Gregmal

Isn’t this just indicative of concentration of wealth and wages for the majority of the population not keeping up with cost of living?

The biggest benefit of the mortgage is it allows the common man access to an asset they’d almost never otherwise be able to afford. If the housing market was all cash, or short term loans, first time homebuyers would have to be in their 40-50s. Even with housing prices drastically lower, how many people can come up with $200-300k cash before 40? In and of itself, that is peace of mind. 30 year, fixed. Equity grows, debt declines. In the instance of the 25 year old with an inheritance, who cares if occasionally the rent doesn’t cover the mortgage. You have one job, and that’s it. Make sure the mortgages get paid every month for 30 years. You don’t need to think about exact IRR or capital allocation. You don’t need to worry about appreciation. You just get the dang bill paid and assuming 0 appreciation over 30 years which is virtually unheard of in the US, you have a $2m nest egg 10 years before everyone else is retiring.

Well yes, a mortgage imo can be both an asset and a liability. I also think it can double as an efficient savings vehicle. If you are 25 and dumb and say inherited $300k I’d say go buy a collection of $2m worth of property with 30 year fixed rate mortgage. Rent it out. Your retirement at 55 is secured.

Companies can healthily take on debt at 20-30% net debt to EV. They can go 4x EBITDA. People can do the same if the know what theyre doing. Similarly having net asset value/cash while carrying a mortgage is pretty much the same as not having one except you have the benefit of liquidity and optionality. Mainly I think its psychological.

In this scenario, couldn’t you arb it? Like rent your primary with the super low mortgage, net money on the rent, and then instead of buying fixed income pay cash or heavy cash allocation towards a second place?

Office was never a great asset class and it was a joke to see 4-5 cap prints for the better part of 2014-2019. Meanwhile grade A grocery traded for 7-8 and warehouse near double digits. Both the Wall Street crowd, and the academics, just had no clue what they were doing because they were still living in the 1980s.

I think that’s an angle of looking at things that wants to retrofit bearishness into justifying a lack of investment. There has and continues to be plenty of reasonable value in the market.

Yea its a world class operation. Non traded REITs have existed forever. They're scummy vehicles, and they've always had redemption caps. I guess some of these folks just found out about them recently and cant process that a stock quote isnt a mark for a real estate asset, and that theres not really anything abnormal going on for the non traded reit at BX. Its also amusing because I dont see how one can whine about BX, without winning 10x more about BAM.

I have no skin in the BX game but this is a stale and lazy piece. A “journalist” asks “analysts” and people shorting BX for some edgy material…yawn. It’s flawed and ignorant and has been because it relies on two stupid assumptions. BREIT should be dependent on stonks for its valuation, and that BREIT = BX. Neither are true.

If you’ve got a decade I like the warrants way better

I wouldn’t have a problem with it. I don’t sell my time by the hour because it caps my potential. You want something done, you pay for it. Not some idea of how long you own somebodys time for.

The pre COVID and post COVID housing markets are two totally different things. The fact that builders didn’t built and younger people put off homeownership is why we’re in a market where the only way out is incentivizing building. Builders aren’t building more than they need to right now, because of rates. If rates drop and demand spikes they’ll lose all discipline

The Fed and many elitists will argue that the answer to that person being disgruntled about not being able to eat out, or it being more expensive to do so, would be to make it so that more people cant eat out and less people work at those restaurants. I dont even know how this shit flies. Well, I do, and again its because they can just say "inflation" and 90% of people dont question it or dig any deeper. But its crazy. As Ive argued before, by far, the biggest and most problematic inflationary impact on everyday people is housing being so expensive, and that is entirely because of the Fed and their interest rate crusade. If the Fed dropped rates back to 2-3% you'd see so many houses built that we'd probably have a sizable housing market correction in the next 3-5 years.

And thats fine. They've created certain words, like inflation, that people are conditioned to just accept. They say inflation, and people immediately think "ooh, bad"...If "inflation" is largely driven by expensive restaurants...so friggin what? No one is forced to eat out...I mean we act like its something that everyone is entitled to...but what about the people working at the restaurant? Theyre just trying to make a living. Theyre probably not going out to eat 2x a week. Its nonsense. The majority of the wage price spiral theory is invalid because as we got more industrialized, especially at scale, you can pump out as many of most goods as you want for little incremental cost. Obviously you cant produce more chefs and bartenders like that, but again, employment is good, not bad.

Uh huh. I mean its plain old manipulation and outright fixing the game by the ruling class when you get down to what it is at its core. Because who does what during the downturns? The lower end people have to complete for fewer jobs and often work multiple jobs. The middle class aspirer who's just able to afford the house or the car no longer can, and the rich people buy vacation homes and distressed assets like its Christmas...

