Real Estate Happy Hour Show - Episode 41

Watch the Real Estate Happy Hour Show - Episode 41

The Real Estate Happy Hour Show is ready to put 2018 in the books but before Collier Swecker and David Arnette sing  “Auld Lang Syne”  the guys are back to talk about Collier’s Trip to New York at Christmas, The Government Shutdowns Effect on the Real Estate Market, What You Should Be Doing To Protect Yourself from Steep Declines in the Stock Market and 5 Reasons Houses Don’t Sell in a Strong Real Estate Market! Oh and we can’t forget College Football bowl picks! Join us every Thursday at 4pm for the live show on Facebook Live or watch or listen to the Real Estate Happy Hour on replay or podcast.

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Collier: All right, welcome to the Real Estate Happy Hour! It’s 4 o’clock!

David: We’re doing it!

Collier: We are back!

David: We are your source of information in the real estate business right?

Collier: Hey, there’s a lot of news to go around.

David: We’re kinda of a big deal and these are not the glory days.  

Collier: Not in real estate right now or the stock market.
 
David: (Laughter).

Collier: It is a Roller coaster!

David: But we’re still having fun.

Collier: We always have a good time!

David: We’re bringing in some new information, we got, we got a Government shutdown today, let’s see what else we got, we got some stocks that we’re gonna talk about, we got some football games again.

Collier: Football’s back for a week!

David: We got the Fed, we got some interest rates.

Collier: Absolutely!

David: And then we’ve got 5 reasons houses don’t sell in a strong market so, we’re bringing all that to ya.

Collier: (Laughter), Jenny Williams says are you through having roller coasters?  

David: Oh we love it.

Collier: Oh yeah that’s right, well who would, who would even think, we’re gonna get to it, but who would?

David: You could end up losing your lunch if you ride on roller coasters so.

Collier: That’s right (laughter), losing your lunch metaphorically right?

David: Yeah.

Collier: No, who would think and we’re gonna talk about it, about the Fed you know, hear all these news about the Fed and then also, then you hear the Government shutdown? Who knew that it has wide ranging effects to you if you’re a buyer or a seller.

David: Right.

Collier: Of real estate.

David: Yeah it definitely affects us, there’s definitely things that bleed over into our business that we’re gonna talk about.

Collier: Well, how was Christmas?

David: Christmas was great! Great, good times, Christmas day you know with young kids, cousins and nieces and nephews, everything, always a long day, getting up early, everybody’s excited right?

Collier: Absolutely!

David: So, but good time with the family, always good time with the family and, and everybody.

Collier: Well you know, one thing I was talking you know, I used to always say waking up in the morning you know with a little, little one, it’s a, it’s a ton of work and now I looked at him the other day and just said hey, these toys aren’t as much fun to play with even for me! When they get older, I mean you know.

David: Yeah.

Collier: The days of chasing down batteries and all that, but you know good time and now my favorite Christmas memory from this year was you posted on Facebook that you had a choice of watching the Georgia Tech football game or a movie called “Dumpling”

David:  Let me tell ya something, Georgia Tech woo!

Collier: Ha! Who?

David: We lost 34-10 to Minnesota.

Collier: You got it whooped if you know what I mean.

David: Minnesota who was 6 and 6 two people, that Jenny says easy when your kid’s in college is expensive Christmases yeah, so 2 people had a, had a problem with the Minnesota coach, 2 different people P. J. Fleck apparently P.J. Fleck is not good at friends and influencing people because he’s got some people that don’t like him a whole lot and he’s at Minnesota 6 and 6 so anyway.

Collier: Right.

David: So yeah so.

Collier: You’re thinking hey, cake walk.

David: So then, we, we, the option was thrown out there to watch “Dumpling”.

Collier: (Laughter), the dumpling, oh my!

David: And apparently there some Dumpling fans.

Collier: Hey Tara!

David: Out there.

Collier: Tara did you up? Tara limbered wood.

David: She liked the Dumpling movie.

Collier: I bet Tara limbered wood too ‘cause she’s a Southerner, she has all that.

David: It was.

Collier: Southern English.

David: It was cute, but it’s funny that Tex getting throttled by Minnesota, so we had to watch Dumpling.

Collier: No, no, I will remember that memory.

David: Yeah, that’s, that’s, that’s.

Collier: For a long time!

David: That’s one of the best huh?

Collier: Absolutely!

David: That’s right.

Collier: Well hey, we went up to New York if you had not been to New York during the Christmas season.

David: It’s great!

Collier: Phenomenal! Except for the shopping I didn’t like the shopping, men don’t like the shopping but.  

David: Yeah.

Collier: So I had, I, I, I was on Julia duty watching her breakdance in the city.

David: Oh yeah.

Collier: With a bunch of street performers.

David: And sing and everything, she was just.

Collier: She was in hog heaven, man.

David: Yeah, she was.

Collier: Hey now, I tell ya everybody knows how cheap I am, Amanda would not do this but I figured a way ‘cause look, have you ever gone from La Guardia to get downtown it’s expensive, I mean you remember taking a taxi 50 bucks each way.

