Greed is the gas. Fear the brake.

Remember that and you’ll know more about investing and markets than nine out of ten people ever met. Houses, stocks, bonds, gold, no matter.

Now remember this: When greed prevails, sell. When fear rules, buy.

This, as you might imagine, is the mirror opposite of what most of your relatives, co-workers, friends and neighbours are doing. God help them. For they know not what they do.

So, an example. One year ago the cold winds of panic blew through our days. Financial markets and house prices were frozen. People feared for their lives and assets, and reacted in specific ways. There was, for example, an avalanche of mutual fund selling. At the low ebb of the markets, everybody wanted out, turning paper losses into  real ones, and missing the inevitable trip back up.

In the housing market, more humanity. In Toronto over 20,000 homeowners threw their houses on the market last January just as purchasers retreated. The result was obvious – it would take the better part of three months to sell a house, with buyers were in the driver’s seat.

Contrast that with today, when greed has replaced fear. Although buyers still swarm, active listings have crashed by 41% while sales increased 87%. That squeezed prices higher by a fifth, while the time on market plunged. So just as last January was the best time to buy and the worst time to sell, so this January was the best time to sell and the worst to buy.

See what I mean? Up is down.

Given half a chance, people almost always do the wrong thing. And they keep on doing it until the scales tip turning greed into fear or vice versa.

My thesis is we’re near such a tipping point and it will come in the next months. Soon it will be clear even to the federal opposition parties the economy still sucks. Without government stimulus drugs, we’d all be out hunting squirrels (which I do regularly). Taxes and interest rates will be higher this year, debt will continue to go out of control, and the US is heading into an electoral evisceration.

Canada’s gaseous, greed-infused housing market has – like the stock market last winter – only one direction in which to travel. And when it starts, it’ll be amid a general sense of malaise. That’s when many people will hear a little voice at night telling them they’re seriously at risk. What looked like a sure-thing, everybody’s-doin’-it strategy in March could turn into a run for the exits in April. Recent buyers, of course, will be trampled like so many squished spectators at Pamplona. Road kill, as I poetically put it in my current book.

By the way, house sales in Vancouver rose 187% last month over last January. The average house is now $788,499. The average SFH is over $950,000. The average family income is less than in Toronto. Does this seem, ah, suicidal?

But this is interesting. Listings last month up 40% from a year ago, and 139% from December.

Do you smell that? Could be rubber.