Fear: Something fishy swims here.


As 2008 is coming to a close, we all look back in stunned silence. What Happened?

Fear, for one thing. Sometimes financial markets remind me of schools of
fish. All the fish dart one way, then one fish gets nervous, turns-- and
the whole school turns as well.

And sometimes, when the fish are in a state of fear, they freeze. They think--
"Ha! I'll just be very still, maybe that shark coming toward us will think I'm
a piece of coral."

It is amusing to watch an aquarium for a while and notice the behavior of the
group of fish, each trying its best to survive, but each acting out of group fear.


Over the last year, each time there was some bad bit of news, the whole school of
investors got startled, and like a group of fish, all moved at once, darting left, then right,
then freezing still, then darting back again-- ending up in the same place, but with
a lot of wasted effort.

I watch Jim Cramer or Maria Bartiromo try to make sense of fear and panic in
the suites-- the fear mentality: sell, buy, freeze, sell. no one seems to remember
the panic and fear from yesterday ("Oil prices are going to the MOON!" ); there
is always a new scare today ( "This will be another Great Depression!").

In real estate, we seem to have some schools of fish trying to figure out how better to
be a diner rather than some shark's dinner. And it isn't easy, because every time one
fish moves, another 100 fish follow, creating enough of a stir so that every shark in the
sea knows where to find a tasty supper.

So what do fish have to do with buying or selling real estate? Well, sometimes it is better
NOT to swim with the fishes.

Sometimes the smart thing to do is to swim off, find a nice piece
of coral, settle in, munch on some plankton--and avoid sharks and panic.

Sometimes you just have to let all the others consumed in panic to rush madly
about. But usually fear and panic don't lead to the best decisions.

Enough fish tales: buyers and sellers of real estate have to think
clearly and independently. Just because TV and newspapers have
been promoting fear desn't mean people haven't been selling real estate
and others buying it. Each person's circumstances are unique. Some
people will profit based on panic selling (think of all the poor souls
who sold NYC real estate after 9/11, convinced NYC prices would
plummet).

Prices for apartments and homes will probably decline in NYC, but that isn't
cause for either gloom or panic. It may be a great opporunity for a buyer to
pick up a more reasonably priced apartment, or it may be time for a seller
to take his profit now. Either way, the decision should be based on individual
considerations: learning about neighborhoods and job opportunities,
thinking about future needs and family plans, and what kind of quality of life
one wants and can or can't afford.

2009 should be a challenging and exciting year-- Dive in, the water is fine!