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Posted about 4 years ago

DID WE ALL JUST WARREN BUFFET, WARREN BUFFET? ASKED THE PUPPETS.

"Be fearful when others are greedy and to be greedy only when others are fearful?" Isn't that what you told us, Warren? Essentially Zig, when others Zag? Then in April, after airline stocks had tanked, you informed the world you had sold all of your holdings. I didn't appreciate this, because I had taken your advice, and invested in the hurting airline industry. By making your big announcement, my holdings went the opposite direction of what I was aiming for, but lucky for me - only slightly. Yes, me – who considers the stock market a casino – was greedy when others were fearful. Some might say negligent.

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                                         A shot of the floor on Wall Street.

I mean, if one was ever going to roll the dice, this seemed like the time. You could look at those airline stock charts, and see that there was a lot of runway – no pun intended. They were so far down, that even if they came back a quarter of what they had lost, you might still double your money - if you had bought at the low. Yet, Mr. Buffet came out at his massively attended, star-studded (Bill Murray chimed in with a weird moment) shareholders meeting, and told the world that he sold all his earnings at the low. If we take him on his word, he was "fearful when others were fearful." Did he sell? Or was he playing us? Did he sell in February and was now manipulating the masses so he could buy back on the uptick? And THIS is my point. Why try to control something you cannot control?

If you bought stock in March and April, you are feeling pretty smart right now, but let's not get too full of ourselves. Who knows what will happen next week. The market is Bat$h_ _ crazy; it is based on emotion, but more than that, it is controlled by a few puppeteers, and we are just the puppets. I find it hard to believe that those who bought into the hurting airline industry, just out-Warren Buffeted, Warren Buffet. If we did, maybe it is time for Mr. Buffet to hang it up

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                  "I feel like I have no control. How about you? Nope, me neither."

Going back to my point – invest in something you can control or at least understand. Here comes my unabashed bias. Even though I was a hypocrite, and bought stocks at a time that I saw as a unique opportunity, I know that I will take my money and invest in tax-sheltered commercial real estate. And not just for the tax advantages. Apartment syndication has a specific set of numbers and projections that can be quantifiably analyzed. We can look at the numbers and business-plan and make a smart, quantifiable investment decision. You are not at the emotional whims of the masses – the stock market.

Finally, and I briefly touched on it before. Take advantage of the enormous tax savings of Real Estate. If you sell these stock winnings in the short term, you will be giving hefty chunks back to Uncle Sam. Shelter your income. Take it and protect it in real estate, with terminology you should study up on like Now that the market is surging take the majority of those paper profits and invest it in REAL, tangible equity. Invest it in REAL estate

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There was much emotional angst released in our country this past week. Now it is time for we- the-puppets - to rise against the puppeteers of the world, and not only take back our wealth but also preserve it.


Did Warren Buffet sell all his airline stocks at the low? Did he zag when everyone else zagged? It is almost hard to believe. Maybe he had something else up his sleeve. The point is to control what you can control because, in the stock market, we are not the ones pulling the strings. In real estate syndication, we actually can predict things with a relatively high rate of certainty. We may not be the operator pulling the strings – especially if we are passive investors – but we are very much aligned with the operators. More importantly, our interests are aligned because we are all partners on the deal. We are in this together! Warren and the stock market? I am just not sure.




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