read an interesting theory by Bill Gross, the bond king, who manages the world biggest bond fund at PIMCO, re-quoted by Paul McCulley at his Global Central Bank Focus dated March 2007. Bill Gross first wrote this Plankton Theory way back in August 1980.
"The plankton theory, like life itself, begins and ends in the ocean. Plankton, of course, are almost microscopic organisms that serve as food for higher life forms. Without plankton almost every fish and mammal in the sea could not survive, since most species depend upon other fish for their existence and plankton are the initial building blocks of the entire process ... ... In the case of real estate, the plankton would be the first time buyer (perhaps a young married couple) with a desire to own their own home but with very little capital to carry it off. When the time comes that they can't pull it off ... then the plankton would disappear and the rapid escalation in housing prices would ease as well. For, unless the current homeowner has someone to sell his house to, he'll be unable to afford the house, and the process would continue into the echelons of Beverly Hills and Shaker Heights. In the end, the entire market would wither on the investment vine and home prices would stop increasing at the same rapid rate. So to gauge the health of the housing market, look first at the plankton. Without their presence and financial vitality, the market's not going to repeat the experience of the past 10 years."
The meltdown in the US Sub-prime mortgage market has always been the talk in town and US housing woe has always been highlighted by financial gurus around the world as the key factor to cause the global financial crisis. Plankton theory, helps us to understand that a building won't be standing tall and remained stable if the foundation has weakened substantially. However, for us not in the US, it's pretty hard for us to see if the "planktons" are dying. However, we could look at some US economic data more closely in order for us to prepare for the "next worst thing".
If housing is the main "theme" last year, this year, US Unemployment figure will be an exciting one.
Perhaps it's time to watch out.
Word of wisdom:
"I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful" - Warren Buffet.
"Investing is simple, but not easy." - Warren Buffet.
Subscribe to:
Post Comments (Atom)
4 comments:
Hi !.
might , probably very interested to know how one can collect a huge starting capital .
There is no initial capital needed You may start to receive yields with as small sum of money as 20-100 dollars.
AimTrust is what you thought of all the time
The firm represents an offshore structure with advanced asset management technologies in production and delivery of pipes for oil and gas.
It is based in Panama with structures everywhere: In USA, Canada, Cyprus.
Do you want to become really rich in short time?
That`s your choice That`s what you really need!
I`m happy and lucky, I began to get income with the help of this company,
and I invite you to do the same. If it gets down to choose a proper companion utilizes your funds in a right way - that`s it!.
I earn US$2,000 per day, and what I started with was a funny sum of 500 bucks!
It`s easy to get involved , just click this link http://ikazabylu.ibnsites.com/etirutak.html
and go! Let`s take our chance together to become rich
Good day, sun shines!
There have were times of hardship when I felt unhappy missing knowledge about opportunities of getting high yields on investments. I was a dump and downright stupid person.
I have never thought that there weren't any need in large starting capital.
Nowadays, I'm happy and lucky , I begin take up real money.
It's all about how to choose a proper companion who utilizes your money in a right way - that is incorporate it in real deals, parts and divides the profit with me.
You may ask, if there are such firms? I have to tell the truth, YES, there are. Please get to know about one of them:
http://theinvestblog.com [url=http://theinvestblog.com]Online Investment Blog[/url]
[B]NZBsRus.com[/B]
Skip Crawling Downloads With NZB Files You Can Rapidly Search Movies, Games, MP3 Singles, Applications and Download Them at Accelerated Speeds
[URL=http://www.nzbsrus.com][B]Usenet[/B][/URL]
So tгavelers anԁ travel buѕineѕs managers аre nοt oρen to
гeceiving communicatіons fгоm thеіг employees.
Ѕо, іt is еѕsеntіal tо youг meaning.
Finаncіng сame partly from the ѕtate рrіsonѕ, аnd tо help them live
up to it's name.
Feel free to visit my homepage :: orlando internet marketing
Post a Comment