Common sense is not so common.
Here's my "common" view:
Something is changing in the world. What is it ?
I too was enraged this weekend at the stock market collapse, the UK
riots, the Greek riots, the Syrian riots and all the capitalistic greed
that caused so much money to disappear from real estate investments such
as Shire, Concrete Equities, Libertygate and the increased difficulty
we face raising money into our fairly safe and still quite lucrative
investments due to recent changes in the exempt market.
Something is changing in the world. What is it ?
I think it is the realization that a) democratically elected officials
cannot protect us any longer and b) that Wall Street and its extension
does not provide benefits for investors anymore.
People across the developed world are starting to realize that the
welfare state, the reliance on public healthcare, clean financial
markets, safe investments, guaranteed pensions, Freedom 55 doesn`t exist
anymore ! The `state` is not all powerful and gives us far less
benefits we hoped for.
To the second point,
read this article
here by Mark Cuban, the billionaire owner of the Dallas Mavericks on
`What business is Wall Street in`. The ONLY parties that make money in
the financial industry are traders and banks, trading on extreme
volatility, borrowing money at next to nothing and lending it for 3.5
to 4%. Why risk lending to a small software start-up or a small real
estate land deal or retail outlet if one can make money almost risk
free.
The financial industry is systemically flawed when for TEN YEARS the
market is essentially flat .. from a DOW Jones of around 9,000 to now
around 11,000 .. a 20% total return on the index and that is before
mutual fund fees of 2% or so per year. Thus: ZERO return if you had
followed your advisor recommendation of buy and hold. Marginally better
on the TSX where you could have eaked out a 40% ROI in 10 years. So that
is the new reality: 4% in stocks ! Don`t believe in all this 7-9% stuff
if your in the stock market. Your financial `advisor` is making money,
your stock brokerage firm is making money, your bank is making money,
but you do not. But hey, 3 out of 4 ain`t so bad ! Why change it ??
Well, you have a choice: continue down that same insane path of
`investment` or try s.th else. Why not co-own some land or income
producing real estate in one of the most advanced and prosperous parts
of the world, namely W-Canada. We have what the world wants: oil, gas,
coal, wind, water, uranium, potash, agricultural land, clean air, space,
scenic beauty, less crowds, low debt, low deficits. W-Canada has high
levels of in-migration due to very strong job growth. Our rents in
Calgary and Edmonton are going up .. and after only 2-4 years of
ownership we have sold a portfolio of 4 buildings in Yorkton, SK at an
enormous profit. This deal went unconditional last week .. well into the triple digit on the cash invested !
We continue
to believe that opportunities exist in the right markets, such as most
cities in Alberta, for apartment buildings, land held for development or
for select construction projects. These projects can produce far higher
returns than the stock market if they are well selected, impeccably
managed and its values skilfully amplified.
Opportunities exist if one is prudent !
How can the poor uninformed general public make money when the professionals want 2% in fees! (very close to RE fees for those that haven't noticed!)