David: Yeah, oh yeah.

Collier: I think you pay and I found a way to take the city bus (laughter).

David: (Laughter).

Collier: For 2 dollars and 75 cents! Amanda said I’m glad you took it.

David: Holy Swecker!

Collier: This girl is, yeah.

David: Holy Swecker! Yeah.

Collier: It’s phenomenal!

David: That’s great!

Collier: Tara thank you! Hey yours is too and by the way every pic, yours is so funny! That girl dances with a sucker all the time, she has a sucker all, her daughter is just the cutest little girl but she always has a sucker in her mouth I’ve noticed, but I don’t know I just notice these things you know?

David: That’s funny, man let me tell you something all right so we’ve got this, the Government shutdown I think most of it,  it seems to me is swirling around the Wall, they’re, they’re refusing to put money towards the Wall right?

Collier: Absolutely!

David: That, that’s the biggest.

Collier: Well yeah.

David: Thing they’re fighting over?

Collier: Well, Trump as the executive is saying hey I would like to have 5 billion dollars put towards the Wall, which is, it sounds like a lot but it doesn’t nearly cover it, I mean it’s not.

David: Well so, so, just you know it’s a funny thing, so the Government is shut down, what does that really mean? Because we’re not, everybody’s not staying home.

Collier: They didn’t put the lock on the door.

David: The, the police officers are still working right?

Collier: Absolutely!

David: We still have to have key things like that, so the Government.

Collier: Yeah.

David: Probably just takes some time off anyway.

Collier: Well, that, that sometimes we think.

David: What are we missing?

Collier: Things could be any other way, if everybody doesn’t know basically what happens every year, the Congress must approve the budget for the next fiscal year right?

David: Yeah.

Collier: And it comes in the form of 12 appropriations for 12 different sub-committees that are on the, in the House of Representatives right? ‘Cause they’re the ones that actually handle the budget side of the business, it will occur, a Government shutdown will occur this is an official definition if you will, will occur if the Congress is not passed remaining appropriations bills for the fiscal year or another what we call a continued resolution, well we call that kick in the can down the road right? That’s what Congress normally does, they just kick the can down the road.

David: So, they just decided if we don’t do this we can get some time off.

Collier: Absolutely! And.

David: By extending the holiday break.

Collier: Absolutely! And in a shutdown.

David: Perfect.

Collier: Right? This’ll answer your question federal agencies must continue all non-essential, essential.

David: (Inaudible).

Collier: Non-describe, non-discretionary, discretionary functions until a new legislation’s passed, now how would you like your job to be 1 to 1 as they said, hey you, hey you’re non-essential and you’re discretionary right? So in other words, these are things like the IRS, I’ve seen a lot of misinformation saying it’s closed, it’s not closed! There are a lot of people working there but anybody that, that isn’t responsible for just keeping the bare bones operating.

David: Yep.

Collier: You’re going home.

David: Yep and I tell ya we did get, we do have some updates, obviously this bleeds over into the mortgage business that and when you mentioned the IRS, one of the biggest things is most files we have to get were of tax transcripts, so it’s a part of verification of your income, so if we have to have tax returns in the file for self-employed people, rental real estate, things like that, then we need to go to the IRS and get a transcript of that tax return to verify that exactly what you gave me is what.

Collier: It’s accurate.

David: You gave them.

Collier: ‘Cause people never lie.

David: Right, they never lie so that stuff is not happening ok? The IRS is not gonna be giving us tax transcripts during the shutdown, now there are some work arounds around that, sometimes we can wave that requirement on some files that’s what we’ve done in Government shutdowns in the past, so that’s one of the biggest things. Now, we did get an update from the NFIP the National Flood Insurance.

Collier: Program.

David: Program.

Collier: Flood Insurance program.

David: Now they are funded ok? So, they are issuing policies.

Collier: Good, that is good ‘cause there was talk that they would be slowed down.

David: Yeah, big, big one that is not operating is USDA ok? So, any new files, any new ones.

Collier: Speak here in Alabama by the way, I don’t know if you’re in New York City if it’s a big deal but.

David: Yeah, in, in, in New York probably is, but not in New York City.

Collier: That’s right.

David: And you, new files will be need to be held until after the shutdown if you have a conditional commitment that it’s been issued, those can close anything that has not been reviewed will not be reviewed until after the shutdown’s over. FHA, most FHA is going to operate as normal ok? A couple of delays are in the reverse mortgage side, there’s actually part of the reverse mortgages that are on equity.

Collier: Oh, they’re, they’re phenomenal loans by the way.

David: And the condo.

Collier: Ah, I’m kidding.

David: The condos.

Collier: Ok.

David: Condo approval will definitely be delayed in most.

Collier: Well, condo approval explain that condos must be approved.

David: Yeah.

Collier: To be entered into the FHA system.

