Good Advice

From Mark Cuban, love him or hate him, you have to respect his business acumen. Here’s his take on what to do with your money now:

There is SO MUCH CAPITAL available at so little cost to so many that the timeline from innovator to idiot is measured in days, hours and probably even milliseconds. The guys who are actually smart and uncover new opportunities can’t even get in a position large enough to make it worth their while before the imitators and then idiots pile in right behind them.

. . .

Baron Rothschild said “the time to buy is when there is blood in the streets”, Warren Buffet said it differently when he said ” you pay a very high price in the stock market for a cheery consensus”

This is the time to start saving for a “bloody day”. There will be a time when capital regains its scarcity. When it becomes more expensive. When it does , what do you want to have in as great an amount as possible ? Capital.

So save your money. Pay off your credit cards. Put your money in the bank where it is insured. Be patient.

Cuban’s right that there will be a time when capital regains its scarcity, and in real estate that time is rapidly coming. Remember my post from yesterday?

Take a look at this post from the WSJ Developments Blog about a recent purchase by John Paulson. You may not know about Mr. Paulson, but click on the link on his name. He’s most famous for making literally $5 billion in 2007-2009 by betting against the housing market.

Well, he’s coming back in. And note this comment:

Wall Street money has recognized land as a potentially valuable asset class, and private equity and hedge fund investors are bidding against home builders–traditionally the biggest buyers of undeveloped lots–for valuable properties.

Where are they buying? At auction from already failed banks. There’s still a reckoning coming and there is still opportunity out there. The little guy, as I said yesterday, may have to work a little harder to unearth the single deal that makes sense for them, but they are and will be there as the banks take Mr. Ferguson’s advice I noted yesterday.