09 -- Not Good

Kid: Where have you been Homer?

Homer: Why?

Kid: Are you kidding, all hell broke lose this past year and it’s the year you decide to take off! I’ve lost my shirt. My equity is down 50%; I’m selling into free falls. Everyone from the President to the new guy is telling me not to worry – just hold on, things will be better AND, they keep getting worse. I’ve tried to write a new mortgage on my house and I find it is worth less than it was a year ago by at least 20% and IT is still going down in value.

What the heck is going on Homer?

Homer: Well, I can’t say it is good to be back but to answer your question; the markets are going through a correction.

Kid: Whoop dee doo! I know that. What am I supposed to do? I am beside myself. You always know what to do!

Homer: But, you never follow my advice.

Kid: I promise, I WILL listen!

Homer: That’s a start; I guess I can’t ask for more.

Kid: So, so?

Homer: Hold your horses. I have a couple of questions for you.

Kid: Yes?

Homer: Are you willing to take a loss?

Kid: I already have. My stock positions are showing losses up to 50% or more.

Homer: Then you have no loss. The loss is when and if you sell. Right now it is just a paper loss.

Kid: OK, I get it but what do I do Homer? How do I salvage anything here?

Homer: Do you have cash? I mean cash to invest right now?

Kid: No.

Homer: OK. Is there anything in your portfolio you can’t live without?

Kid: No.

Homer: Are any of the stock positions you own among the top 10 performers for all of 2008?

Kid: No.

Homer: Do you have any inside information on any of the stocks you are currently holding like if they have an announcement that will drive the stock up or some incredible news no one knows about?

Kid: That’s illegal.

Homer: Yes, I know. I had to check to make sure you were not heading to jail.

Kid: So, what do I do Homer?

Homer: Sell everything.

Kid: What?

Homer: You heard me, sell everything.

Kid: Why?

Homer: Because cash is KING. And that’s the way it is right now.

Kid: You mean take a loss?

Homer: If that’s what it takes to get you liquid, yes.

Kid: Why do you say that?

Homer: Because in two years, 2010, the baby boomers will have all hit the Social Security rolls and unless Obama has a couple of secrets up his sleeve that nobody knows about, the America economy will be in the throws of another recession following the one we are already in.

Kid: Are you kidding? This can’t happen.

Homer: Yes it can. I saw it once before. It can and will happen unless get off your duff and start doing something about it.

Kid: What do you mean?

Homer: Every time the government comes in to rescue the economy rather then let it sort itself out as it is doing now, they prolong and deepen the inevitable. What goes up historically always comes down and to presume that Big Government can fix it all is the most arrogant of stupid conclusions ever hoisted over and on the public. The government can’t fix anything let alone the economy. They don’t know how to manage and most elected reps in government have never had to put in a hard days work in their lives and most have not lived long enough to know about sacrifice.

Kid, our government is corrupt and becoming more so. The longer we permit them to stay in power, the more beholding they become to special interests. And you and the rest of your soft buddies are so scared now, you will lose something, you are letting them tell you what to do and how to do it. Short of turning the whole place upside down in the next two elections, we’re in for some pretty hard times. As I said, cash is King.

Kid: How long will this last.

Homer: Until the next war or until you throw every one of those in office out of office and get people in office who care about you and not them.

Kid: Oh my God!

Homer: Sorry kid. Those of us too stupid to see the lessons of the past are bound to repeat them.

Kid: So how do I protect my family financially from this debacle?

Homer: Buy hard assets.

Kid: Hard assets?

Homer: Yes. Buy gold, silver, diamonds, other precious metals and gems.

Kid: How?

Homer: The easiest way is to invest in the companies that mine it, deal in them or distribute them.

Kid: Should I buy anything in the market other than precious metals?

Homer: You have lots of choices. One field that re-ignites in a recession is education. It doesn’t take a rocket scientist to figure out why. And Kid, just stop being afraid to trade.

Kid: What else?

Homer: You have exhausted me Kid, we're through for the day.

Kid: One more question.

Homer: Yes.

Kid: What about oil?

