Commercial Real Estate Finance

Posts Tagged ‘lottery tickets’

Most real estate professionals operate in a particular asset class because it is the one they know best.  Whether they happen to have been exposed to it first, or cut their teeth on it through experience, it seems to hold true.  But lets be objective here for a moment.  After having suffered what seems to be the worst of the economic downturn, and its subsequent impact on all types of commercial real estate, we sit in a very unique spot in terms of being able to assess which asset class is the most recession proof.  Let’s take a look at a few of the top candidates: Read the rest of this entry »

Three articles and three mini blogs:

1) “Public Pension Funds Are Adding Risk to Raise Returns”

Uh, What?!  Raising risk to raise returns!?  That’s like losing at the $25 black-jack table and then trying to make your money back buying lottery tickets.  Or, in real estate terms, trying to make back losses on a core deal, by speculating in vacant land.  The only thing you get with more risk is more risk!

This sort of ridiculous thinking, of course, rests on an equally ridiculous assumption: stocks, in the “long run” will always go up.   You would think the people who are trying to make up for losses in stocks, might think twice about the inevitability of equity gains.  Alas, no such luck for the policy holders.

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