David: Yeah, there’s a list of approved condos and the condo development submits their paperwork to FHA, gets reviewed and approved for a certain amount of time and then it’s gotta be updated, any, any things like that is probably gonna be delayed, anything if the condo development is not already approved, but most other functions within FHA are going to be functioning as normal, so just a couple and really the main thing is just USDA that slowed down, there’s a couple of other delays possible.

Collier: Well and one thing to remember is that even though they’re federally backed programs, Fenny Mae, Freddy Mac, VA, they’re gonna be operating normally ‘cause the underwriting guidelines are Pretty clear, and they don’t have as much hands-on I believe right?

David: Right.

Collier: It’s not like y’all send it off to some VA.

David: The Don Jenkins, good to see you join us thanks for tuning in, I know we haven’t talked to you in a little while but great to see you tuning in to us, and Scott Sterns.

Collier: The legend.

David: Our buddy, the legend yes! Buddy the Elf, just missed his.

Collier: I hate I missed that.

David: Oh yeah, all right so moving on interest rates right now were to 4.55 on average and again every week I get this from Freddy Mac mortgage market survey, 4.55 on a 30 year fixed, 4.01 on a 15.  

Collier: Hey, when you were on your cruise we were at 4.875 roughly, if that tells you something.

David: Yeah.

Collier: So, about a month ago.

David: Yes!

Collier: I hate to make you feel bad ‘cause you’re, it’s already been a month but.

David: Well, I wanna talk about you ‘cause, you know people right now think rates are so high! You know when you quote 4.875, quote 5%.

Collier: Especially the younger ones.

David: Which we were for a decent part of the year.

Collier: Right.

David: People would, would have these reactions like wow! Why is my rate so high? Listen, historically in the ‘70s rates, average rates in the ‘70s was 8.8, in the ‘80s was 12.7, in 1980’s average interest rate was 12.7, in the ‘90s was 8.2 and in 2000 6.29.

Collier: I think it’s fascinating that, that so many people forget that 6.29 or that we were 7%, 8% and don’t tell me about them warehouse lines people we’re taking, you know the more you go to these mortgage brokers that about how y’all call them.

David: Yeah.

Collier: The, the, anybody can get a loan they were charging 3 percentage points on the front end and 2 on the back and, God knows.

David: Well yeah those were, yeah those were different kinds, types of mortgage projects offered.

Collier: But, but, but, but we were.

David: By different investors yeah, yeah.

Collier: All right.

David: And look, another thing I wanted to talk about I didn’t wanna bring up the, good to see Frida Williams and Courtney Harvey tuning in.

Collier: Oh Courtney, a legend too.

David: The Fed ok? The Fed raised rates last week man, and we have seen so much volatility in the stock market, we have seen Jim Kramer, President Trump, all kinds of people belly aching about what the Fed is saying and what the Fed is doing and I just wanted to share with you guys, this is the 9th rate hike since late 2015, December 15th is when they started off.

Collier: And let’s talk, when he’s talked about rate hike once again we say it every time, but here’s some of the Fed funds rate not.

David: Yeah the Fed funds.

Collier: Not mortgage rates.

David: The Fed funds, guys and these are related ok? So, the Fed kinda controls monetary supply by raising and lowering this rate, the reason the rate had come down so fast so much was to stimulate the economy coming out of the housing crisis.

Collier: Got ya.

David: Right?

Collier: Right.

David: So right now, we’re rationing back up and they’re trying to choke the economy back out, I know it sounds weird but they are trying to slow the economy down to avoid inflation on the other end, it’s just a.

Collier: If you, you know one thing I always think back to when I hear all this, you remember taking economics in, in.

David: I hated that class.

Collier: Yeah, yeah, right and you would hear the professors talk about there’s really 2 schools of economics Keynesian and I forgot the.

David: Yeah.

Collier: One other one and there’s macro and micro.

David: Yeah.

Collier: There’s really 2 sets of economy and that’s, and that’s what’s at play here, it’s 2 different schools of thought on how to solve this problem right?

David: Right, because everybody wants free money and everybody wants to boom the economy, but I guess on the other side of that people don’t realize that there is inflation, there are problems ‘cause things can’t just go up forever.

Collier: Well and I think too, you have 1 side with the Fed funds chairman and specialists going I’m the adult in the room and I, this is the way it needs to be handled and then Trump’s and many people’s school of thought is the child in the room going but No!

David: Yeah.

Collier: I want that free money!

David: Right and Trump does not have a tactful way of getting his point across.

Collier: Not the stodgy old guys that are running this.

David: But I think he’s got a good point and what, and the guy that I do love is Jim Kramer, Jim Kramer’s been very adamant about the Fed doing too much and saying the wrong things.

Collier: Well and Kramer, one thing Kramer hits on there too is that the Fed, Larry Cudlow.

David: Yeah.

Collier: He and Kramer are hand to hand, Kramer says that you might like Trump, but Larry Cudlow who’s actually the, the brains behind that operation at the White House is a smart guy and knows what he’s doing.