Homer: Unless we start drilling for our own, the Middle East cartel has us. The price will go up again. Start thinking in terms of $5.00 a gallon not $4.00 and think that our own government wants the price to go up so that we get off the oil kick and go green. It’s kind of like what I refer to as biting ones elbow to spite their face. Is this not brilliantly stupid?

See you later Kid.

Kid: But, I’m not through…

Homer: I am.

Oil, Oil, Oil

Dear Homer, Hope this finds you well. I was struck by the ongoing ups and downs in gas prices and wondering when we were going to get out of these price gyrations. I know, you'd probably say "never". But a guy like me is scared to death to invest in oil stocks. I just think it is plain unAmerican, particularly with all that's going on in the Middle East.

Hi Kid, Hope you are enjoying the leisure life in "The Villages". I heard golf is 'free for life'. You and Sarah must be in heaven.

I have no idea why you're so 'hung up' on oil when all you do is putt-putt around all day in an electric golf cart! Well, to each his own, I say.

Here's some info you should probably know since you, as usual, are way out in 'left' field on this one. I don't mean that politically Kid since I know your politics. I mean it from the stand point that you still don't know what you're talking about. It's not the Arabs the world has to fear when it comes to controlling the world's oil reserves, it's us Kid. America controls the largest hoard of unused oil reserves in the world - about 72% of it, give or take a percentage or two. Woke you up with that one didn't I?

Here's the facts.

One thousand feet below the surface in the States of Colorado, Wyoming and Utah in what is referred to as the Green River Formation lies the greatest oil reserve in the world. How much? Well Kid, would you believe more than 2 TRILLION barrels. In August 2005 President Bush had the guts to finally order its extraction. Three companies have been chosen to lead the way.

How does this shake up the world's so called 'balance of oil'? One thing is for certain it would make the United States the largest producer of oil in the world with the world largest oil supply in reserve. When I tell people we have enough oil beneath the ground to last us for 500 years at anticipated rates of consumption they fall over in disbelief. But that is what is estimated. Not by me, but by the experts.

This oil is locked up in shale. The oil in the shale in the Green River Basin is so rich that when oil makes and sustains $50 plus a barrel it becomes economically feasible to produce. With the price of a barrel of oil recently breaking through the $70 per barrel price barrier before it dropped back, we can conclude one thing. As China and India and the rest of the developing world thirsts for oil the current consumption of oil reserves of the liquid kind will evaporate faster than anyone estimated. Mass production of oil shale in the USA cannot be far behind.

Oil has been called Black Gold for as long as I can remember. The following, I believe, amply demonstrates why.

• One ton of oil shale produces a barrel of oil. That's worth a little over $55 a barrel on today's market. It is almost four times more profitable than gold that only extracts about $15 of gold per ton. This isn't NEW math. This is the bottom line.
• Oil shale when heated, oozes oil and American shale is more productive per ton than any known deposit from any other country in the world.

But the real story is how much untapped oil shale lies beneath U.S. soil? Kid, I'm proud to say there is four-times more oil shale in the U.S. than in all other countries combined.

Shale oil has been a secret source of a handful of nations blessed with an abundance. But, as noted, the US has more than all of them combined. When we add up all the known oil reserves in the world, including the liquid variety, the, good ole' USA holds almost 3/4's of the world's oil supply. That Kid, as I have often reminded you on other occassions, is something you can take to the bank.

So, Kid, the moral to this story is simple. Check out the government approved oil shale producers and latch onto one. It makes no difference which one, for they all will make their shareholders a fortune. It shouldn't be a hard choice, now should it?

Enjoy your golf game!

Your Pal, Homer

Making It

Dateline: December 10, 2006

Homer Comments on Paying for Market Advise

Kid: Hi Homer

Homer: Hi Kid, where ya' going.

Kid: We're moving to a place called "The Villages".

Homer: That's in Central Florida, right?

Kid: Right.

Homer: I'm going to miss you even though you never followed my advise.

Kid: what are you going to do.

Homer: Write a BLOG. I think somebody out there might pay attention, save themselves some grief and make some wise choices.

Kid: What a concept!

Homer: I think so. That way I can get straight to the point, not waste a lot of time and then folks can do what they want, when they want.

Kid: How much?

Homer: Free

Kid: Are you kidding me? You could make a fortune charging for your advise.

