Comments on Fund My Mutual Fund: Bankrate.com: Average Joe Still Can't Afford a Hom...

You got itNo matter the eraNo matter the asset cla...

2008-04-27T17:11:00.000-04:00

You got it

No matter the era
No matter the asset class
Fear and greed rule

Read up tulips in Holland in 1600s some day. Same herd behavior.

Humans never change. Only the things they are chasing do. This is why as important as fundamentals are, and technicals are, I really believe psychology is important to understand for any "shorter term" oriented investor. If you plan to hold something for 10 years, than its just white noise. But we could be through 2 new bubbles in 10 years ;)

I'm with you. The people who made bad decisions s...

2008-04-27T16:02:00.000-04:00

I'm with you. The people who made bad decisions should pay. Like you said though, the consumer in this country has a very poor financial education for the most part. I think if we do end up with any legislation it should be aimed at 2 areas.

1) Prior to signing any home sized (and probably car too) loan, a signer should be required to take a basic 4-8 hour course on finance. If you can't afford the few hundred dollars for a course then you shouldn't be borrowing 200k+.

2) Additional loan documentation. I want to see some bullet points at the bottom of the loan doc with some what-if scenarios. If rates go up, this is what your payment will do. If they go down, this is what they do. Stuff like that.

Anyways, I haven't had to say I told you so to her. She has said multiple times she should have listened to logic. Greed/money just has a way to get people to throw logic completely out the window. It's like it's part of the human condition.

shax,better than a sharp stick to the eyehttp://ti...

2008-04-27T15:04:00.000-04:00

shax,

better than a sharp stick to the eye

http://tinyurl.com/5pq8d3

It's part of my Kool Aid trade - when people believe in early cycle these are part of the group they go to. Further if you read the Foreclosure Relief Act it is essentially a tax break to keep homebuilders going. I think the idea is make sure corporate homebuilders win, and small and local homebuilders go out of business - more money for the corporate homebuilders. Works in farming, works in every business in America.

http://tinyurl.com/5edjaj

Michael, we cannot legislate bad decisions; look I bought a lot of tech stocks at the peak and suffered. No one came to bail me out. I take responsibility, I lose money, I had to restart and it was a lesson never forgotten. The problem is we have a lack of financial education in this country and we are told "let the free market sold everything" - well that works when the consumer is as educated as those on the other side of the ledger. For the great many in America that is not the case so they consistently make bad decisions. At least she does have a good job that pays better than probably 80% of jobs in America. There are a lot of people in same shoes working for 2/3 the pay and no OT. So it is all relative.

I have a friend who is an RN, who purchased a refi...

2008-04-27T13:52:00.000-04:00

I have a friend who is an RN, who purchased a refitted apt. with an IO loan right at the peak. I strongly urged her not to, but all her other friends were telling if she didn't buy something then she would never be able to. Now she's working OT and graveyard shifts in order to get the shift diff just so she can afford her place. Keep in mind her 'condo' was a $500/month apt. just 5-6 years ago :(

I see DHI and LEN in your fund? How are they going...

2008-04-27T03:25:00.000-04:00

I see DHI and LEN in your fund? How are they going to make a profit in this market?