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Tiho Brkan

@TihoBrkan

28 Nov

Great article to read.

"Pity the poor saps who piled into shares of Alibaba Group Holding Ltd. when it was a $750 billion behemoth and the sky still appeared to be the limit."

washingtonpost.com/business/aliba…

The decision-making question of when to pull the trigger — also known as timing — is one of the most important investing skills.

What has helped me is deliberate patience, preserving optionality, understanding the history of business cycles & behavioral economics (sentiment).

With benefit of hindsight, it looks far wiser to have waited on buying $BABA with an average entry in $140s (my current position) vs someone holding at $200 or even $250.

Patience: waiting for the opportunity to come to you (price & valuation) instead of you chasing it.

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Tiho Brkan

@TihoBrkan

17 Nov

There is no housing crisis — it’s a false narrative.

Shortages are a temporary problem created by artificial monetary policy not witnessed in centuries.

When the cheap money punch bowl is taken away, demand will collapse.

Oversupply will remain — the mortal enemy of price.

Such false narratives are common near the peak of every great price run-up and bubble throughout history.

Don’t look for real estate specialists to justify fundamentals. They often suffer from a confirmation bias & availability bias within their echo chamber.

When opposite evidence is presented — often by outsiders who aren’t part of the tribe — is swiftly rejected.

Semmelweis reflex is a metaphor for a reflex-like tendency to reject new evidence, knowledge, or well thought out opinions because it contradicts established norms.

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Tiho Brkan

@TihoBrkan

10 Nov

Apple iPad in 1992 was called Apple Newton. It failed as the timing was wrong, despite being a fantastic idea.

In similar fashion, asset allocators and private investors need to think way more about timing, and focus way less on narratives and “fundamental reasoning.”

Simplified example: “ABC is a great investment.”

Real estate was a great investment in 2012, but an awful one in 2006.

Gold was a great investment in 2001, but an awful one in 2011.

Tech stocks were a great investment in 1990, but an awful one in 2000.

Timing really matters.

How many consensus ideas and popular investment opportunities today will turn out to be money losing propositions over the next 5 to 10 years?

And how many depressed, disliked and under-owned investments today, will turn out to be home run winners in by the end of 2020s?

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Tiho Brkan

@TihoBrkan

24 Oct

https://twitter.com/stillwell/status/1440666877752070153?s=20

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

Continued…

https://twitter.com/stillwell/status/1440666877752070153?s=20

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*

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Tiho Brkan

@TihoBrkan

23 Oct

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.

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Tiho Brkan

@TihoBrkan

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…

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