David: Well and I don’t wanna get too, too deep into this, I know a lot of people may not get as excited about this stuff as I do, but the outlook for ’19 was.

Collier: Exotic yeah.

David: Three more hikes in ’19, they have since changed that down to 2 ok? And they have also said that the, now this is since October ok? This is the December statement, the last statement was in October, we have seen softening relative to what has been seen a few months ago or what was seen a few months ago.

Collier: Right.

David: Ok so, they’re already starting to change their story, I really think they’re bracing for a lot less movement next year.

Collier: Man crush, what can I say?

David: Wow Nick, Nick Lindberg.

Collier: Yes, Tara’s husband.

David: There you go, but, but I’m telling you I’m thinking that the Fed is going to have more of a wait and see data dependent view next year, which for everybody in the real estate game is a big deal.

Collier: It is.

David: Because you want the Fed to calm down, you want them to stop moving rates, we need rates to stay where they’re at for a little while, we need inventory to come back in, just don’t mess with buyer affordability at all, let’s leave rates where they’re at, bring some houses into the market and kick off a good.

Collier: And let’s raise, let’s raise salaries, let’s put more money where, where the Republicans have always been right, in my opinion is well 2 things, one is when we lower taxes.

David: Un, un, unfortunately, I don’t think that’s gonna be possible but.

Collier: Ha! We lower taxes we end up, every time we lower taxes we see wages rise from the bottom up right? And then, the other thing we see when you do that is employment itself skyrocket and.

David: Yeah.

Collier: The Government takes in more cash.

David: And, and the funny thing is that’s what the Fed is trying to stop, they’re trying to stop wage growth, they’re trying to stop those increases because if, if companies, if the economy slows down companies can’t hire, they cannot.

Collier: All right.

David: Continue to extend raises.

Collier: They don’t want to right?

David: They don’t want to.

Collier: And, and it was in the argument too that a lot of these businesses have easy access to cash.

David: Yeah.

Collier: Via loans.

David: And if you’ve seen how much the market, stock market has been swinging here lately then you know the Fed has, is doing their work the economy is turning.

Collier: It is and it too, and you say one thing I’m excited about in the real estate world is we’re gonna get a lot of these part-time agents you know, we’ve always operated as a full service team, as a real business and you get a lot of these part-timers that are not serving the clients well in my opinion, and because they’re just not in it everyday and hopefully this’ll push a lot of them out of the business.

David: Well and I, I just wanna make sure that everybody understands that an economic slowdown or a recession is not a housing crisis ok?

Collier: Oh yeah clearly.

David: The last one, everybody, everybody’s associates a recession with a housing crisis and this is not what’s going on here, that’s not gonna be a part of the recession, a part of the economic slowdown this time around.

Collier: All right.

David: And.

Collier: And.

David: Ok?

Collier: That’s correct, Lisa True bringing it! But anyway you know one thing, I wanted to talk about was 5 reasons houses don’t sell in a strong market you know it’s funny, I was looking over my list today and I was looking at all the houses we have listed and went oh Amen this is people’s biggest assets.

David: Yes.

Collier: Housing she’s talking about.

David: Yeah absolutely.

Collier: Five reasons they don’t sell, you know what sucked is that if you’re in this market with high demand, low inventory, all you gotta do is 2 things price it right and be in good condition, you’ll sell pretty easily.

David: Yeah.

Collier: But that is the first reason and it’s called price.

David: Price, pricing is the biggest deal and people get emotional and everybody wants top dollar right?

Collier: I can’t tell ya how many times I hear somebody going well let’s just give it a shot here! It’s only worth 400 but some sucker’ll come along and give me 500.

David: And you hear it.

Collier: Cash.

David: You hear it on both sides, you hear it pricing it, overpricing it and you hear buyers coming in wanting a huge deal, let’s, let’s low ball ‘em, that’s crazy.

Collier: (Laughter), yeah hold on, yeah so they think, sellers think it’s only on their side this could be done.

David: The buyers think is only on their side.

Collier: Buyers think is only on their side (in unison with David).

David: Yeah, yeah.

Collier: So it never works and so then they wonder, then guess who they blame?

David: The realtor.

Collier: Absolutely and you know one of the problems is that we lose some listings on the front end of this, ‘cause we’re honest with them and say you can’t do that, you’re gonna sell ‘cause I’ll, I’ll gladly be your second realtor when, when you’re ready to actually sell you know and I’ve seen more couples argue.   

David: Let you sat on the market for a little while.

Collier: Absolutely!

David: Yeah.

Collier: Because I think it’s important to remember that, agents have to sell at first to a, a buyer and then to an appraiser for you guys.

David: Yeah.

Collier: ‘Cause you guys for some reason don’t like over pry when they, when they don’t appraise y’all don’t let us get the money.

David: Right yeah, the appraisers got to go out and look at the house and come up with that value, but that’s why a lot of realtors will pull the comps early on at that listing appointment and say hey here’s what, here’s what around ya, here’s where you should be and here’s what I think you know we could probably list it for and there’s always that gap between list price and sale price, I mean real estate agents know these things so you need to trust.

