Home prices never go down.

The added uncertainties of the Trump chaos make it easy to lose touch with some basic, straightforward points. This post might be a bit of a review, but I think it may be a timely review for both new and old subscribers.

From “Building from the Ground Up”:

In 2010, The Washington Post included the idea that housing prices always rise in a series of the ten worst ideas of the decade. “Countless delusions and mistakes brought on our financial crisis, but none did as much damage as the belief that home prices never go down…[A]t the start of this decade, this belief became the lynchpin of an entire investment philosophy.”

Home prices never go down (…unless we try really hard to make them).

Understanding this provides us with a massive trading advantage. Much of the investing world believes, passionately, that this was a ridiculous myth that soft-minded investors believed to their own ruin. They think it is the most dangerous thing an investor could believe. They think the market is full of herding traders who will always forget that lesson over time, and they are bound to be blindsided by a price correction.

But, it’s true. Home prices never go down.

I’m going to put the explanation below the paywall. I want the rest of you to think I’m crazy so you’ll keep taking the other side of our trades. :-)