble, Monopoly, Risk, UNO, Rummikub, but have yet to invite a high school friend from Facebook or a twitter follower into the game.
The internet is working. My discovery abilities have gotten better and my filtering capabilities have taken on greater importance. I can focus, learn and move on.
As well as the internet works, it helps to walk around and ask questions. I had perfect weather in New York last week, so I walked quite a bit, asked hundreds of questions of merchants and salespeople and had a chance to really think about what I was hearing.
I see unsustainable spending for goods. The prices for our clothes and electronics continues to drop to unsustainable levels. Go check out an H&M. Kids can rewardrobe in a semi-stylish way each and every month. There are no margins. We are continuing to buy, because the prices are insane.
Foreigners can RENT the best of the best from our glut of real estate. That will go on a long time. It’s so damn cheap. Nobody is committing to anything. Sellers are still hanging on and buyers know this. Even the real estate agents have caught on…the real estate agents!
Americans should and will do the same…rent with their depreciating dollars.
There is very little pricing power left. Sure, a painting can sell for some ungodly amount and the ‘talking heads’ can chatter on about what this means, but that is noise and a meaningless data point vs. walking the streets.
The have’s will have more (Apple, Amazon, Google, Goldman Sachs, even Twitter) and the have not’s will have less.
Watching the stock market as this unfolds may be the best trick the media and government have played on the consumer of all time.
It’s a fantastic STOCK market rally and well played out in the media, but the distribution returns are extremely skewed to the few. If you are buying US government bonds, you are a lazy crackhead. If you are buying homes, I think you are spending your money in a dumb manner.
Stay light and mobile, hoard cash and pay as little as you can for goods and assets when you have to spend. Control the urges because we are in a marathon.
Howard,
You sound just like me!!! I began in ’05 fearing that we were in an unsustainable DEBT bubble and of course we are and will be enduring this for years to come…
I fear we may be entering another debt/credit bubble within a larger debt/credit. bubble that has not been resolved. Would appreciate your thoughts…
Also, liked your comment: “If you are buying homes, I think you are spending your money in a dumb manner.”
Of course the housing #’s are skewed to those using Uncle Sugar’s (housing credit) largess to buy homes and those SPECUALTORS purchasing foreclosures hoping to flip for a profit…
Thanks again for a great article!
Howard,
You sound just like me!!! I began in '05 fearing that we were in an unsustainable DEBT bubble and of course we are and will be enduring this for years to come…
I fear we may be entering another debt/credit bubble within a larger debt/credit. bubble that has not been resolved. Would appreciate your thoughts…
Also, liked your comment: “If you are buying homes, I think you are spending your money in a dumb manner.”
Of course the housing #'s are skewed to those using Uncle Sugar's (housing credit) largess to buy homes and those SPECUALTORS purchasing foreclosures hoping to flip for a profit…
Thanks again for a great article!
sticking with my apple gold and amazon and a little baidu but i know theses
prices are unsustainable.
also continue to loook at early stage as prices stay very low.
Thanks for walking and talkin' to business people on the street. Your point on renting is a good one–I've discussed and advised some friends to do this, but what I've found, is that to many, the connotation of renting and not owning is so overwhelmingly negative, that they simply aren't willing to act on the advice. But I'm with you, the smart play is to take advantage of excess real estate inventory and shedding the rising property tax burden that most home owners are shouldering.
Light and mobile, good advice-and on the stock market, the big question is how long will the “trick” last? No one knows of course, but my concern is if there is a another big leg down in the next quarter or two, we'll experience more than just a W-shaped recession. There is simply too much unsustainability across multiple dimensions of the economy in my opinion.
I hear you – but ‘hoard cash’? Not sure whether that is the right strategy for the coming years to preserve value.
I hear you – but 'hoard cash'? Not sure whether that is the right strategy for the coming years to preserve value.
If the RE agents caught on maybe it's time to fade that.
That's assuming liquidity, of which there is none.
Great question. Will do a post
Me too
Phil, I can to echo your anecdotal evidence of the psychological hang-ups people have re renting vs. buying. Even for friends of mine, for whom “frugality is the new black”, the mere thought of becoming a renter is a non-starter. For them, renting is the equivalent of telling people that you're not “qualified” to be a homeowner.
I've tried numerous times to show friends the math/logic behind renting versus buying in this market. But it's almost like they're willing to lose a substantial amount of money every month (for a couple years) to avoid the social stigma.
I'm on board with everything Howard has laid out in this post and his last line is the perfect closing: “Stay light and mobile, hoard cash and pay as little as you can for goods and assets when you have to spend. Control the urges because we are in a marathon.”
for those that cant heed the lifestyle of my closing, it's their double
loss.
first off, the best part of our freedom is the mobility and how inexpensive
travel and leisure has become. so if you are stuck in the you must own set,
your ego controls you and you are a sucker like all the rest.
makes sucess that much easier that everyone else is tied to things…thank
goodness.
Howard what would turn you from a renter to buyer? I know you were once a buyer if I recall earlier posts (talking real estate)
p.s. lucky you can always easily convert your US pesos to Candian loonies very easily ;)
Thanks for walking and talkin’ to business people on the street. Your point on renting is a good one–I’ve discussed and advised some friends to do this, but what I’ve found, is that to many, the connotation of renting and not owning is so overwhelmingly negative, that they simply aren’t willing to act on the advice. But I’m with you, the smart play is to take advantage of excess real estate inventory and shedding the rising property tax burden that most home owners are shouldering.
