Commercial Opportunity?

Just when I thought the world was starting to make some sense, I read this article:

http://www.cnbc.com/id/27930515

The link to the article above will tell you why there are some really good investments in commercial real estate bonds right now.

THIS IS MADNESS!!! Whatever you do, DO NOT go out and buy commercial real estate bonds. This article would have millions of people buying the garbage because the yield is high.

Remember that a bond is just a loan. A commercial real estate bond is just a loan from private investors to commercial real estate thieves. These things are junk. The reason they are paying such a high rate of return is because if you invest in them you WILL NEVER SEE YOUR PRINCIPAL again. Don't do it - high yields often mean high risk. Have you driven around town lately to see what is happening to commercial real estate?

These guys are so desperate for new "investors" (i. e. "suckers") they will do anything to get your hard earned cash. The banks have already realized they are crooks - don't become the lender of last resort.

Also, please do not rush into stocks because the headlines are saying we are in for the biggest bear market rally since 1933. Stop and think about that for a moment. 1933! Where exactly were we bouncing from back then?

Please pull out your historical charts.

http://stockcharts.com/charts/historical/djia1900.html

If you are a trader, or an investment advisor with years of experience, you may be able to play this rally. If you are not, please don't buy all the bull shit you hear. These people have a vested interest in selling stocks.

I remember my days as an intern at a certain "financial planning" company. I worked as an assistant to financial planners. I decided NOT to be a financial planner because of what was going on there. (Granted, there are some very good financial planners out there, but they are not the flashy kind of guys and gals that most people gravitate toward.)

I also remember my days as an Investment Sales Representative (and later Supervisor) at your local community bank. I remember the feeling I got when I would put people in the appropriate product for their risk tolerance & time horizon. I knew I had done the right thing for the customer, but I knew I would soon be called in to my manager's office, after selling a boring CD or Annuity to an 70 year old lady. It was approximately 1997.

"Why didn't you sell them on mutual funds? You know you get a higher commission?" To which I would answer, "It didn't seem appropriate, given her risk profile." The boss would then say, but didn't you show her the CHART?" The "CHART" was a graph showing the S&P 500 and it's gains since 1955 or so. I would counter that it wasn't an accurate chart to show, because it did not accurately portray the risk associated with stock investments. It excluded the time period from 1929 to 1954. This woman was retired. She needed her last $200,000 in the world to live off of. I wasn't being a good steward if I put her in risky assets. My boss would act very irritated and make suggestions under his breath that I would be better in operations. And so it was, eventually I moved into operations, which I loved. Sales was not for me.

Now, this is not to say that if this woman would have been 30, 40, or maybe even 50 with a lot of assets, that I wouldn't have recommended mutual funds as part of her portfolio. I would have; IF her risk tolerance and time horizon were appropriate. But, you see, this wasn't very good for sales. I was too smart for sales, or to honest. I would do much better in operations. And I did.

I am currently reading a book by Aaron Clarey called, "Behind The Housing Crash". It reminds me of what I was experiencing back in the day. He was going through a very similar thing as a credit analyst not long after I was listening to my bosses tell me why mutual funds would always go up over time. Buy his book - it is worth every penny. I laughed out loud in several parts, probably because I could relate, although in a different time and place. I was worried about the dot-com bubble at the time, and how it had inflated stocks. A little while later, he was worried about the housing bubble, and he was right to be worried. Anyway, it is a great read, especially if you want to understand the nature of the housing bubble.

OK - that was a tangent. Goodnight.