Wednesday, June 28, 2006


The real estate cycle takes about 18 to about 22 years. The cycle starts about the same time the government passes new real estate tax laws. The laws are usually passed to "simplify" the tax code. You may recall that the start of the last cycle began in 1987 just after the tax simplification laws were passed in 1986.

Mr. Paulson, the Bush nominee for Treasury Secretary, received a warm welcome at Senate hearings today. He should easily be confirmed. The speculation that his top priorities will be to simplify tax laws and reform Social Security and Medicare. A few weeks ago, the congress passed only a one year extension to the alternative minimum tax. The table is set.

IMPORTANT: The real estate market is 5 times the size of the stock market and stocks do not do well when real estate is in recession.

We are currently clearly into Phase IV of the real estate cycle. A wonderful opportunity lies ahead. Those who are ready will make extraordinary returns; millions will be made. Those who pay no heed will see negative returns. As a former Boy Scout, I am a firm believer in the motto: Be Prepared. Tell your Mom and Dad, brothers and sisters, and friends and neighbors, there is no need for them to suffer the kind of losses that happen near the end of Phase I.