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Lemmings Are Gathering


Before they go over the cliff to their destruction these little furry ones get together for a party and celebration. Each tells the other how smart he has been with his investments and buying and selling of stocks and realestate.

Wait a minute. Did I say lemmings? I think Imeant investors. It seems they had that sameparty in January 2000 and it was a doozy thatlasted for several months. A great time was hadby all. They did not have one in 2001 asmembership dropped off. Nor again in 2002 and by2003 there wasn't anyone around at all.

The lemmings (oops, investors) had gone overthe cliff. And they were such nice little guystoo. The few at their party who tried to preachcaution were drowned out with loud squeals thatthe market was going to 40,000 or maybe higher.

This new crowd said it will never happen tothem as they are not going to put their money inthat risky stock market. Oh no, there is areally safe investment that always goes up -real estate. There is only so much land and nomore is being created. The population isexpanding so the demand will continue and pricescan only increase.

Even for the novice speculators there is aplace to make big bucks. They are joining realestate clubs just like the old stock marketinvestment clubs to which they have previouslybeen members. Put in a few thousand and watch itgrow as the real estate market keeps going upand up. These investors know they are on theverge of great expectation that will meanwealth. Wealth without work or effort. Maybethey forgot how much they lost from the expertadvice in that previous investment club, buteveryone knows real estate is a sure thing.

A stock investment is just a piece of paper,but real estate you can feel the dirt, walkthrough the building and slam the doors. That'ssolid. You can't miss. With each deal theyrecognize how they are getting smarter andsmarter. Hurrying, doing nothing constructive tomake their fortune. Just like in 2000.

For more than a year the professional traders,insiders and large institutions have beenquietly selling their stocks and I am nowbeginning to hear of sales of major properties.Just because someone has a lot of money doesn'tmean he is smart. These groups can be as wrongas the little investor.

Real estate may continue to be an excellentinvestment, but speculation in real estate canbe hazardous. If, or maybe I should say when,this market stops going up or even starts downit is very hard to sell a property. Paymentsmust be made and upkeep maintained. It ispossible to rent out some houses or offices, butthe income ratio today does not allow abreakeven to costs.

These real estate lemmings don't seem to care.They are gathering in larger groups and areworking under the greater fool theory.

This is a time for caution as it was in 2000for stocks. You don't want to go over the cliffagain.

Copyright 2005

Al Thomas' best selling book, "If It Doesn'tGo Up, Don't Buy It!" has helped thousandsof people make money and keep their profits withhis simple 2-step method. Read the first chapterto receive his market letter for 3 months atwww.mutualfundmagic.com to discover why he'sthe man that Wall Street does not want you toknow.


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