Collier: Trust what you’re saying.

David: Trust that advice right?

Collier: Yeah, especially if it sounds right if they’re to push you and we’re not afraid of pushing this in the market, but the problem is these appraisers aren’t liking to push very much, they.

David: Well.

Collier: They’re nervous.

David: And I think a lot of sellers don’t wanna hear the reality and that reality is going to be the same over this next 3 to 6 months in this market in 2019, you’re gonna be hearing the price, you need to be concerned if you’re not gonna have the same multiple offer situation that we had last March 2018.

Collier: Right.

David: March 2018, what we had? 14 offers?

Collier: Right.

David: I mean.

Collier: Oh, tons it was huge!

David: Two hours on the market.

Collier: Absolutely, now look at us right?

David: It’s not gonna happen!

Collier: Well you know, I told a seller the other day I said man, ‘cause he was really kinda making me mad you know? So I said hey, I’m, I’m, I’m in the, you think I’m a realtor but I’m really in the moving business, my job now is to get you out from the state of denial into the state of reality.

David: (Laughter).

Collier: Because you crazy.

David: Right.

Collier: And you’re wrong.

David: Yeah (laughter), not said that way but.

Collier: Well it was pretty close.

David: Yeah.

Collier: But next is you know, condition of the house.

David: Yeah.

Collier: Look, Holy Pete! Who runs most of these houses the kids or the parents in terms of the condition? I mean.

David: Well hopefully it’s gonna be the parents right?

Collier: I mean it is just crazy and the other thing they do is they sit there and they go you know, we’ll wait on updates and repairs, what a buyer will be able to see right through that we’ll just hope that they won’t notice.

David: Yeah.

Collier: Or they’ll just take into account and take a thousand off the price, well not to mention that these repairs and updates will take 10 thousand, but they’re only gonna take a thousand.

David: Yes.

Collier: Right?

David: You know and that but, and the buyers money they’re already bumping that thousand to 2 or 3 thousand so each, each thousand that you thought you were gonna knock off.

Collier: (Laughter).

David: They’re knocking 2 or 3 thousand off so.

Collier: And this and remember, remember the whole topic here is starting over when your house is not selling in this market so, it’s probably the condition to apply the price.

David: Condition is one of the problems if it’s not selling.

Collier: Right next one, sellers’ motivation right? Are they really motivated to sell?

David: Yeah and hopefully they will be and that, that’ll go along with the price I mean you know if they price it aggressively then, then they’re motivated to move, they’re probably gonna have a lot more traction, a lot more activity on the house if they are not that excited about moving and they price it incorrectly, they probably don’t care right? They’ll probably sit on it for 6 months through that first realtor, get frustrated, fire them and then hire another one, drop the price and sell it.

Collier: Absolutely!

David: And then they think it was the realtor right?

Collier: And you know one thing I tell our agents you know sometimes, and other agents that I come in contact with is find out, make sure you’re communicating with both spouses right? That are in.

David: Yeah.

Collier: Involved with sellers because a lot of times information, they’ll be one side that does not wanna sell if you’re talking to that person I guarantee you, the advice you’re giving is not getting through to the motivating.

David: Yeah.

Collier: Party of the 2.

David: Yeah.

Collier: ‘Cause remember every relationship has a nerd and a free spirit, I love the free spirits ‘cause they’re the ones.

David: And you gotta.

Collier: That wanna go.

David: And you gotta have the decision maker.

Collier: Right, marketing plan is the next one right? He, I don’t know what the saying is but, he who has no marketing plan stinks!

David: Yeah, you gotta be able to promote that house online and get it out there, get it in front of people, you want buyers to see, you want buyers to know that you’re selling something.

Collier: And, and I cannot tell ya how many times I see still, iPhone not even iPhone, phones like you have what, Android?

David: It’s a beautiful Google XL 2.

Collier: It’s awful, if Courtney’s still listening please iPhone but anyway, here, here, here’s the thing is that if you’re taking pictures of your house.

David: (Laughter).

Collier: With a phone, we have problems.

David: Oh, my camera is way better than your iPhone.

Collier: Oh, this guy, but, but my point is if you’re using my iPhone to do it.

David: For Facebook live.

Collier: It’s the wrong one to, well for Facebook live we are, but, but for photographs pay for a professional photographer, make sure you’re getting some portion of video out there especially if the house is worthy of it.

David: ‘Cause man, a lot of, a lot of buyers are gonna want, a lot of buyers are gonna yeah they refuse, I mean it’s just, I’m too far in now.

Collier: Wait what are you, what point are you proving by having that phone?

David: There’s no, there’s no point, you don’t have to be an iPhone follower, you don’t have to be an Apple cult.

Collier:  Oh no, but you can have a phone that works.

David: You don’t have to join an Apple cult.

Collier: Oh that’s funny.

David: There’s only one thing that it doesn’t do that I know of.

Collier: What? Facebook?

