Those 'investors' were really just 'gamblers', 11/5

Published November 5, 2006

An integral part of the historic role fulfilled by newspaper columnists has often been to remind readers of important distinctions we ought to make in thinking through decisions. In the areas of economics or investments, we would do better were we to reflect upon the distinction drawn by Benjamin Graham between investors and speculators.

With this 70-plus-year-old advice in mind, I refer you to paragraph four on Page 7D of your article on Oct. 27 that points out that in 2005 inflated prices of real estate were pushed further by "investors" and now these "investors" are actively engaged in liquidating many of their "investments."

Neither Graham nor Warren Buffett would consider such activity as rooted in the concepts of an investor. The plan for a quick turnover for even further inflated prices is forever based not on principles of investing, but in the psychology of the "greater fool theory." When one looks at the percentage of mortgages in the Tampa Bay area originating in 2005 that were interest-only loans, one must conclude these folks never thought through their projects from a historical perspective, to say nothing of common sense.

Those real estate speculators of 2004-2005 operated from the same thought basis as the then-recently minted stock market speculators of 1995-2000, all of whom thought they were "doing their homework" before indulging in the latest socially elite way to gamble. History repeats because human personalities remain the same as folks cycle between the drives of fear and avarice. Bring to them your good knowledge and your historical perspective. Most all of us, at least those of us who are males, came originally to the investment business chock full of undeserved confidence and a greedy outlook. Our views have been tempered as we were mugged by reality.

Thomas F. Fredrick, Port Richey

Florida population, column Oct. 23

Hey, northerners. Go live elsewhere

However, I must take issue with this column. You made some fine points, mostly about the costs, financial and societal, that we'll make here in Florida because of all the newcomers. But after all those points, at the end you state, "But we'll make room."

I think that sends the wrong message. There isn't much room left! If I had my way, I would find a way to keep more people from moving in. As it is, there is no quality of life in this state. Yes, it is "looking a bit crowded on those highways and beaches." We are overcrowded to the point you can't go anywhere without finding traffic jams and crowds, etc. I know people are coming. I also know we have to find a way to slow down this insane growth and get people to move somewhere else for a change. I'm sick of this overpopulation, and the loss of my beloved Florida as more and more northerners move in here with their unrealistic mind-set about what Florida is supposed to be. We are choking, and Florida is dying because of all this growth.

Ron Thuemler, Tampa

Credit to Wal-Mart Oct. 25

It's nice to see good news about Wal-Mart

Thank you for your article about Wal-Mart. It is wonderful to see a positive article about a great company. I would like to see Mr. Bart Weitz of the University of Florida business school write for your business and editorial sections.

Robert K. Reader, Clearwater

Cooling housing, column Oct. 30

Housing craziness affects those who are in the business

My husband and I own a successful real estate company in west Pasco county. That is until a few months ago! Your reporting about stalled sales and cooling prices is right on the money for most of Tampa Bay, but things are much worse in Pasco.

I would like to see some reporting on how this real estate nightmare has affected the thousands of people that work in the industries related to housing. I know agents who haven't sold a home in months and are living off their savings, in hopes that things will turn around. These are good agents that have been in the business for years, not just during the past couple crazy ones. If things don't turn around by the end of the first quarter, our county will be in dire straits.

Most Realtors and mortgage brokers don't want to talk about it because they think it will only make things worse. I just can't imagine how much worse it can get! Our phones have been dead for the past couple weeks, just like they always are between Thanksgiving and New Year's. If it is like this now, I can't imagine how it will be in the first quarter.

I received a call from an A/C contractor wondering how business was, because his phones have been quiet, too. He is very worried. He told me several of the small suppliers he uses are about to face foreclosures because things are so bad. We also had a Realtor ask us if we could buy his house because he was about to default on his mortgage. And my hairdresser said it was affecting their business and how they spend their money, too.

I am extremely frustrated by the government's response to this crisis. I knew at the beginning of the year it was going to be bad, but not like this!

I most certainly don't want to come off as a whining Realtor looking for sympathy. That is not the case. My husband and I are lucky enough to weather this financially. But many good agents will be financially affected by this for years. I hope somehow we can get Tallahassee or Washington's ear before it is too late for many small business owners.

Sue Horan, Horan Realty Group, New Port Richey

We're paying the price for speculation and cheap mortgages

Your article today is a relief from the avalanche of negative articles concerning real estate. We did benefit from the downturn in the stock market and tech stocks. Young investors at that point never saw a bad stock market and thus they thought they would become instant millionaires. Not so! Next up was the millionaire quest through real estate. Thank goodness people are back buying homes rather than hoping they make the right decision to gain at least 100 percent appreciation in a month or two.

The mortgage industry also fueled the market with "free" or easy-to-obtain money so that everyone just loaded up on mortgages and home equity loans for more investment properties. Add our tax and insurance crisis and we wonder why the market has suffered. All of this and the exponential rise in articles on real estate have paralyzed people wanting to make good decisions. Who wants to buy at the bottom of the market - or in Florida for that matter?

Common sense is common sense in any market at any time.

Maren Cox, Coldwell Banker Residential Real Estate Inc., St. Petersburg

Allstate's letter Oct. 29

CEO's words show arrogance of the industry

I am writing in response to Allstate Floridian president Phil Lawson's letter about higher insurance rates being dictated by future disasters. He stated that "The market was shattered by eight hurricanes hitting our state in a 16-month period." He states that "Allstate Floridian sets its home insurance rates based on longer-term trends ... ."

Where were the actuaries employed by Allstate all those years prior to that event? What kind of a risk assessment did they do after Hurricane Andrew? How many of Allstate's policies include the wind coverage?

In my opinion, Allstate Floridian was set up so that, if a catastrophe did hit Florida, the parent company's liability would not be threatened. It wouldn't be too difficult to liquidate Allstate Floridian.

What would be more in order is not a national catastrophic fund, as Mr. Lawson suggests, but a congressional investigation into these insurance companies and the abdication of their responsibility. Don't hold your breath waiting for that to happen. They have better lobbyists than the average consumer and their political donations are more significant.

Clearly Mr. Lawson's letter demonstrates the arrogance of the insurance industry in this state. Shame on him!

Francis P. Bunting, New Port Richey

Runaway insurance costs

Charities will pay the price for insurance cost

I just received my real estate insurance renewal. It went up $942! This is on a modest two-bedroom house. This means I can no longer support worthy organizations as I have in the past: the Smile Train, Florida Sheriffs Association, American Heart, United Way, Olympic team, Humane Society, Lung Association, etc. Sorry, but my retirement income goes just so far. Something must be done to stop these runaway insurance costs.

Jerry Fisher, Pinellas Park

Pack light - pack smart Nov. 1

Some of those carry-on items are banned

Not very smart if you ask me! Those scissors, tweezers, glass cleaner, etc. should have Mr. Jensen booted right out of line at check-in time! I can't walk on a plane with those items ... and neither can he.

Barbara Purtee, Gulfport

Define 'Tumble' Oct. 28

Times shows unwarranted gloom and doom of stocks

The Times' Business section lead story proclaims that "stock prices tumble." Yet the same page shows the market measured by the Dow Jones Average declined a scant half of 1 percent on Friday, and was up in price for the week.

For the year, the market has been up more than 12 percent, with the Dow setting a record high recently. This close above 12,000 was greeted by the Times as "Record Dow no big wow" (Oct. 4).

Such embellishment by the Times toward a negative stock market portrait is indeed even more curious days before the upcoming election. Readers may wish to ponder why.

Anthony Howe, St. Pete Beach