Like you I have been fortunate enough to have excellent mentors. One of them came up with a business model that will reach 10 billion in sales in a couple of years. He predicted a LONG, LONG time ago that the next really MAJOR recession in the U.S. would be in real estate – for a number of reasons I won’t go into at this point.
I don’t depend on r.e. either but have benefitted from it over the years. I have never been one to follow others over a cliff and I’m not going to start now. I bought my first house when I was 22. I’ve bought a few more since then. I’m very comfortable in analyzing the market objectively. I don’t get married to my positions and that has served me well. Until every speck of land is built on there will never be a housing shortage in the U.S. – you can take that to the bank. Diversification is my business and investment credo.
Just remember at one point up to last year one in every four homes was being bought by a speculator or professional of some sort. They controlled 25 % of the market and to a large degree the prices people were paying in having to compete against them in the market. That is a huge part of the equation removed from today’s buyer. They know there is no one ready to trump them within hours or minutes and can make rational decisions rather than rash ones thinking they will never have a chance to buy a home again. Hogwash.
The cost of gas,insurance,inflation etc. will continue to drive up the cost of your Italian meal over time. At some point it will be $19.95 and by then it may not be the value you thought it was. At least there is a rational explanation for the price increases (ingredients, labor etc.)and not speculation, flipping, interest derivatives, subprime loans or any other manipulative practices. Pretty soon you begin to look at other options. When sales slow or stop at your restaurant their prices may reverse or the business may eventually close. Until then bon appetit.
