Making money from other's misery.

Hi kids -

Well the NFP was total crap. Not for me, I made money. (Not like it was much of a challenge to be honest.)

So, we have problems in the housing sector, and nobody wants to hire anyone. A change in the U.S. economy? You bet.

I am actually in construction by trade, and to be honest, I am surprised it took this long for the spector of weakness to truly show itself. The houses being built over the last few decades have been really, really, worthless. The only thing I can imagine being more worthless, is the artificial "bull run" of the sector in general.

I live in Columbus, Ohio. It is interesting to look at the housing sector here. For the last few years, you could hardly walk 5 feet in this city without bumping into a stupid mortgage broker. Oh, and the telemarketing....even worse.

The city has expanded by about 4 or 5 times since the mid-80's. We keep building one cookie-cutter suburbian development after another. There has been so much construction work, I could have easily switched trades a few years ago, just by claiming to be in another trade.

The one thing that I could never figure out was this: "How many houses can they build, and keep full?". I think we are starting to see the answer.

A perfect example is Hilliard. It's a suburb of Columbus that was really hot a few years ago. Now it's New Albany that's "hot". (Les Wexner of Victoria's Secret/Express/Limited fame pretty much built the little town up.) Guess what's happening to Hilliard? You got it, nobody really cares about it. Not that land value is dropping, it's just not going anywhere. At all. Most of the houses built there in the last 10-15 years are already falling apart.

So you are probably asking by now..."What does this have to do with me, and how are you going to make me rich with this stupid story?".

Here goes, and this is just a theory. It's correct, but I must say it's not advice. It's not my fault if you use it poorly, so don't blame me.

Sell the dollar. I think that part is obvious. But as Forex traders, we tend to forget there are other ways to make a buck out there.

My plan is too wait another 6 months or so for the housing market to really go bad. Then, I plan on buying a 4 unit townhome building. Since nobody can buy houses, they have to rent. As a few years go by, slowly rehab the units between renters. When the housing market comes back, and it will, it will be time to condo the units out.

The worst thing that can happen is that you are stuck with rental property. You can make money that way as well.

The point is this: The smart money always gets in when everyone else has given up. We aren't there quite yet, but pretty damn close.