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Five Things You Need to Know: The Price is Right, Illiquidity of Real Estate, Wag the Investment Dog, Back in the Day, Bluto Blutarsky

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The absence of unlimited personal guaranties in a real estate deal is the only leverage an investor has vs. its lenders.

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Editor's Note: While we congregate in Vail for Minyans in The Mountains 3, we asked each Professor to prepare some thoughts on fiscal literacy, how to listen to the market and their area of expertise.

1) Profits in real estate are created when buying at the right price. The sale process merely monetizes the gains.

2) Unlike other markets, the illiquidity of real estate can create periods when there are no buyers at virtually any price.

3) While residential real estate speculators may be a minority of overall buyers, they inflate and dictate prices for all market participants.

4) It rarely pays to the let the "tax benefit tail" of real estate wag the "investment dog."

5) The absence of unlimited personal guaranties in a real estate deal is the only leverage an investor has vs. its lenders.

Random Thoughts

  • When one is young, all things look bright and full of potential. As one grows older "things were definitely better when we were growing up." Later in life it turns out that things hardly ever changed, except as to how we perceive them. Is this true of markets as well?

  • From 30,000 ft., the decoding of the human genome / genetic engineering is to biotechnology what "broadband" is to digital media distribution, only the former might actually do some real good in the end.

  • This has been said hundreds of times, but not enough IMHO: in secular bear markets the Minx behaves so that bulls and bears feel a world of hurt.

  • Over the last 2000 years the average "civilization / empire" has lasted approximately 300 years, two-thirds spent ascending in power and influence and one-third spent declining into submission and – at times – disappearing. The U.S. was born 232 years ago. I believe it will prove to be the exception to the average, but not without some stern "internal" tests along the way.

  • Ted Kennedy? Tom DeLay? John "Bluto" Blutarksy? It would not even be close.
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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