Comments on: Invest to Win

by: Ken

Thu, 12 Oct 2006 21:47:43 +0000

The main problem I see with stocks is that all the information you have is based on reports or market experts. If you were an employee at Apple, do you think that you have an advantage in knowing when to buy Apple stock? What’s really going on at the top? Do you know whether they are making money or bleeding? I never did for my company as an employee.

When I buy real estate, I know what my numbers are. I know if my tenant is paying rent, I know my mortgage, I can calculate if my property is making money monthly. I can also improve my property by adding another unit, more square footage, increasing rents, new paint, etc… I have some control over how my investment performs. With stocks, I’m just pressing the “refresh” button hoping for it to go up another $0.25.

by: Jason

Thu, 12 Oct 2006 21:40:55 +0000

I’ve been thinking about the difference between REI and stock investing and why “don’t lose money” might work better in the stock market than real estate.

I think it is easier to lose money with a stock investment than a real estate purchase. In most real estate markets, your biggest concern is losing “real” money by failing to beat out inflation. With stocks, since everything is based on future earnings and not so much on underlying assets, it’s very possibly that your investment might lose you 50% or more of your equity.

Maybe I’m just saying this because of my own naivety with real estate investing, but that’s how it seems to me.

Another thought: is land a commodity? Is anyone trading land as a commodity? It might be difficult because there is more diversity in the value of land than there is in say… potatoes or “energy”, but if you classified things properly it might be interesting to trade land as a commodity.

by: Ken

Thu, 12 Oct 2006 21:24:49 +0000

REI vs. stocks is a whole another can of worms. I’ve had so-so results investing in options, stocks and mutual funds. My feeling is that I lose control of my investment when it comes to paper. I don’t believe that I can do as much due diligence with paper as I can with real estate.

But to answer your question, I do not think it makes a difference. When you invest, you should be investing to make money and not thinking about what if you end up losing money. If you’re thinking about that, maybe you shouldn’t be making that particular investment.

by: Jason

Thu, 12 Oct 2006 16:11:55 +0000

“Invest to Win” is a good mantra. I wonder how this relates to Phil Town’s Rule #1: “don’t lose money”, which is basically the opposite stance.

Does it matter that you’re focusing on REI while Phil is focusing on stock investments?

by: Joe

Thu, 12 Oct 2006 14:59:13 +0000

Great article. As a day-trader it’s unwritten law:The more you trade, the more you make.

by: Marcus

Thu, 12 Oct 2006 07:19:44 +0000

Good luck! I just appraised a place today (So. Cal.)that has a contract at $700,000 and three other listings in the project, same model, for $600,000. How could that happen, you say? Well, it’s been two weeks since the offer was written and in that two weeks three different “investors” have decided that they don’t like paying $5,000 a month for a $1,800 per month return.

The “investors” that got out three months ago look like genuises. The ones who hung on are having their butts handed to them on a plate.

Good real estate investments make sense -before- considering market trends. If the values go down they still make sense and if values go up, there’s your icing. But don’t try to sell me on the idea that you, or anyone, knows where values are going. It’s a crapshoot.