Harley Davidson In The World's Second Largest Motorcycle Market: India [View article]
The Harley brand is as much lifestyle as transportation.
So you need large amounts of disposable income (as you mention) and also a psychographic that may or may not exist to the same extent in emerging markets.
People tattoo the Harley logo on their bodies in some of the developed markets--so you have a brand loyalty that is unique.
The affiliation (owners groups), rallies, and lifestyle (or aspirations towards that lifestyle) seem to drive sales as much as the need for transportation.
I would guess practical, economical transportation will take precedence over lifestyle or status motorcycles for some time.
If the television show "Sons of Anarchy" become number one in India, you will be looking at a ripe market for sales... Hard to be like them on a Japanese moped....
Article notes the market is "frothy", firms cutting back on buying, rents down in some market (oversupplying in some areas?), high vacancy for institution owned rentals. But over 1/2 have 5-10 timeline....Extending opportunity costs to a decade...
My thought--maybe look to buy in fire sale 2018-2020 from distressed, pressured institutions that locked into illiquid assets for a decade of drippy faucets and trash-outs.
Blue bloods may think twice about investment requiring blue collar work...
Some good facts and information. Some firms have 10,000 even 20,000+ homes... But also armies of employees to handle the scale.
One figure cited is 6% return when all is said and done....
But may be on the optimistic side. And still seems paltry with inherent risks (interest rate, rental rate risk, vacancies, liability, local property market risks, liquidity risks, opportunity costs of missing run up in market, an uptrend that has coincided with many of these investments)...
Look what market has told us about the publicly traded firm(s) doing this--no real return expected. The comments about packaging the residential properties into complex securities or publicly traded firms also hints of some desperation and investors looking for exit strategies (another risk--how do you sell 10K homes? Lots of signs and closings?... and how do you do it without impacting the market??)
Maybe the last act of this play is entitled "No Exit"
Interesting piece out today on institutional investors actually fueling the price gains they are seeking. Are they putting in a floor or pumping up a mini-bubble?
And who needs monthly cash-flow when engineering mass buying can pump up prices.
Private equity still looking at significant transaction costs in quick sales (tax, commission, fix up, vacancy, marketing)..
Suppliers of the enterprise have been the winners...
Hard to say where the market would be without some of those inputs.
I love the rational, data based "Stocks For the Long Run" (Siegel's great book) ideas.... Great thesis and case for stocks (over the very long term)...
But where you get in the game and out of the game (your life cycle relative to the bull/bear market cycle) is also key.
We also have the "Madness of Crowds" and general animal spirits driving much of investing short term.
Hard to ask people who lost much of their savings (be it 1929, dot.com crash, or more recent financial crisis) to be rational and look at long term stock data and re-enter the market. Too much emotion, too much pain, etc.
Behavioral economics, group psychology, generational trends, etc. may tell us much about the next market. Alarming numbers of baby boomers have inadequate retirement savings (will they invest in stocks like mad and let it ride on the market or look for stronger government funding for entitlements)....
Nice look at issue(s) in above comment from an article I came across today-- on market events and their potential impacts on a generations' asset allocation:
I see this theme more and more--looking at real savings patterns, life expectancies, even normal human behavior (like who really invests like clockwork without fail a set % from 20 to 65)... Also, considering human capital is key.
We may even see generational trends and biases towards asset classes (or lack thereof).
An example, I recall is inheriting some EE Bonds from a greatest generation era grandparent in 1999 ( a life time US bond & CD) investor. Of course, I was thinking at that time--as a Gen X equity-o-phile- how I wish the grandparent had discovered stocks. Oh the riches and lost opportunities.
Then I found myself holding those double EE's quite dearly in the dot.com collapse.
Yes, grandparent had been alive and old enough to understand the market crash of 1929 and seen its impacts. So we may even have to begin looking at market history and the interplay with human psychology, too...
It is a very complex and nuanced issue--much more than just stocks versus bonds in a race over the last 100 years.