David: Facebook live (laughter).

Collier: Call me crazy.

David: (Laughter).

Collier: If you even saw last week’s attempt, but by the way with the best part was I could get you dad on.

David: Yes.

Collier: But I couldn’t get you on.

David: He’s got an iPhone.

Collier: So I asked David.

David: He’s got an iPhone.

Collier: Yeah, I asked David and I said let me guess he has an iPhone.

David: Yeah, yeah.

Collier: Yeah, so anyway.

David: Correction.

Collier: The last one is and I think this transfers over to the mortgage process.

David: Say the people manipulated the process yeah.

Collier: (Laughter), all right before we digress, it’s the same thing that went into the home buying process with their lender, it’s the same thing when they’re trying to sell their house with our agent and it’s a lack of communication and one of he best things it, please don’t just go fire that person you probably have been asking the wrong questions.

David: Yeah, you’ve got.

Collier: Or not communicating at all.

David: Yeah, any time you’re frustrated you need to air that out and tell ‘em what your concerns are you know, if, if they’re having others agents look at the house, they’re getting feedback, hopefully they’re sharing that feedback with you that’s part of the communication plan right? If they’re having you know obviously, every time a buyer comes in and looks at it, hopefully that other agent is saying hey they didn’t like the red room or you know.

Collier: Just tell us the feedback right?

David: The toilet, the toilet was running.

Collier: Yeah.

David: I mean whatever, those, that’s, that’s the kind of communication you wanna have.

Collier: Yeah and you wanna be proactive about and your agent should too, this is not taken in Birmingham but even in your line right? If you’re wondering you, if you’re saying I think in this environment, let’s say it’s USDA coming in right? And you think David’s taking extraordinary too long of a time, you need to say hey David why is it taking long? ‘Cause there’s a, there’s a real answer behind that, which is the shutdown has now stopped new applications and I, and he may or may not have told you but now you have an answer instead of getting, ‘cause the longer I mean this isn’t anything though really, but the longer you wait to ask that question of communication, the more mad you’re gonna be about it right? And then you start thinking every possible scenario and this is an easy answer that everybody can understand, hey.

David: Yeah.

Collier: It’s impossible.

David: Absolutely, absolutely! So moving on, we’ve got the stock market in 2018 has been a little crazy, I think it’s down.

Collier: Close to 20% now right? Or a little.

David: Yeah I think, I think we ended up, we were up 25% in ’17 now we’re back to the summer ’17 levels, I think we’re about 22, 23 thousand, yesterday we had a thousand point surge, today down 600 at 1 point finished up 200 you said?

Collier: 200, 200.

David: So I think, we’re still hovering around 23 thousand which would be down a little less, a little around 10%I think for the year so up 25% in ’17, down 10% so we’re back to summer levels of ’17, it’s just been a lot of movement and a lot of volatility here lately and I think is around these, the interest rates and what the Fed is doing with the market and things like that, I think that’s.

Collier: Confidence right? It’s the, it’s the confidence in what’s gonna happen, the other one is the, again these trade deals we’ve talked about with China, China is the big behemoth in the room and you, and we all wanna say this is boring what, but it affects everything you do from the price of milk to getting a mortgage loan, to your, your 401K for sure.   

David: So, there’s a few things that we’ve figured you guys can still do even though the stock market’s been crazy, do you have one?

Collier: Yeah because here’s the thing ‘cause everybody’s sitting there going what do I do and frozen right? So number one.

David: So number one is avoid overreacting ok? Stocks are going to rise, stocks are going to fall, the biggest that, that I think to notice when a stock falls like this if you own a stock right now and the stock has dropped, then you need to look and see what, what is the factor, has the company changed? Are they losing money or is the business model failing? Anything like that, do they, do they lose lights?

Collier: (Laughter), he, he forgot to pay the light bill again, there we go got it back on.

David: So we gotta look at that right now, these are market, the whole market’s down so it’s not necessarily that Amazon’s having a problem, but Amazon’s come down.

Collier: Well you know it’s funny, one of my favorite advisors.

David: You hang on to it.

Collier: Well and one of my favorite advisors here is Courtney Harvey right? You know so I texted her that oh man, oh man what are we doing? I, I gotta get back in and you don’t and she said hey basically her response was long term, I’m just, I need to see what’s going on be calm, and one of the biggest pieces of advice we have in this one is, is control your emotions and that’s what she does.

David: Yeah.

Collier: And I don’t do too well with that all the time.

David: Oh absolutely, absolutely, you’ve gotta, you gotta make sure that you own quality companies, understand the, own quality stocks, understand the company all right? And then make a decision that company’s still doing good, the stock will come back ok? This is a market function not a, this is a market problem not a company problem.

Collier: Yeah hold on, yeah see I, I think that’s one thing we all gotta look at, take a company I’m trying to think of a good one, I love Royal Caribbean so I’ll take that definitely, profits are great, everything’s great about the stock, but it loses a ton of value what, 15% over the last.

