Last fall I meet a good hearted nice fellow named Billy. Actually that is not his real name. I’m protecting his real name. Billy is a college graduate working a white-collar job. Billy is also a financial idiot and to me that is what makes him interesting.
Billy bought a condo at the absolute peak of the Seattle real estate market in 2007. Actually it was a condo conversion. He got the privilege of swapping his low rent payment for a bloated mortgage without having to hire a mover. A lot of people bought in 2007. What makes Billy unique is how much he is convinced he made a brilliant investment at just the right time. He also falls for the Seattle Myth, which states this market is immune to price drops.
Earlier this year Billy was still trying to find people to buy the last remaining units in his building. Seems prices are off a little and having unsold units in his building is affecting his property value.
Two weeks ago I saw Billy. Some people were talking about the economy and Billy stepped forth with some words of wisdom. Buy Gold! Gold had just hit $1000 an ounce and was now on Billy’s radar. Gold dropped by 10% in the next two days.
I look forward to the day when Billy tells me the stock market is an awful investment. That will be the day I go all in long.
Joe
Mar 27, 2008 — 8:11 am
The really entertaining part of this is that he sounds unaware of his bad decisions. The wide-ranging cluelessness is funny!
A fellow I know bought a condo at what he thought was bottom of the market in L.A. just last year and now prices have dropped another $20k, plus he did $10k in renovations. Plus: he did 100% financing and can only rent the thing for half of what the payments are. At least he has the good sense to know he screwed up. $30k mistake. Ouch.
MAS
Mar 27, 2008 — 8:28 am
When I had my first suspicions about the real estate market in early 2005, I was fortunate enough to read the 2nd edition of Irrational Exuberance.
Had more people read that book…
susie
Jul 29, 2008 — 10:22 am
is this the billy from san diego
he’s just a rich little hacker with too much time on his hands. even if he loses his ass i’m sure mommy and daddy will bail him out.nothin but a punkass bitch