In the 1968 psychology paper, experiments on horse track gambler was undertaken.

Some were questioned prior to making a bet, others right after it.

Turns out those who made the bet were more confident than those who didn’t yet. Act of commitment itself can be a major fallacy.
You see this echo chamber of thinking across Twitter finance, from stocks & venture capital to real estate.

It is very difficult to find an investor who isn’t “talking to his book” and has a skill set of optionality to turn from one asset class to another objectively.
In other words, you don’t invest in multifamily real estate because your grandpa started the family business and you were spoon-fed the narrative.

You allocate capital there because it has the best risk to reward profile vs all other opportunities available to you at that time.
Our family business is in luxury real estate and has been doing great for over two decades now.

However, when allocating our capital, we look at each and every opportunity as objectively as possible with as little bias as possible.

Despite our family business expertise…
…if the luxury real estate in our markets becomes too expensive, and therefore too risky,

I’d much rather allocate capital to an opportunity — in another asset class — that has a better upside potential with a lower risk and ample margin of safety (asymmetric bet).

• • •

Missing some Tweet in this thread? You can try to force a refresh
 

Keep Current with Tiho Brkan

Tiho Brkan Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!

PDF

Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @TihoBrkan

24 Oct
Great thread on all of the simple, yet painful things, that can go wrong with a luxury real estate project.

Continued…
I’ve tweeted this many times, but it doesn’t hurt repeating. When executing our luxury projects:

• we hardly ever use debt and if we do it would be well below 50% LTC

• we don’t use outside investors but our own permanent capital which has long term patience & staying power
• we demand a margin of safety (e.g. meaningful discount at entry) and we’d rather have a missed opportunity than to “pay up for quality” because paying up will hurt you in the luxury game

*unlike GPs that buy at any valuations chasing fees & promote our only upside is profit*
Read 4 tweets
7 Oct
For years, I’ve read macro newsletters which held views of deflationary forces.

These academically gifted people, majority of whom never practiced what they wrote, were convinced deflation would persist because Treasury bonds were rising (yields were falling).
Quick example.

We are fortune enough to be invested in real estate in 4 different jurisdictions, on 3 different continents.

Over the last few years, especially last few months, all I’ve seen is rise in prices.

Even this morning I received a letter from Czech electricity…
…giant telling me they are permanently rising prices from today.

My local builders in various countries tell me the cost of materials is up by 20-30%, in some cases much more.

I run my Twitter as a investing journal of everything I’ve done and learned over the years, and…
Read 5 tweets
2 Oct
Recent HNWI & FO survey takeaways:

• 7 out 10 respondents said achieving capital gains (not income) is the most important aspect when allocating to new alternative assets

• Many families are simply seeking good opportunities wherever they arise (not running a fixed portfolio)
• portfolio diversification (various funds, managers, global regions, asset classes, etc) and generating outsize returns are front of mind for most HNWIs & FOs

• In terms of sectors, Techonology is still the key focus, with the ongoing demand for venture capital deals/funds
• The key for most families is having access to the best-performing managers (most want to know that the fund managers they back are real rising stars)

• In times of crisis special situations & distressed credit funds should be an area of interest, and they have been popular
Read 4 tweets
28 Sep
Basic technical analysis notes. $BABA

Weekly first. As oversold today as on two previous occasions: 2015 RMB devaluation & 2018 trade war.

Momentum most oversold since IPO, volumes spikes highest since IPO.

We like to buy oversold when others panic (volume spikes)!
The long-term daily chart next.

A cluster of support levels between $130 and $150 price range.

Recent panic selling saw the lowest relative strength & momentum on record.

Price is very far from the 1-year mean (red line), indicating the possibility of a mean reversion.
Alibaba's HK price is up over 7% today.

Typical price thrust anticipated by bullish divergences everywhere.

Selling exhaustion seems to have run course. Why?

The onslaught of bad news out of China, yet $KWEB not making new lows!

Bears "had" their moment of glory. Is it over?
Read 4 tweets
16 Sep
Evergrande should have defaulted years ago, so this isn't a surprise.

As an investor, I do hope the Chinese don't follow the footsteps of the West, especially the Europeans, who bailed everything and everyone out — creating a zombie economy.

Market pain creates opportunities.
Risks haven't been there for only a month, they have been there for a long time.

If the Chinese economy goes through a property market de-leveraging, it will be very painful in the short term, but create a fantastic buying opportunity.

These are the sort of headlines (back in 2012) you can expect near the market lows — exactly when you should be buying.

The worse the news gets for Chinese equities in the short term, the more bullish we become over the long term.

Read 4 tweets
15 Sep
Alibaba and Tencent have been our focus in the public market as of late.

Here is what is important right now:

Successful retest or even a slight dip below August lows, despite the continued news, will be a sign most of the bad news has been discounted.

$BABA $TCEHY
If the price doesn't stop at the August low, and a retest fails, we expect both companies to sell off towards the next support level.

That could mean Alibaba at $130 and Tencent at $40.

Neither of these tweets is a prediction, just our simple probabilistic thinking approach.
Further downside remains a possibility considering S&P 500 $SPX is acting weak right now.

The index breadth is deteriorating and the $VIX is making equal & higher lows since July, not confirm the S&P's rise.

Being prepared for multiple outcomes doesn't hurt a prudent investor.
Read 5 tweets

Did Thread Reader help you today?

Support us! We are indie developers!


This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Too expensive? Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal Become our Patreon

Thank you for your support!

Follow Us on Twitter!

:(