David: Matter of fact, I did some numbers on Royal Caribbean on Thursday or Friday, last week I believe and their net income is, has gone way up from ’14 and ’15 and then shot up in ’16 and ’17.

Collier: Net?

David: So they’re looking, they’re looking really good.

Collier: So, so they lost all this money that had nothing to do with the underlined fundamentals.

David: And the stock has, has gotten killed lately from a 130 a share down to around 98 I believe?

Collier: Well it’s lower than that now.

David: Or 90?

Collier: It’s by 94.

David: 94? So.

Collier: But.

David: That’s a big drop, it’s something that most people would be concerned with, but it’s not.

Collier: Well here’s one.

David: It’s not a problem with the company.

Collier: One thing to remember, 85% of all trading that occurs right now is done by computers and is, in other words is not somebody inputting it, it’s, it’s, it’s.

David: It’s an algorithm.

Collier: Algorithms that are going hey Renee this goes here, Sal this goes here bye, so it, it force you, I think it’s what happens when everybody buys, everybody else goes oh it must be great, so we all buy and then the computer’s the first one to under cut you and sell it again and that’s probably what we saw today happening.

David: Well listen, those algorithms trigger a lot of, a lot of trades which just happen all at the same time and (very short pause) affect the market and it’s hard to figure out, if that’s really based on something or I think it’s just levels that, that these algorithms are triggering so that’s that’s tough to, to spot but it is a part of the market.

Collier: It is.

David: Number 2 though we gotta prepare for a bear market right?

Collier: Absolutely! And you know you need to own stocks that you wouldn’t mind owning in any market right? That these are the ones we’re just talking about, your Procter & Gambles, the, the ones that have things that people use every single day, that have Royal Caribbeans and other one right? They pay a good dividend that’s the other thing, it’s making sure dividend paying stocks can save your keister right?

David: Yeah.

Collier: As they say, I have, I’ve talked about it on here many times, the PIMCO, PCI, it’s a, it’s a fund from the PIMCO family, it gave me about an 8 and half percent dividend this year, of course it lost about 8 and a half percent.

David: So it broke even.

Collier: It broke even but it, it protected me.

David: Now yeah, and so in a bull market stocks go up, in a bear market stocks go down and I think we’re just at the beginning of this, all, all the volatility I think is, is signaling the change in direction, I, I think still and I know we mentioned this a few months ago that if you have a regular savings plan for stocks, I think that you can continue that, but to hold more cash, put less in the market at this time and in 3 to 6 months intervals later on down, after the market has come back some more, then kinda start leveling more and.

Collier: And strategically, be adding to your positions in this market though because I think that when you add lightly to your positions you’ll feel better, ‘cause you, because the worst feeling is getting what next year you know, let’s say Jim Cramer in ’94 and he said 138, you’re gonna be going why didn’t I add? Just add a little bit.

David: Yeah.

Collier: Don’t, don’t, you know go all in.

David: Yeah.

Collier: With everything.

David: And number 3 is don’t focus on the short term, it’s a long term game so if, any money you invested in the stock market and the stocks, you probably wanted to be there for 10, 15, 20 years, think about where the stock market, the DOW, these industries were 10, 15 years ago much lower than they are today right?

Collier: Absolutely! And.

David: And they’re gonna be much higher.

Collier: And remember there’s some real value and it’s a-shifting too, I heard Clark Howard talk about this too you know, we say buy what you know if, if you’re Warren Buffet
Now, now he’s one of the rare ones but we are shifting what we know, what you know it’s no longer ‘cause there’s a lot of tech stocks that a younger generation’s gonna actually know and understand, obviously I’m like you and I that bought some snaps, Snapchat well but you know.

David: It’s a buyout play.

Collier: Yeah.

David: Very big money, just kidding I don’t know.

Collier: God I hope so, I’ve lost like 60%.

David: Right.

Collier: And I thought about and by the way I bought at 20% or so below, where it came out and hit the market but anyway, next everybody’s favorite part! Martin Lehrman’s favorite part it’s the college football picks!

David: If you had Minnesota last night, you would’ve won big!

Collier: Yeah, it didn’t take much last night for them to win big.

David: So we’ve got and that was Paul Johnson’s last game, last, last game of the triple option so, Jeff Collins coming in next year he’s got about 12 running backs on scholarships, so we’ll figure out how he.

Collier: Y’all have a tough time ‘cause you guys actually have to pass real school.

David: Now we’ve got a lot of, we’re gonna have a lot of players keyed up for the triple option and he’s gonna have to turn into different systems.

Collier: Oh.

David: So that’s gonna be interesting.

Collier: All right, your dad’s favorite team.

David: Texas?

Collier: Georgia.

David: Versus Georgia, Texas plus 13 versus Georgia in the Sugar Bowl.

Collier: Who you got?

David: (Very short pause), oh I gotta go with Texas.

Collier: Well that’s just ‘cause you like ‘em, I will too though

David: Florida plus 6 versus Michigan in the Peach Bowl.