Homer: So I've been told. I also know there are a lot of folks who can't afford high priced investment letters and those that do, well, they need a pacifier for all their stupid mistakes.

Kid: Man, you sure call it the way you see it. I've paid thousands for investment letters and I can't say that I have ever received advise that someone else had not traded on first. I always seemed to be the last one in the door.

Homer: That's because you were. The real money on the fast trades and roll-overs was already made by the time you got the information. These guys, at least most, I believe, are slicker than grease when it comes to edging out the inside before you get in from the outside.

Kid: Huh?

Homer: Never mind, I just think you're wasting your money buying these things.

Kid: Free! I can't believe it. When are you starting?

Now. I just gave you something that you should take to the bank. Don't pay for advise that you can get for free, don't buy something because somebody else tells you its a "secret" and never, ever buy from somebody that says its a sure thing. The best odds you are ever going to get in the stock market are 50/50 and that you really can take to the bank.

Kid: I'm looking forward to your next go at this.

Homer: Me too.

Kid: Have any idea how often you will feed some Hot info?

Homer: When the spirit moves me Kid, when the spirit moves me!

Kid: I hope its often.

Homer: Take care Kid, we'll miss ya.

Bankruptcy Blues or Bankruptcy Rainbows

Dateline: August 30, 2006

Kid: Hi Homer!

Homer: Hi Kid.

Kid: Homer, I hear Billionaires like Donald Trump, Ross Perot and a whole lot of others have used a bankruptcy, or several for that matter to get ahead. How is that possible when Dick and Jane down the street filed bankruptcy and they ended up robbing motels, grocery stores and anything and anyone to get ahead because they could not borrow a dime, get a car, or mortgage a house? Can you explain how it is possible for one and not the other to use bankruptcy successfully?

Homer: Wasn't that a movie Kid? Forget it. Are you planning on doing this yourself, I mean filing bankruptcy?

Kid: Well, we may have to Homer. Since I always do the opposite of what you tell me, it seems I am destined to end up paying the piper. This time Sarah and I may have hit rock bottom. I'm really skittish about getting into the federal bankruptcy court system and having to carry all the baggage. I hear the embarrassment is just unreal that goes with it. You know the "Oh, you filed bankruptcy?" or the "I saw your name on the Internet and you declared bankruptcy didn't you?" All that possibility just nauseates me no end to think of what people might say and whether I can ever work again with the stigma generated.

Homer: What do you care what they say? And as for stigma, an employer cannot deny you a job because you file bankruptcy. It is one thing to file and quite another to follow it through. An awful lot of people don't know the difference and it is a clear and unmistakable invasion of privacy for some one to use the public records to keep you from a job when you have committed no crime. Can you imagine someone saying that to Donald Trump? They're not walking in your shoes.

OK Kid, I can see you are in a muddle over this and the last thing I want you to do is something stupid. I assume your creditors are hounding you to death night and day, right?

Kid: Uh huh.

Homer: And it is driving Sarah crazy?

Kid: Uh huh.

Homer: And you do not know exactly what to do, but you read bankruptcy can spare you a lot of pain?

Kid: Uh huh.

Homer: What you have got to get hold of is that bankruptcy is no embarrassment. It's a viable tool for financial survival. Regardless of what anybody says, it can and will help you. The bankruptcy laws were written initially by a caring Congress from bygone years, if you can imagine that, who knew that companies and creditors were beating the public to death with debt, literally. They can work themselves up into a feeding frenzy and they are not kind to people they perceive are falling behind. They will do whatever it takes to get money from folks who don't have it and they relentlessly pursue them even though they are, in fact, the ones responsible for the debt in the first place.

Kid: What do you mean by that?

Homer: Have you not always been encouraged to spend and do more on tomorrow's income? Everybody is Kid. That's the nature of a consumer driven economy from the mind of the credit card companies and lenders.

Kid: Come to think of it, I get a new credit card offer ever week and the mortgage guys are unrelenting trying to get me to refinance my house so I can borrow more and have more money.

Homer: By the banks giving you easy credit, permitting people to purchase houses and cars over their heads and grown-up toys like boats and second homes, finds people with debt they can not afford nor can they make payments on easily. Now, should you happen to make the minimal payments each month, the creditors will raise your credit limit without ever checking to see if you can afford it.

