Not Your Average Garden Article: Consider this a Warning

I understand that this is an unusual topic.So, bear with me for a few minutes.

I like parables, word pictures……


Picture the two of us walking through the woods. As we are walking along I look down and see a snake, a water moccasin, coiled up, ready to strike. In another step or two he will be close enough to bite you.

What do you want me to do at this point?


Ok, let’s pause here. That is kind of a rhetorical question, right. You want me to warn you, grab your arm, whatever it takes. Yea, rhetorical. You probably won’t mind walking a few steps out of your way to avoid the snake. The extra few steps and the time you spend avoiding the snake make your journey to your destination longer. You won’t get bothered that I am warning you. You won’t mind the delay in getting where you are headed. You realize without thinking about it that the pain and delay of a snake bite is worse than the small delay in the journey.


But what if I see the snake and do not tell you? What if I think to myself,  are you going listen to me about the snake, is it really a snake,  is it really poisonous, are you going to think badly of me if I am wrong? Will you think I am over reaching  by calling it a snake, after all I am not a herpetologist? While I am pondering all this you move closer to the snake……


I SEE A SNAKE! Not a real snake snake, but a danger none the less. I see a big danger to your savings, to your retirement. I’ve been preaching this to friends for some months. Guys, the stocks in your iRA, 401K are way overpriced. The FED has “printed’ too much money creating yet another asset bubble. The last one involved real estate. This one is in stock.

Before you say to yourself: “what does he know, he is just a landscape architect, a nurseryman.”

I have been a student of the markets since the 1960s. Having invested for over 40 years. I’ve figured out a few things. Prices go up, prices go down. It is better to not own stocks when prices go down. It is better to own them when prices go up. Seems pretty simple. Buy low, sell high. I bet most of you are not actually doing that. 401K money goes into the market with little discussion or thought about if buying now is buying high or buying low. Your broker will tell you to buy anyway, sooner or later it will go up. A good theory and probably right. But as the great financial advisor Yogi Berra said, “In theory there is no difference between practice and theory. In practice there is.”


This email is not entirely altruistic. There is a self serving element. If you do not lose 1/2 of your money in a market crash, you can afford more plants. The rest of this email is about not losing money in the next few months. If that is something you are not worried about then I guess you don’t have to read any farther. If you want to know why I think I see a snake, read on.

My daughter texted the other day asking if I was buying stocks yet. I’m writing this in part because of her asking. She saw that the market was down and knew I had gone to cash in the fall. The last time I was all cash was 2008 before the big crash. Before that sometime around 2000 or so I was going to cash. I waited too long. Lost a lot of money that year. It is better to get up too early. I’d been telling her for months not to buy stocks. So my answer was that we are not even close to low enough to buy.She listens to me because in 2007  her father in law and I both told her not to buy real estate until prices dropped. She listened and was able to spend $300,000 less for the same house she wanted a year or so later. Patience is so important. You do not have to buy today.

Thinking it through is so important. Try to identify any disconnects. To a few of us there was a disconnect between housing prices and value. To over simplify a bit:

The mortgages were too easy to get. Anyone could get a loan. If you wanted a $500,000 loan and made $12,000 a year, no problem. Want a second and third loan, no problem. The federal government allowed it, maybe even caused it by making it a priority that everyone own a home, even if they couldn’t afford it.

We all know that didn’t work out well.

A disconnect. Prices were high because people who could not ever hope to pay off the loan were buying and pushing up prices. That made investors want to buy more thinking it would always go up. Greed came in, bankers, investors, home buyers, everyone. It does not always go up. Stock prices fell. Real estate prices fell. I and a few others made money shorting the mortgage market. I’m still profiting from some of the bonds I bought in 2006 that go up if interest rates fall.

There looks to be another disconnect. I hear people say stocks are still cheap.That is crazy, look at the charts. Or they think they are smart because their stocks are up. Or their advisor is good because he put you in things that went up. Don’t confuse skill with being in a bull market. Almost everything goes up in a bull market. It takes no skill to make money when everything is going up. You think you can pick the top? No one can pick the top.

I probably hurt someone’s feelings right there. Sorry, I didn’t mean to. But come on, prices go up, then prices go down. It makes little sense to ride the prices down, losing years of profit in a few months.

But prices always come back up don’t they? Maybe. Where is the logic in turning $100,000 into $50,000 then hoping it goes back to $100,000 some day??? How about a different idea, sell at $100,000 and wait until the market goes down then buy back in. If your $100 doubles you have $200. That seems better than trying to get back to even.

So back to the snake story. You didn’t mind delaying your journey to get around the snake. You also shouldn’t mind delaying your journey to financial security to avoid a snake. The snake is the overpriced stock market. The snake bite is the fall in prices if I am correct. The pain of the snake bite is worse than the delay.

Here is what I advised my kids: If you own stock, sell. If you do not own stock, good, don’t buy.


A few weeks ago, one of my friends bought stock in Freeport McMoRan. Price was too low for him to resist. Freeport is a copper miner. 40% of copper is bought by China if I remember correctly. China isn’t buying. My guess is his stock is down 20-30% already with more to come. Just because it’s cheap doesn’t mean it is at a good price to buy.


Remember that in a bull market most stocks go up. Well in a bear market, most stocks go down. You can buy the right stock at the wrong time and lose a lot of money.


Ah I am tired of writing for a while. So, some of you guys will have read my ramblings and have all your money this time next year. So Buy plants.