Archive for August, 2009
Back in April I announced that we were forming a brokerage to help people buy and sell homes. Some of the comments were less than enthusiastic. Despite the few naysayers, we believe there is a need for the service we provide, so we have been working over the last few months to ready ourselves to take on this task. In September I am going to present a series of introductory posts describing how we will operate. I chose the song Take it Easy this morning because we want to provide peace-of-mind with the process. Part of making people be at ease is providing accurate information so people can make informed decisions. To that end, we have developed proprietary Property Valuation Reports for the IHB community based on the principles I have been writing about for the last few years. I would like[READ MORE]
Psychological Stages of a BubbleOnce a bubble starts to form, it will go through several identifiable stages: enthusiasm, greed, denial, fear, capitulation, and despair. Each of these stages is characterized by different speculator emotional states and different resulting behaviors. There are outside forces that also act on the market in predictable ways in each one of these stages. Most often, these outside factors serve to reinforce the market's herd behavior and exacerbate changes in price.
Precipitating FactorThere is often a precipitating factor causing the initial price rally that pushes prices above their supported fundamental values. A bubble rally is usually kicked off by some exogenous event, but it may occur simply because prices have been rising and investors take notice, or it can be merely the result of a lack of investor fear and the widespread belief prices cannot go down. In a typical market, there is a significant selloff when[READ MORE]
I have been noticing a great deal of bullishness during this spring rally, and I was planning a post to put things in perspective, but Rich beat me to it. His analysis was so well done, that I want to acknowledge it here and add my own comments.
As you can see, the[READ MORE]
I drive a convertible; I rarely put the top up. When my family makes weekend plans, we don't worry about the weather. The climate in Coastal California is nearly perfect, and I enjoy it every day. The narrow coastal band of properties in California have a unique and very high quality climate.