What unbelievable stupid logic. In effect Kid, you and millions upon millions of others become credit junkies, addicted to spending what you don't have and spending more and more of it. People find themselves living to the maximum of their incomes plus. The "plus" is what does one in every time. What you have to do is knock off the buying frenzy and find a way out of what is essentially credit jail.

Now there are a lot of so-called experts that tell you that filing a bankruptcy is the last thing you want to do. Well, it is for them. As soon as you file, you do not need their services anymore. Most of them just want to put their hands in your pockets but you close the gate when you file bankruptcy and they come up empty. Who are these guys? Credit counselors and so-called non-profit organizations that are anything but non-profit even though they say they are. They take it out in fat salaries and bury the profits in expenses. The new bankruptcy laws enacted this year demand that you must see one of the court approved counseling firms before your bankruptcy will even be considered. But, don't despair, you can get past this, and if at first you don't succeed, you can try, try, again until you do.

The down and dirty way to file a bankruptcy is to file in what is referred to as pro se. This means you and Sarah act as your own lawyers. Even the trustees of the Federal Bankruptcy Court will tell you to get a lawyer even though the law was written so that you could file on your own. Again, I find it a kind of a self-serving thing for the legal profession to take care of one another. What's incredible is that filing fees and legal fees can be paid over time. There is no end to this buy now, pay later, mentality.But, let me go back to your question about a guy like Trump, or some other allegedly super-wealthy person who may file bankruptcy. Why would they do it? Why would they even consider it? And, does not the stigma of bankruptcy haunt them too?

You have to understand they are not filing bankruptcy the way you think of it. They are doing it to save their businesses and reorganize and will use the bankruptcy laws to do it. And what about the so-called stigma? For the biz types there is none, or at least they don't consider that there is much of one. They look upon bankruptcy proceedings as a prudent business decision. It’s an economic strategy Kid and it works - it works very well. What they see is freedom from debt not stigma. What they see is a way to carry on, to build, grow, and keep on going.

Once under the protection of the Federal Bankruptcy Court, an individual, a family, or a business, is free from debt servicing and that means they don't have to pay on any claimed debt until the Federal Court decides when and how much. This gives them freedom from the banks and creditors hounding them night and day and freedom from government agencies like the IRS and others who will not take their foot off anyone, not even the Trump's of this world, except when ordered by a higher authority. In this case the Bankruptcy Court is that authority.Bankruptcy, even the threat of bankruptcy, whether you're the biggest company in the world, a startup entrepreneur, or an individual like yourself Kid, will stop any creditor, including the IRS, dead in their tracks.

Before you go down this road you should consider two other things. Can you restructure your debt and if so, renegotiate your payments with your creditors? If you can, then try. The reason I suggest you negotiate first with your creditors is that they are often willing to take a half, a third, a quarter and even less a loaf if they can keep you from filing bankruptcy. Some money from you in their eyes is better than nothing, right? What you have to do is be cool and when they say they will sue, you let them know you are holding off filing personal bankruptcy to permit you to negotiate with them a workable solution. The workable solution in your mind is X dollars per month, per couple of months, etc. You will find that virtually 100% of the time they will work with you. They absolutely do not want you to file bankruptcy.

Also you want to consider this Kid. You can file and not follow through. I suggest this tactic only if you have a business to protect. Murphy’s Law always plays out here. A new venture, like anything else, always seems to take longer than we think to get off the ground. It exhausts resources, and time and effort are chewed up to get the new enterprise off the ground and running successfully. One can keep the creditors at bay for a little longer and avoid folding the business and continue building it by filing for bankruptcy. However, once you file you can cancel it at any time.

The good news is it may take months for your creditors to find out and as far as the Federal Bankruptcy Court is concerned, it is as if you never filed at all. So guess what?

Kid: What?

Homer: You can do it over, and over again.

Kid: No way! You're kidding right?

Homer: When you withdraw or let the bankruptcy file lapse because you did not follow through with credit counseling or did not show up for a meeting with the trustee, you can start the process over again. The whole process, at least in the mind of the Bankruptcy Court, is as though you never filed at all.

