Over the last few years, I have been paying close attention to the actions of Warren Buffett. His method of investing just makes sense to me. It is simple, and obviously very effective. In that vein, I have been paying close attention to some stocks of late. At the same time, I have been paying very close attention to Benjamin Graham’s book: The Intelligent Investor. Buffett calls it the “best book on investing ever written.” That alone should make it worthy of a read.

Still, I see “investors” (Graham would call them Speculators) in the market violating the fundamental rules of investing. Especially now, with the massive turmoil of the Sub-Prime fallout in the US, people are going to be making mistakes. You can view this as a bad thing. Or, you can view it as an opportunity to act when “Mr. Market” goes on a Bear market binge.

What with all the turmoil in the US Markets (That I commented on before) that is a result of the credit mess that the big banks put themselves in, it is only a matter of time before this crisis reflects back onto Canada.

However, Canadians don’t seem to be concerned about the value of housing here. Yet, in BC, we have the highest real estate prices in Canada. First in Vancouver, and the second highest in Victoria. No one I speak to seems to believe that housing prices can also go down, and I have been saying that they are bound to go down for some time.

Well, now we are seeing indications of the market going flat. This is important, as the market went flat in the US before it started falling. Also, our real estate market generally lags behind that of the US.

Now, you can make the argument that Canada will be fine in that we have a stronger economy, and are not involved in the Sub-Prime mess that the US has. This is true. However, when a market panics as a whole, people will follow suit, like lemmings. The downturn in the US will cause Canadians to panic, and start a selling fest, which will suppress prices, and cause more problems. Also, some of our big banks, like CIBC are involved in the Sub-Prime market in the US. That will have a tangible effect on Canadian markets, when the company giving you your mortgage runs into trouble because some of the investments it has chosen in other countries have gone bad.

Since our real estate market usually acts as an echo of the US, we will see the pain the most in BC, as our prices have inflated the most. A whole bunch of people seem to think that the 2010 Olympics will somehow preserve real estate prices. This is nonsense. After all, the Winter Olympics is a two week long sporting event. Two weeks. That, and it will have a limited range of economic impact, down to within less than 60 km from the actual event, yet everyone in the province seems to think it will have a buoyant effect.

The sad state of things is that in many areas of BC, it costs far less to rent than it does to own. In my area, a 450 square foot bachelor suite rents for about $650. A mortgage on a 450 square ft bachelor suite is $1200. The math does not add up. Things are out of balance, and they must be corrected.

The upshot is that those who are prepared for this turmoil will be able to take great advantage of it.

I now have a reliable bow stall in my Super-Ego… now just to get that in my Rad 195. I have been going to pool sessions to work on my edge control, and it is coming along in the Super Ego quickly. I managed to do a few flatwater cartwheels in the Super-Ego, which has really slicey edges.

When Dawn and I headed out to Tofino, I found that I could not get into my Rad 195 to surf! I had tried to move the seat forward at home, and I thought I had failed. It turns out I was successful in this. I had to pull out the foam bulkhead, and surf at Tofino without foot support, but the waves were small, so it was all good.

Moving my center of mass forward in the Rad 195 should help me with bow stalling it, and cartwheeling it. While the Rad is more difficult to perform these moves in, it has the advantage of much greater volume than the Super Ego. Thus, when I fully nail the bow stall in the Rad, I should be able to get close to the flatwater front loop fairly quickly.