Because workers have been getting screwed on wages for decades. Wages have not kept up with anything. So I think its total BS that a bunch of elitists now view wage grow as bad because god forbid its more expensive to enjoy the luxury of going to a restaurant or a bar...yeah, lets tank the economy to stop it...absurd. Its up there with them blocking the CPRI acquisition on the basis of people being entitled to $300 bags...where does it end?

This inflation fear IMO is kinda easy to write off. First, $75-100 oil really isnt anything special now going back almost 20 years. However every time oil prices fluctuate up 10%, a whole crowd of folks start raging on about it being proof of inflation. I think not. Otherwise, used cars prices seem to keep coming down. Ive noticed a TON of stuff at the grocery store, including the bellwether Pepsi products, all seeing price cuts. My insurance policies haven't shown more than 5% increases. Just not seeing much of anything to write home about. Housing seems stable. Inventory creeping up a bit should quell prices accelerating. Some people still getting raises? Good LOL. Seems about time people get on with their lives.

Too many monkeys in the market. Frankly I have no idea who in their right mind would be fretting a rate hike here. Inflation is nowhere near the FF rate.

Well, Mr. Mayor, looks like 8,380 dollars crossed the border into Checking Account today. Hmmmm, we got room over in Nintendo for em. They'll like the new Super Mario stuff about to drop. Ah, another 13,899 made their way thru just before dinner, whats the plan? Looks like theres some seats at The Garden available. But gotta be quick, thats been filling up lately, gotta move before its too late. Overall, we are pleased with how we are filling out the population of Portfolio City!

You just need to view your cash as migrants, your portfolio as a big liberal city, and yourself, the mayor. It comes in, and the first priority should be making sure its got a nice place to be housed. Dont worry too much about the exact room rates on the daily...over time it just evens out.

In general? Imagine being in Ukraine or America or any country for that matter, and some politician picks a fight or gets involved in a war and now YOU have to pay the price for them? Or go to jail? Fuck that. I mean I’d be cool saying, “if you voted for XYZ and XYZ gets you into a war it’s mandatory you fight”…but don’t make problems I didn’t ask for my problems. Let alone let them dictate my freedoms. And no, I don’t need a politician or media outlet to tell me whether or not my freedom is at risk by the “war”.

Isn’t this disgusting? A war started by a politician I didn’t vote for and don’t support means I either risk my life for a cause I don’t want anything to do with, or go to jail….true democracy!

The most “real” takeaway from 2022 imo wasn’t that inflation tanked stocks, it was already here prior, so that’s not it. It wasn’t rates, as we see now, market is expecting 1/0 rate cuts this year now and we re at 5000+ and we re cool with higher for longer. It was people gambling on a recession. When the recession proved to be just another scream and shout Fintwit product that never became real, markets recovered and volatility tanked. Further validating this was the peak in short interest in June/October 2022 and all those “fund manager surveys” which are great contras.

It’s funny actually thinking about when the top was I recalled @changegonnacomeconfidence termites perspective in q3 2021. And it really played out. The crap went first and the last to fall was the darlings, but that also should’ve been a sign that the turn was near, along with the rate cycle peaking. The turn then happens in reverse, the darlings came back first, then the middle of the road stuff, then the poo, but there’s still a lotta stuff that’s got room to come back and then of course, we need the poo poo and the IPOs to get favorable again. I don’t think we re at any sort of significant top or bottom right now. There’s actually a good amount of value imo, which then leads back to the whole, “what the point of 5-7% in fixed income” and “why not just buy stocks”.

1) because it’s not the 70s. There’s nothing comparable to what was happening in the 70s other than just blindly saying “inflation” happened. 2) I agree and thought the top for those not following the index was actually February 2021 when the spacs went first. I just get tired of seeing articles and reading about how “from Q4 2021 this or that” occurred. Or “negative real returns” in a vacuum when it’s like ok we occasionally have periods where everything stinks. It’s how the market works. If we wanna do “real returns”, bonds and cash from 2021 dindu nuffin either. Residential real estate is probably the only thing I’m aware of that’s gone up since 2021. And even there, it’s somewhat area specific although broadly safe to say done better than anything else. End of the day, I agree actually from HERE there’s some optionality in fixed income that is interesting. But I just don’t think it should be an investment philosophy. I get there’s a degree of “other risks” that come if you work in a field sensitive to overall macro, for a second in March 2020 I saw a picture that was infinitely worse than anything I’d ever dreamed up with stocks and real estate. But for the average person, this sort of guessing game is a waste of time and especially brain space. The only people whom should have a sub 5-7 year timeline are either sub 30 and trying to buy a home, or 55+ looking to retire. Everyone else? Just sit on your hands.