Now this may make your creditors madder than a disturbed hornets nest but if you have not worked out of your situation and you need more time, you can file again.

Kid: Wow!

Homer: Yep, it’s a wow - the bankruptcy rainbow. Remember for businesses, it’s an economic strategy. You 'trump' the creditors.If you decide to go ahead Kid, and find the chapter that suits you and file under it. You can start off with Chapter 13, which is the only one that requires a debt reconciliation plan for individual filers, or you can go straight to Chapter 7. This Chapter permits you to file and declare unlimited debt for any amount against any creditor including the IRS. Chapters 10 and 11 are special and suited for more specific goals than just the individual debtor. Either way, they all accomplish the same thing, stopping creditors.

Kid: Which one should I look at Homer?

Homer: If you were really serious Kid, I would buy, beg, or borrow a copy of Guerilla Entrepreneurship: The Original, How to Start & Succeed in a New Venture. It's coming out in late September and it has a chapter specifically devoted to how any entrepreneur can use Bankruptcy as a strategy to save their business and grow, just like the big guys.

Kid: Tell me more!

Homer: Nope. Read the book. And by the way, about Dick and Jane --

Kid: Yeah--

Homer: If I remember correctly, we don't have neighbors down the street named Dick and Jane, do we? It was a movie if I recall, and they did just fine in the end - they never filed.

Kid: You got me!

Net Preneuring: The 21st Century's Gold Rush

Dateline: July 28, 2006

KID: You gonna tell me what you promised me last time?

Homer: Yep. Sit down and listen, I'm about to tell you about the Internet.

KID: What in heavens name could you possibly know about the Internet.

Homer: I spell it o p p o r t u n i ty! So pay attention I am only going to say this once.

Whether you're an old timer or a newbie to the Internet, one thing stands out. There are an awful lot of people appearing to make money with it and on it. The first question one has to ask when viewing this flurry of activity and the overwhelming number of offers that come our way on the world-wide-web is whether or not this is real.

It's real but beware. Illusions of opportunity and tricksters abound. What separates this from other seemingly universal opportunities is that this one, unlike the gold rushes of the 19th century and the oil boom of the 20th century is that this boom is universal and all at the same time, every where at once. I won't go into the global ramifications of this politically or socially but we are as likely to be spun, diced and served by someone from Uganda and Singapore and all points in between as we are from someone from Cloudcroft, New Mexico.

No boundaries exist. There are no limitations. In a nutshell the Internet, if you haven't quite caught on yet is the biggest opportunity frontier we have ever explored and the thought of that is absolutely mind-boggling. Anyone, and I do mean anyone, with a computer and a way to plug into the Internet has created for them an unlimited opportunity, plain and simple.

Let's look at the stats. In 2002 there were 500 million plugged in from all over the world. Today, just four years later, that number has doubled. There are now one billion users. Bottom line is the speed of the market expansion is accelerating and it will double again in just a couple of years. Can you even begin to imagine it?

Now how easy is it to break in? I always like saying, "In about a New York minute". It pretty well sums up how long it takes. There are those who have a head start, no question about it. Some have been soaking and/or serving folks from the late 90's and some even brag they have been doing it from the mid 90's as though they somehow know all there is to know. Actually, all you need to know is that you can learn this in what, "a New York minute"? If you can turn the computer on and off, you can do this. This is not rocket science. And, by golly, you too can call yourself an "Internet Guru".

The "guru" description when used in connection with the Internet, I must admit, has always tweaked my disgust button. I always thought of "guru's as rare birds indeed, individuals that came along infrequently that can be counted on to be the sages of the time. They possess a vast reservoir of expertise. But, on the Internet, we have exploiters by the dozens who fancy themselves as such. Do not be swayed. In two days, you can make yourself an expert and in two months, you can, if you wish to join their ranks, call yourself an Internet "guru". All it takes is a little homework and a couple of other self-proclaimed "gurus" to back you up. First check out the good guys and the bad guys.

Type in "internet gurus" on Google Search and you will find over 7 million references. Can you believe it?

Your first lesson is complete Kid. You already surmised these listings are a lot of hype and the biggest purveyor of them all is none other than Google itself. Easily, they are the biggest seller of the shovels to all these "gold miners". Now who do you think are the billionaires?

