Dangers of "Positive Thinking"

[Jim Caudill]

As I reflect on the changing nature of the car wash business and even this forum, I remember some of the comments that were made when I and a few other posters were accused of "talking us into a recession" and in general being a "wet blanket". Here's an interesting link from a Newsweek Magazine article about not taking a serious analytical approach to business and financial matters:

http://www.newsweek.com/id/225320

 

[pitzerwm]

Good point Jim, Unfortunately, the writer is a flaming socialist that thinks the government should create all of the jobs to save our economy. Good luck with that plan.

IMO, thinking positive is still the best plan. Having a Plan B in case you missed something is also smart. IMO the reason that all of US were blind sided is that we were aware that borrowing 125% of the value of your home with a variable interest rate was stupid. Sure we knew some dumb asses was doing that but we didn't realize that 1000s of people were doing it. When the government forced banks to loan money to people that didn't normally quailify, they all began to think what the hell, we have to loan these minorities that shouldn't buying a house, and Freddie Mac etal, will buy the paper, we might as well loan to white people too. So inspite of the government blaming greedy Wallstreet for causing this, its the government who demanded the beginiing of the problem. Obama was a community organizor that's only job was to sue banks that didn't loan fast enough.

Anyone that can show proof that this isn't what happen please do so.

 

[Tom Thumb]

I do not understand where this lady is coming from.
what happened to the days when we were expected to be responsible for our own decisions ?

The time when we had to actually qualify for a loan by showing how much money we had to pay toward a house.

And then we had to have a 15-20 percent CASH down payment.

 

[pitzerwm]

That has become the normal. NO one wants to be responsible for their actions or non-actions, and our school systems have aided and abetted this attitude.. Of course the government has decided to guarantee that they don't have to. When the bill comes due, the government looks around and there we are dumb enough to have made the right decisions and become successful, what better place to get the money.

 

[Washmee]

The progressives believe that the only reason us sucessful people are where we are at, is because we rode on the backs of the poor victim class. So in their minds its perfectly OK to take from the rich and give to the poor(Lazy).

 

[rph9168]

I just wonder who they think will pay for all this when they tax and regulate businesses out of existence?

 

[Red Baron]

Part of a positive attitude - especially in the face of a very negative business climate - is knowing that every big problem creates an equally big opportunity for those positioned to take advantage of it.

I can set around worrying that if/when Israel drops bombs on Iran, diesel for my pickup will go to $8/gal...or, I can hedge that by sticking some money in an oil LEAP option (.ZVKAA) and know that if diesel goes to 8 bucks, I'll make enough to pay for my diesel for a couple hundred years.

Same goes for adding my 2nd IBA that will wrap up next week. Contractors are hurting right now, thus I got the construction done for about $30,000 less than normal.

For every calamity, there is an opportunity.

 

[pitzerwm]

So right Red Baron

 

[Turbo]

Red Baron,

Please expand on oil price Leap Option.

Thanks

turbo

 

[Red Baron]

Red Baron,

Please expand on oil price Leap Option.

Thanks

turbo

Long term Equity Anticipation Positions (LEAPs) are an option to buy or sell a stock, just like other options, but they give you more time for the stock to make it's move than traditional options. I bought some that expire in April/09, when I thought Israel would attack Iran any day. When it looked like that isn't going to happen, I bought some that expired Jan/10.

Our roof equipment manufacturing company (koldking.com) is affected by the price of oil. When oil goes up it hurts our business because the price of roofing asphalt also goes up. When asphalt goes up we sell fewer asphalt spray rigs. We also receive a small royalty on the asphalt emulsion sold to our customers in 32 states...again, a high oil price hurts us. So, LEAPs options are a way for me to hedge against high oil prices.

If Israel struck Iran, or some other calamity happened that drove the price of oil thru the roof, a couple thousand dollar hedge in options on an oil-driven stock (USO) would be worth quite a bit of money.

It's a very volatile investment and not one to spend the bread money on. My April/09 options went up 42% in a couple days a couple weeks ago, but now are down over 50% from what I paid.

And it's easier than going to Vegas.

 

[cebo]

Bill is right. This woman is on PC's (and I don;t mean politically correct) preferred reading list from way back. She has a hard time finding a job in her previous book and has an obvious agenda.

Bill one thing I will say 125 loans did not do us in. FnMA lowered their standards and started taking anything from anyone who could fog a mirror. The 80/20's were the killer. Fannie took the 80 with low credit scores and the CW's & Citi's took the 20. 20 being a 2%-4% equity line that jumped to 6%-12% in 12 to 24 months. Lots of buyers increased demand which increases prices (Econ 101 - neat graph that works for everything). Now lending requirements go back where they were 10-12 years ago and credit tightens. No demand, prices fall, (that pesky graph again) the 10% interest crowd can't refinance. Here come the foreclosures.

As a real estate appraiser I've been in a recession since about 2006 . Lucky I'm not in one of the 5 states that started sucking us down the rat hole and was smart enough to set up credit lines to get me through. Now if I could find someone to blame all the rain on. Carwash business is worse than real estate. Just hang on.

cebo