Collapse, Meltdown, what’s next?

Morning Folks!!

Starting early last year I started writing about what I saw coming. I had
already started to prepare. I started seeing the unraveling in the spring of
2007. I said nothing at that point. I quietly started to prepare. I am a numbers
guy. I saw numbers that were impossible to work. I also enjoy real estate as a
hobby. The first tip was when I saw prices rise from $300/sq. ft to $1200/sq. ft
and as high as $2000. In some cities that is the going rate. Not in South
Florida. The first BIG clue was when the numbers went from $300 to $1200 without
stopping at $500, $700, $900, $1100. That showed me that this was unsustainable.
Something had to give. A collapse was in the making.

Then add to that I was seeing people making $75k/year buying homes for
$350k-$500k. It's mathematically impossible. Everyone would have to be pretty
damn optimistic to swallow that one. I am a numbers guy. To me it was just a
matter of time. The outcome had already been determined. Now we were just filling in the chapters.

What I did not know at that point was the entire system was corrupt and
broken. I knew the ending without even the most important pierces to come. But
it was August 2007 that I began to prepare. I never shared my concerns until
last summer. Even then folks I knew were skeptical that it could get this bad
and it will undoubtedly get worse.

You say 'It's not that bad' and you are right. The storm has yet to hit.
The fallout has yet to hit. The result of 5 million jobs lost so far has yet to
hit. The rents that won't be coming in from Circuit City and Linen and Things
and dozens of others is yet to hit. So much of this is yet to hit. Much of the
pain could be avoided but good decisions must be made and I see no evidence of
that. The confidence level is lower than at any point in my lifetime. There is
no confidence whatsoever and the stock market is about numbers and the numbers
never lie, people do. You should have seen the look at some of the faces when
the market was at 14000 and my out of pocket line was '14000 on the way to
7500.' They never liked when I would say that. But that was what I saw based on
the numbers and I still underestimated what was to come.

So as I saw this years out I began to prepare and am still preparing. It
won't be easy to stay ahead of this monster. You will have to be agile and you
will have to be quick and you will have to do a lot of things you may not
normally do. That really brings me to the subject of this post. I am embracing
this meltdown because I have been preparing and I have a strategy to come out of
it in a stronger way than when I came into it. I am a recession fan!! I LOVE
recessions! I love meltdowns! I love what we are going through. What I hate is
the interference that is going to make it much worse and much longer.

One thing will determine whether I succeed or fail. It comes to that every
time......TIMING! So I feel pretty good about how to ride this wave out. But I
will respect that the energy of this collapse and meltdown is bigger and
stronger than any of us. Never has so much been lost so quickly. Never ever. On
the other hand, coming out of this....never will so much been made so quickly.
Point is there is opportunity coming at every corner and if you know how to spot
opportunity, if you know how to seize opportunity, if you know how to recognize
opportunity, if you know how to time and play opportunity, then great times are
ahead. .
Patience will be key. The next few weeks until tax time may be brutal.
Then I believe we will see a big pop followed by the worst part of this storm.

The damage being done every day can not be minimized. It is long term and
may get completely out of control. If it gets out of control then it is time for
'Plan B.' What is 'Plan B?' It's the plan just before 'Plan C.'
Cash and income producing domains are the two safest things I can think of having. Then gold, but gold has too many risks for me....what a great time to be in the domain business. What a great time to fortify your portfolio. It may be the last chance.

Have a GREAT day!

Rick Schwartz