Collier: Well go Blue! This is, this is one that I feel will be a route by, why I say route, this’ll be a.

David: Michigan.

Collier: Two touchdown game yeah.

David: Yeah, you know these, these type of ball games are gonna be tough for which team wants.
Collier: I don’t think Florida has beaten Michigan if I understand right.

David: Perdue plus 3 and a half versus Auburn in the Music City Bowl, Auburn is guaranteed to lose!  

Collier: Yeah well let me just say this, last year we had to play against a 1 armed guy.

David: You talk.

Collier: Right?

David: You talked about it.

Collier: We did right? And everybody’s going oh you’re playing against some 1 armed guy, we’re gonna lose to that and God bless is Tyler Trent, who’s dying of cancer, it’s a, it’s a terrible story.

David: He made it to the NFL that guy.

Collier: No, no that guy did Tyler Trent is in the hospital, I’m just telling ya Auburn (laughter), we can’t win in for losing!

David: Plus y’all can’t.

Collier: That kid’s gonna inspire ‘em to victory.

David: Yeah.

Collier: I’m going Purdue plus 3 and a half.

David: Yeah, I guess Malzahn’s not gonna get you all excited.

Collier: Hey Nick Limbird apparently didn’t hear us, oh he did hear us he’s questioning.

David: Texas is gonna hang with Georgia, Georgia’s they’re calling it in.

Collier: Yeah I think so too, I mean.

David: I don’t, I don’t like Georgia, Nick I can’t help it I’m a Georgia Tech guy.

Collier: Hey, he’s, he’s got 2 teams, he’s Old Miss and Arkansas.

David: Yeah.

Collier: Then he, hey 2 power houses.

David: There you go, Perdue is gonna kill Auburn ‘cause Gus is gonna have those guys sleeping on the bus, Notre Dame 12 and a half versus Clemson in the Cotton Bowl semifinal.  

Collier: Look that, look is taking side bets ok.

David: I’m not sure about the line but Clemson’s gonna win the game.

Collier: Yeah, yes, yes but if ever there was a time to screw us Auburn fans ‘cause you know for us, it’s all about Alabama losing at this point, nothing makes Alabama win easier than Notre Dame beating Clemson and Alabama playing and crushing Notre Dame, ‘cause Notre Dame will have no chance against Alabama so guess what? I’m taking you said right here, oh he said both are Bowl eligible hey.

David: That’s right, Old Miss and who did you say? Arkansas?

Collier: Arkansas wasn’t Bowl eligible neither is Old Miss.

David: They might’ve been in.

Collier: No, no, no.

David: Minnesota made it 6 on 6!

Collier: Old Miss was on probation but anyway.

David: Oklahoma.

Collier: Hold on, hold on, I haven’t told you this it’s Notre Dame on the money line, Notre Dame wins this game outright and screws all.

David: Oh!

Collier: The Auburn fans and we have to listen to Gus and all that stuff but anyway, Notre Dame beats Clemson they’re gonna to finals against.

David: Oklahoma plus 14 versus Alabama, Alabama is going to win depending on the quarterback situation, Oklahoma plus 14 is gonna have to be somewhere around 40 or 50? I mean they’re gonna score 30.

Collier: Look.

David: Oklahoma’s gonna score 30 at least.

Collier: Yeah look, Alabama.

David: Alabama’s not covering that line, they’re gonna win though.

Collier: Yeah, the problem is there’s no defense on one side, so Imma take Alabama to win by 17 points, they’re gonna BARELY cover! So if you can get a hook, get it to 13 and a half Alabama wins the game big!

David: Alabama’s gonna win, Clemson’s gonna win, then there’s gonna be a big game Alabama-Clemson.

Collier: Alabama Notre Dame for in the finals.

David: No way.

Collier: Yeah ‘cause I mean, ‘cause then Alabama’s you’ll hear it here first, Alabama’s gonna roll and we’re gonna have to hear about it for another.

David: No year, year first.

Collier: O God, for their 48th National Championships so they.

David: Forty eighth.

Collier: Man anyway.

David: Well listen, 2018 this is the last show of the year, it’s over and you guys have a Happy New Year! Everybody be, be safe, be careful out there, it’s been fun though huh?

Collier: And have a cold beverage absolutely and thank you for everybody for supporting us over the year ‘cause we’re on, we now have launched the podcast edition on apple podcast, Google podcast, wherever you find great pod!

David: And we are kind of a big deal, even, even if Carin Charles shows up late.

Collier: Yeah.

David: We’re still a big deal.

Collier: Appreciate her showing up on time here.

David: But I mean, she’s a, clearly one of our biggest fans.

Collier: Yeah clearly, but anyway we’ll be back same time, same place next year!

David: Next year.

Collier: Next year, next Thursday!

David: Gus Busters’ on fire!

Collier: Oh it is on fire, it’s a dumpster fire.

David: Yeah (laughter), it is a dumpster fire.

Collier: All right see you guys later! Happy New Year!

David: See you guys!

Collier: Bye bye!