Brief CNBC report that foreclosure values are drying up; relevant because it could bad for those still trying to buy (little/no discount to market) and flip; but it may be positive for first movers--those who bought bulk foreclosures a couple of years ago. Also, even without discount, they could pencil out as rentals, according to report.
James K. Glassman points out some similar housing plays (for home improvement) in the December Kiplinger's:
Some relevant picks in the same vein as above are Lennox Int (LII) for heating and A/C; Mohawk (MHK) for floors; and A.O. Smith (AOS) for water heaters.
This "flipping" of houses is generally associated with a very short term transaction where a buyer quickly buys the house (often making cosmetic improvements) and then attempting to sell it quickly for a profit. You can find definitions, websites, and even past television shows on the concept online.
This was very popular during the housing boom with quickly appreciating property values.
In this context, some comments point to private equity attempting to do this "flipping" as opposed to buying the properties longer term and renting them out.
The keys being buying at a favorable price, not spending too much in repairs/improvements and--of course-- selling quickly.
Sounds like you are following some firms that are using a strategy to quickly flip the homes or to exchange them in tax deferred ways.
The flipping strategy could depend more on buying at the right price, keeping improvement costs in line, and quickly finding bulk buyers (and keeping transaction costs in line).
Of course, they'd miss out on longer term price appreciation--but you don't have to operate the single family homes. There is a neat Reuters article in the comments about a private equity firm selling homes and now expecting lower returns on the venture.
It would be interesting to find out if the flipping is the plan "b" after seeing the issues with the management of the properties and low cash flow as rentals. Or maybe it is market dependent, with buyers emerging and sales possible.
Just like individual investors, the main fly in the flipping ointment is finding a quick buyer. And what you do in the interim...
Harley Davidson In The World's Second Largest Motorcycle Market: India [View article]
So you need large amounts of disposable income (as you mention) and also a psychographic that may or may not exist to the same extent in emerging markets.
People tattoo the Harley logo on their bodies in some of the developed markets--so you have a brand loyalty that is unique.
The affiliation (owners groups), rallies, and lifestyle (or aspirations towards that lifestyle) seem to drive sales as much as the need for transportation.
I would guess practical, economical transportation will take precedence over lifestyle or status motorcycles for some time.
If the television show "Sons of Anarchy" become number one in India, you will be looking at a ripe market for sales... Hard to be like them on a Japanese moped....
Safeway: In The Discount Aisle For A Reason [View article]
Private Equity's Foreclosure Binge (& Purge) [View article]
http://bit.ly/13qlXJR
Article notes the market is "frothy", firms cutting back on buying, rents down in some market (oversupplying in some areas?), high vacancy for institution owned rentals. But over 1/2 have 5-10 timeline....Extending opportunity costs to a decade...
My thought--maybe look to buy in fire sale 2018-2020 from distressed, pressured institutions that locked into illiquid assets for a decade of drippy faucets and trash-outs.
Blue bloods may think twice about investment requiring blue collar work...
Private Equity's Foreclosure Binge (& Purge) [View article]
http://onforb.es/11mEoMm
Some good facts and information. Some firms have 10,000 even 20,000+ homes... But also armies of employees to handle the scale.
One figure cited is 6% return when all is said and done....
But may be on the optimistic side. And still seems paltry with inherent risks (interest rate, rental rate risk, vacancies, liability, local property market risks, liquidity risks, opportunity costs of missing run up in market, an uptrend that has coincided with many of these investments)...
Look what market has told us about the publicly traded firm(s) doing this--no real return expected. The comments about packaging the residential properties into complex securities or publicly traded firms also hints of some desperation and investors looking for exit strategies (another risk--how do you sell 10K homes? Lots of signs and closings?... and how do you do it without impacting the market??)
Maybe the last act of this play is entitled "No Exit"
Private Equity's Foreclosure Binge (& Purge) [View article]
And who needs monthly cash-flow when engineering mass buying can pump up prices.
Private equity still looking at significant transaction costs in quick sales (tax, commission, fix up, vacancy, marketing)..