The moral to all this is that staring at you from your computer screen is the biggest opportunity you may ever face in your life. When testifying before Congress during their attempt to breakup Microsoft, Bill Gates, the richest man in the world, was asked what would he do if he were suddenly to lose it all. He reportedly said that all he would need is one of those, pointing to a staffers computer, and in a month, he would have made at least a million dollars.

What you do with your computer, how you do it, where you do it and whom you do it for will determine whether or not you can call yourself a "guru". The opportunity has never been greater.

Good hunting and good luck.

KID: Is that it?

Homer: That's it Kid.

KID: Can you give me more. You just wet my appitite!

Homer: Next time, maybe.

Small Business & eCommerce

Volume IV No.3
Homer’s Hot Tip June 22, 2006


Kid: Homer, where in the heck have you been?

Homer: I've been on vacation.

Kid: Where?

Homer: Cape Cod but I got out of there before the tourists arrived. I like it in the Fall, Winter, and Spring. In the Summer, it is overrun with tourists and everything goes up. Not many businesses not doing well there. Hard for me to believe with all that prosperity they like liberal politicians so much. But, I did notice they like to complain a lot and that does go along with the lefties.

So what’s up Kid?

Kid: Well, first I’m one of those “lefties” but without you around here, I have not a clue what to do.

Homer: I know you are Kid and you have no one to complain to either. I don’t hold your politics against you. You’re too old to change anyway. Made any money?

Kid: Nope, not one dime since you’ve been gone.

Homer: Why am I not surprised?

Kid: Well, I did try a couple of things but I am going nowhere. I am thinking about pulling all my money out of the market and going exclusively into real estate.

Homer: Really?

Kid: Yep. I thought I would go out and flip a couple of condos in Florida or Vegas and laugh all the way to the bank.

Homer: Got news for you kid--

Kid: What’s that?

Homer: You’re too late. Most of the good stuff has been gobbled up and flipped several times. That leaves suckers like you with the crumbs and the last position to pony up to the bar.

Kid: What do you recommend? The choices are not all that hot.

Homer: What is the single most profitable thing you can do?

Kid: Invest in the stock market?

Homer: Nope. It's not the market, and certainly it’s not real estate.

Kid: Then what is it?

Homer: Small business.

Kid: Go on! I can’t believe that. How is it that owning a small business is ever going to make anyone rich?

Homer: I don’t know, perhaps I should ask Bill Gates or anyone of 7 million millionaires that made it in business.

Kid: Is that a lot?

Homer: About 89% of the number of millionaires we have in the good old USA.

Kid: Holy cow. How come nobody tells us this when we are looking for investments?

Homer: Because, those that do know, don’t want you to know. They still put their money in real estate and the stock market but they make their fortunes with small businesses – Then, if they have anything left over, they diversify into stocks, real estate, bonds, you name it.

Kid: What kind of business?

Homer: What do you like to do?

Kid: I would love to play on the computer all day and do eCommerce or eMarketing.

Homer: Well that’s interesting. Do you know how much online affiliate managers make over their traditional buddies who are affiliate managers for traditional suppliers?

Kid: How much?

Homer: Between $140,000 to $200,000 a year while their more normal counterparts earn between $40,000 and $60,000 a year. Big difference huh?

Kid: I’m overwhelmed.

Homer: And you should be. This market is right under your nose.

Kid: How do I get started?

Homer: Next time Kid.

Kid: What? What next time? For all I know you will be in Florida in a couple of months! And where does that leave me?

Homer: Waiting?

Feast or Famine

Volume IV No.2
Homer’s Hot Tip March 6, 2006

The Kid: Yo! Homer, wait up!

Homer: What’s up Kid?

The Kid: Where you going in such a hurry?

Homer: To the post office, want to mail this off to a friend of mine in London. Don’t ask what it is.

The Kid: What is it?

Homer: (laughing) You are so predictable Kid, I can’t get over it. What it is amounts to what I think will happen in the US economy over the next few months and beyond. I promised it to the Times early last month and they keep pestering me before we get too much further into the year.

The Kid: Wow! The Financial Times, aren’t you something. What the heck did you say?

Homer: It’s a secret.

