I just saw the news online that Warren Buffett just bought $3 billion stock in General Electric and $5 billon stock in Goldman Sachs. This is big news in the investing world. But during this sub-prime crisis it seems to be washed out. From the reaction of press I some how feel it’s not that an important news. Why is that?
I know everyone is concentrating on what the effect would be when the US government has passed the bill to bail out financial institutions. But in my opinion, people and the press are following on the wrong guy. Here is the question that I have for you: When it comes to investing, do you want to listen to the most successful person in the world in investing, or you want to listen to so called “advisors” or “experts” that are still working in their jobs for money, or politicians who never owned any sort of business before? I thought the answer is very simple, but because the press is hitting us everyday with bad news and conveniently forgot to mention what some of the real experts are doing. This gives most people the illusion that the whole economy is going down the tank. Don’t get me wrong, the whole crisis is bad, really bad, but not as bad as what they said.
Buffett once said that his investing strategy is to be GREEDY when everyone is scared. That’s exactly what he is doing right now, so it’s not a joke at all. That’s why our company is still trying to acquire as many properties as possible during this real estate buffet that you see once in your lifetime.
Buffett is having a buffet, so should I.
Tags: bail-out, cashflow properties, cashflow propertys, GE, General Electric, Goldman Sachs, real estate investing, stock, Warren Buffett
I have thought of this analogy yesterday and would like to share with you.
Let’s step back in time to 30 years ago in your neighborhood. If you would have bought “any” house for investment back then, wouldn’t it be a very good investment by now? Last year my parents sold their house in vancouver for $670,000. The same house was built for less than $40,000 back when 30 years ago. That’s about 2650% return. But the most amazing thing about real estate is the powerful “any”. You can buy “any” house back then and it will be a good investment.
What about stock? Yes, you can buy good stocks like coca cola. But how many companies that were big back then are still big now? Not a whole lot.
Here is the fundamental difference, a stock, or a company, needs to face many unknown risks and needs to be able to adapt to the market changes in order to be “possibly” successful for long time. That’s why there aren’t many stocks that does well and continues for a long time. But for real estate, a house is a house, it’s like that 30 years ago, and will continue to be like that unless you change the layout. Also, you can always insure your property against possible damages like fire, flood, or earthquakes.
But try talking to an insurance agent to insure your stock value, see what they will say to you.
Tags: cashflow, cashflow properties, cashflow propertys, real estate investment, stock