Light and mobile, good advice-and on the stock market, the big question is how long will the “trick” last? No one knows of course, but my concern is if there is a another big leg down in the next quarter or two, we’ll experience more than just a W-shaped recession. There is simply too much unsustainability across multiple dimensions of the economy in my opinion.
sticking with my apple gold and amazon and a little baidu but i know theses
prices are unsustainable.
also continue to loook at early stage as prices stay very low.
Howard what would turn you from a renter to buyer? I know you were once a buyer if I recall earlier posts (talking real estate)
p.s. lucky you can always easily convert your US pesos to Candian loonies very easily ;)
Great question. Will do a post
I only bring my greatest of questions to HowardLindzon.com
When I have a very average question, I take that to ibankcoin.com ;)
Me too
i am always willing to buy if the price is right and I have enough cash in the bank for one to two years of living.
renting in california i am seeing that the math may not make sense for a long time with oproperty taxes. i rented until i was 30 and I am happy to be renting now at 44. it is total freedom. my money is hard earned and most of the time loosely spent and invested with hard work. i dont need a shrine to those things. I need a bed and room for the d=family. NO ONE asks me whether I rent or buy. If they do, they know the numbers themselves and if they are smart, know that I am smart.
Phil, I can to echo your anecdotal evidence of the psychological hang-ups people have re renting vs. buying. Even for friends of mine, for whom “frugality is the new black”, the mere thought of becoming a renter is a non-starter. For them, renting is the equivalent of telling people that you’re not “qualified” to be a homeowner.
I’ve tried numerous times to show friends the math/logic behind renting versus buying in this market. But it’s almost like they’re willing to lose a substantial amount of money every month (for a couple years) to avoid the social stigma.
I’m on board with everything Howard has laid out in this post and his last line is the perfect closing: “Stay light and mobile, hoard cash and pay as little as you can for goods and assets when you have to spend. Control the urges because we are in a marathon.”
for those that cant heed the lifestyle of my closing, it’s their double
loss.
first off, the best part of our freedom is the mobility and how inexpensive
travel and leisure has become. so if you are stuck in the you must own set,
your ego controls you and you are a sucker like all the rest.
makes sucess that much easier that everyone else is tied to things…thank
goodness.
True Dat!
I only bring my greatest of questions to HowardLindzon.com
When I have a very average question, I take that to ibankcoin.com ;)
True Dat!
If the RE agents caught on maybe it’s time to fade that.
That’s assuming liquidity, of which there is none.
i am always willing to buy if the price is right and I have enough cash in the bank for one to two years of living.
renting in california i am seeing that the math may not make sense for a long time with oproperty taxes. i rented until i was 30 and I am happy to be renting now at 44. it is total freedom. my money is hard earned and most of the time loosely spent and invested with hard work. i dont need a shrine to those things. I need a bed and room for the d=family. NO ONE asks me whether I rent or buy. If they do, they know the numbers themselves and if they are smart, know that I am smart.
Great post, and I agree. I find I’m trying not to buy, and as much as that goes against my capitalistic heart, I can’t help but be upset by the higher prices for food and goods. Stuff should be cheaper.
I buy the basics, and wait for lower prices. Will price declines be bad for business? Economists say deflation is bad, but I find myself hoping for deflation.
NYT published an article about ‘Black Friday’, interesting for the comments generated. Every commenter waxed negative about commerce, about consumerism. At least one commenter went as far as to imply: “If you won’t give us our jobs back, why should we buy?”.
People seemed plain angry.
Great post, and I agree. I find I'm trying not to buy, and as much as that goes against my capitalistic heart, I can't help but be upset by the higher prices for food and goods. Stuff should be cheaper.
I buy the basics, and wait for lower prices. Will price declines be bad for business? Economists say deflation is bad, but I find myself hoping for deflation.
NYT published an article about 'Black Friday', interesting for the comments generated. Every commenter waxed negative about commerce, about consumerism. At least one commenter went as far as to imply: “If you won't give us our jobs back, why should we buy?”.
People seemed plain angry.
Couldn’t help but give props to the street walking/learning you did last week. The reality check of people outside the social tech bubble is priceless. On the flip side virtual goods are creeping up all around us. At Thanksgiving I was introduced to a game I had read about with much interest, Farmville. It’s amazing how much short term capital a simple social game can extract from society. The wealth it’s creating is entertainment, we’ll see if it’s exportable.What was the feeling from the merchants you spoke to? Are they seeing a positive sustained shift?
Its just slow and scary out thete
Couldn't help but give props to the street walking/learning you did last week. The reality check of people outside the social tech bubble is priceless.
On the flip side virtual goods are creeping up all around us. At Thanksgiving I was introduced to a game I had read about with much interest, Farmville. It's amazing how much short term capital a simple social game can extract from society. The wealth it's creating is entertainment, we'll see if it's exportable.
What was the feeling from the merchants you spoke to? Are they seeing a positive sustained shift?
Its just slow and scary out thete
Couldn't help but give props to the street walking/learning you did last week. The reality check of people outside the social tech bubble is priceless.
On the flip side virtual goods are creeping up all around us. At Thanksgiving I was introduced to a game I had read about with much interest, Farmville. It's amazing how much short term capital a simple social game can extract from society. The wealth it's creating is entertainment, we'll see if it's exportable.
What was the feeling from the merchants you spoke to? Are they seeing a positive sustained shift?
Its just slow and scary out thete