Suppliers of the enterprise have been the winners...
http://bit.ly/ZMYeW2
Private Equity's Foreclosure Binge (& Purge) [View article]
both sides of the coin on policy:
http://bit.ly/YaAbhO
A Day In The Life: Spinning Siegel [View article]
I love the rational, data based "Stocks For the Long Run" (Siegel's great book) ideas.... Great thesis and case for stocks (over the very long term)...
But where you get in the game and out of the game (your life cycle relative to the bull/bear market cycle) is also key.
We also have the "Madness of Crowds" and general animal spirits driving much of investing short term.
Hard to ask people who lost much of their savings (be it 1929, dot.com crash, or more recent financial crisis) to be rational and look at long term stock data and re-enter the market. Too much emotion, too much pain, etc.
Behavioral economics, group psychology, generational trends, etc. may tell us much about the next market. Alarming numbers of baby boomers have inadequate retirement savings (will they invest in stocks like mad and let it ride on the market or look for stronger government funding for entitlements)....
A Day In The Life: Spinning Siegel [View article]
http://bit.ly/TssbnG
A Day In The Life: Spinning Siegel [View article]
We may even see generational trends and biases towards asset classes (or lack thereof).
An example, I recall is inheriting some EE Bonds from a greatest generation era grandparent in 1999 ( a life time US bond & CD) investor. Of course, I was thinking at that time--as a Gen X equity-o-phile- how I wish the grandparent had discovered stocks. Oh the riches and lost opportunities.
Then I found myself holding those double EE's quite dearly in the dot.com collapse.
Yes, grandparent had been alive and old enough to understand the market crash of 1929 and seen its impacts. So we may even have to begin looking at market history and the interplay with human psychology, too...
It is a very complex and nuanced issue--much more than just stocks versus bonds in a race over the last 100 years.
McDonald's: A Dividend Dream Stock That Has Growth Potential [View article]
Longer term the organization seems to produce and attract top talent. Ideally, it can self correct to keep high standards.
I like the "keep the eyes on the fries" types up from the ranks/ lifetime employees who flipped the burgers and ran operations for decades.
The long term folks can get some more bang for the drip bucks with dips.
McDonald's: A Dividend Dream Stock That Has Growth Potential [View article]
Nice stock for us since early 2000's. Now fun to watch the dividends reinvest and buy more.
They adapt the menu well to new market, as proven in many countries.
Preferred Apartment Communities Short Thesis [View article]
Private Equity's Foreclosure Binge (& Purge) [View article]
http://bit.ly/RPbodt
Brief CNBC report that foreclosure values are drying up; relevant because it could bad for those still trying to buy (little/no discount to market) and flip; but it may be positive for first movers--those who bought bulk foreclosures a couple of years ago. Also, even without discount, they could pencil out as rentals, according to report.
James K. Glassman points out some similar housing plays (for home improvement) in the December Kiplinger's:
http://bit.ly/WQMIa8
Some relevant picks in the same vein as above are Lennox Int (LII) for heating and A/C; Mohawk (MHK) for floors; and A.O. Smith (AOS) for water heaters.
Private Equity's Foreclosure Binge (& Purge) [View article]
This was very popular during the housing boom with quickly appreciating property values.
In this context, some comments point to private equity attempting to do this "flipping" as opposed to buying the properties longer term and renting them out.
The keys being buying at a favorable price, not spending too much in repairs/improvements and--of course-- selling quickly.
Private Equity's Foreclosure Binge (& Purge) [View article]
Sounds like you are following some firms that are using a strategy to quickly flip the homes or to exchange them in tax deferred ways.
The flipping strategy could depend more on buying at the right price, keeping improvement costs in line, and quickly finding bulk buyers (and keeping transaction costs in line).
Of course, they'd miss out on longer term price appreciation--but you don't have to operate the single family homes. There is a neat Reuters article in the comments about a private equity firm selling homes and now expecting lower returns on the venture.
It would be interesting to find out if the flipping is the plan "b" after seeing the issues with the management of the properties and low cash flow as rentals. Or maybe it is market dependent, with buyers emerging and sales possible.
Just like individual investors, the main fly in the flipping ointment is finding a quick buyer. And what you do in the interim...