The Kid: No way, you can’t keep that from me, I’m your next-door neighbor, buddy, pal, etc., etc., etc. Come on Homer fess up, what’s going to happen? Where are we headed? How do you see it?

Homer: What I see Kid is a lot of people like you making stupid mistakes and hanging on every piece of negative news and losing sight of the big picture over the next year.

The Kid: Do I really hang on every piece of bad news?

Homer: Yes you do. Fortunately, the financial markets deal in reality, not spin, and have remained by and large non-political in spite of the effort of many in Washington to make it otherwise.

The Kid: Anyone in particular?

Homer: What does it matter? That’s life inside the Beltway and will probably remains so throughout our history. But, once you recognize it exists, you can clear away the smoke and look to what really is going on. Long term I see continued prosperity, healthy real estate markets and a healthy stock market in spite of worldwide terrorism. We’re learning to live with it. Keep in mind that with computers, people can live anywhere they want. Real estate, if it is visually attractive, no matter where in the USA or the world for that matter, will benefit. Short term there are those who keep crying “too much, too fast” and don’t like the run-up in prices in hot spots like Vegas, Miami, and more than a few other choice locations. This is short-sited and unless they are looking at a crystal ball can no more call a top or bottom to anything even if it was right under their noses. Real estate remains a great investment vehicle. The downside is liquidity. One cannot shake real estate fast enough for ready cash if the market turns sour or one has to get out in a hurry because of other pressing circumstances.

The Kid: I don’t have that kind of money to flip real estate, buy and sell like some pro. What happens if your property doesn’t appreciate or if it just kind of dawdles along, then what do you do?

Homer: On the one hand anyone, even you, with a few bucks can option property for little money and flip it to a higher bidder. Huge profits are being made in a matter of days. Study Donald Trump, he invented the technique. It takes very little up front money to control literally millions in real estate. On the other hand, if the property I owned was going nowhere and I could not see my head above the water line, I would walk away from it and let the bankers worry about it.

The Kid: You kidding, right?

Homer: Nope, not at all.

The Kid: Why wouldn’t you just hold on?

Homer: Well if it were my primary residence, I might have to eat it and stay there if I had no other alternative or place to go. But, that might eventually bankrupt me and that alternative has no appeal unless its for special circumstances like a reorganization of a business or stalling creditors, or holding on to a piece of property your family has had for a zillion years. However, if it were only one of my residences or one of my properties and it was a losing proposition for me, I would not hesitate to walk away from it. You know the old Kenny Rogers song that goes like this “ You got to know when to hold ‘em, know when to fold ‘em, and know when to walk away…” There is no shame in that Kid, it’s strictly business. With that view you can take all the emotion out of it.

The Kid: I never thought of it that way.

Homer: Most people don’t. If you owe more money on real property than it’s worth, why in heavens name would you keep it? Makes no sense when you can turn around and option off something else that would appreciate rather than stagnate and perhaps even recover or minimize the losses you might have taken on the property you walked away from.

The Kid: You mean foreclosure and the bank taking the property back, don’t you?

Homer: Yes I do.

The Kid: Doesn’t that hurt your credit, your financial standing?

Homer: For about a New York minute. Once free of it one's attention can turn to real estate opportunities.

The Kid: What about the Stock Market?

Homer: Pay close attention to the evolution of the Internet, things that serve it, things you can do on it and then tie that all into the organizations that make it hum. I think we are in for about a four to five year run and companies that are new and coming on will one day dominate, perhaps dwarfing what we see now.

The Kid: Nothing can get bigger than Wall Mart.

Homer: Nothing can be further from the truth. Something will find a way to eclipse them. Maybe not in your lifetime Kid, you’re getting up there now. What are you 60? Bush, Clinton, and you are the advent of the baby boomers. Saints preserve us. Some organization will indeed replace WalMart as the largest retailer in the world. It’s just a matter of time. But don’t hold your breath for it to happen anytime soon. Right now they are making all the right moves, including manufacturing their own goods and dictating how their suppliers package and develop theirs. That’s power.

The Kid: Tell me more.

Homer: Nope. Wait till the article comes out. I’ll send you my copy, I know you’re too cheap to buy your own.

The Kid: Homer, that’s not nice!!!