Kiyosaki on the Housing Bubble

A couple of articles from Robert Kiyosaki - for someone who makes a living spruiking real estate, it's refreshing to see such blunt honesty.

Booms, Busts, and Where Opportunities Occur

" "Is there a real estate bubble?" That's the question I'm asked repeatedly. When I reply honestly -- "I hope so" -- my questioners' fear occasionally turns into anger."

Kiyosaki proceeds to describe seven stages of a financial bubble as was written in 1982 by Nobel Laureate Hyman Minsky.

"So instead of asking, "Is it a bubble?" it's more financially intelligent to ask, "What stage of the bubble are we in?" Then, decide if you should be fearful, greedy, or hibernating."

Smart Investing Amidst Real Estate Mania

Here Kiyosaki describes the inverse logic amateur investors use when buying real estate.

"Personally, I would say, "The dumbest reason to buy anything is because the price is going up." Yet that's what people do when they invest. They generally don't buy high-priced things when they shop."

"For example, if Safeway had a sale -- 25% off everything in the store -- the supermarket would be swamped. Yet, when the stock market or real estate market has big discounts (often called a crash or a burst bubble), that same shopper runs away from an asset sale. Instead, they wait until prices are high and other fools are bidding them up further to finally buy."

"We all know a real estate crash is coming. The problem is we don't know when."

"A final word from Warren Buffett: "It's only when the tide goes out that you learn who's been swimming naked." In my opinion, there are many naked swimmers, especially in the real estate market."

http://globalhouseprices.blogspot.com/