Buy On Dips, Sell On Rise
I remember this also from my days as a day trader trading futures and options and heavily leveraged commodities. I'd wake up in the morning, I'd be excited. I'd have the five monitors go in. I'd have all the phone lines and the t1 line, and the people I could call if I needed to and the people who had my money on margin, I had all that stuff ready to go. And I'd look and there'd be no trades to be had and at the end of the day I'd feel deflated because I'd be like, I spent you know four hours here, I didn't make a single trade. But I remember later realizing that those were the days where I made the most money because I didn't lose my capital. I waited, I saved it for another day and that's the difference between an amateur and a pro.
Like you're saying Bart. The difference is being able to save your money, save your resources until the opportunity presents itself. And how do you know that it's the right opportunity? It's going to feel like it's too good to be true. And so in any market, you have what's called price elasticity and you have a market that raises and if that market raises artificially, which I believe now the real estate market for example, is artificially raised, right? It's not just supply and demand. There isn't intrinsic value like, getting a shack in Venice for 3.7 million dollars. Doesn't pencil out the mortgage on that thing is insane. The fact is that there's cheap money around right now, which is slowly coming to an end and that those numbers are inflated.
So what what will happen is when that 3.7 million dollar tear down shack in Venice goes to three or let's say 2.9 million dollars, there will be a flow of people who are waiting to get in at 2.9 million that will come in and buy. And what will happen then is it'll bump up again because of supply and demand again pricey less price elasticity, it's an artificial raise. It's not real. And then what'll happen is it'll start going down. Maybe it'll go to two million that same house and people go. Oh, I'm out. This is crazy. And then you'll hear the murmurs in the background. All the brokers going, you should invest in this and that in the stock market, but the words won't be around real estate anymore. And then it'll go down to a million. And so now you're looking at what was a 3.7 million dollar house or a 3.2 million dollar house and it's a million bucks and then you pounce.
Then you go in with the same money and you buy three then you get investors. And that's when you're going to make the real money and a lot of us did that in L.A. During 2008 buying in downtown L.A., buying in Venice, buying in all these areas. I've been buying real estate in Venice since the early 1990s and so you can do it. But timing is everything, which is what I got from the lessons that you were sharing with us here Bart.
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