DC4MS

Here is some interesting reading

Wall Street Crash of 1929 - Wikipedia, the free encyclopedia

I hate to say this - but there are some parallels to what is going on now.

The Wall Street Crash of 1929, also known as the Crash of ’29 or the Great Crash, was the most devastating stock market crash in American History, along with Black Tuesday (October 28 and 29, 1929) that precipitated widespread panic and the onset of unprecedented and long-lasting consequences for the United States. The collapse continued for a month.

Economists and historians disagree as to what role the crash played in subsequent economic, social, and political events. The crash in America came near the beginning of the Great Depression, a period of economic decline in the industrialized nations, and led to the institution of landmark financial reforms and new trading regulations.

At the time of the crash, New York City had grown to be a major metropolis, and its Wall Street district was one of the world's leading financial centers.The New York Stock Exchange (NYSE) was the largest stock market in the world.

The Roaring Twenties was a time of prosperity and excess in the city, and despite warnings against speculation, many believed that the market could sustain high price levels. Shortly before the crash, Irving Fisher famously proclaimed, "Stock prices have reached what looks like a permanently high plateau."[1] The euphoria and financial gains of the great bull market were shattered on Black Thursday, when share prices on the NYSE collapsed. Stock prices fell on that day and they continued to fall, at an unprecedented rate for a full month.[2]

In the days leading up to Black Thursday, the market was severely unstable. Periods of selling and high volumes of trading were interspersed with brief periods of rising prices and recovery. Economist and author Jude Wanniski later correlated these swings with the prospects for passage of the Smoot-Hawley Tariff Act, which was then being debated in Congress.[3] After the crash, the Dow Jones Industrial Average (DJIA) recovered early in 1930, only to reverse again, reaching a low point of the great bear market in 1932. The Dow did not return to pre-1929 levels until late 1954,[4] and was lower at its July 8, 1932 level than it had been since the 1800s.[5]
“ Anyone who bought stocks in mid-1929 and held onto them saw most of his or her adult life pass by before getting back to even. ”

3DH

Pessimist! Let's just try to remain positive, now...!

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"Boutique" is better! Another extremely satisfied LUSSO member!

DC4MS

I am usually a very optimistic person...however, when I Wikipedia-ed the 1929 Crash and Great Depression, I could not help notice the parallels between the credit crunch of people buying stock in 1929 vs the current crunch as the result of people buying real estate (mainly speculative) and if you simply replace the word "stock" with "real estate" it becomes frightening.

Veras Group Jim

There is no doubt: buying on credit (stocks, real estate, anything) is a magnification tool. Magnifies the ups, magnifies the downs.

Very ominous times! Makes you appreciate the business decisions of DCs that buy with no debt...

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Jim Pippin
Co-Founder & Managing Partner
The Veras Group, LLC

Quintess Michael

I think a more accurate statement would be: It makes you appreciate DC that buy homes with LIMITED, RESPONSIBLE debt, so that the member/home ratio stays under 10.

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Michael Aumock
Director, Membership Development
Quintess, The Leading Residences of the World

Veras Group Jim

Thanks, Michael; I couldn't agree more that some members do in fact prefer the model you describe. My response was purely directed to the discussion about leverage, in that leverage always increases risk/reward. I.e. rewards can be greater with leverage that succeeds, and risks can be greater when it fails. It can be well-balanced risk, of course, and I'm sure within Quintess it is responsibly undertaken.

It's interesting, isn't it, how many different models there are? I think it is accurate to say, though, that some clients appreciate clubs with perhaps poorer availability, and no debt. (Just as some clients appreciate clubs with perhaps better availability, and responsible debt.) I even think there are some clients who can tolerate A LOT of debt, in exchange for great availability!! It's important to understand who you are working with, because if one thing is certain, it is that there is no "one-size-fits-all" in the industry.

Different strokes, different folks...

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Jim Pippin
Co-Founder & Managing Partner
The Veras Group, LLC