Everyone think they can time the market...
The reality is, no one can!
It’s just about having situational awareness and knowing when to to leave some chips on the table and walk away before you leave ALL the chips on the table!
We had “one helluva party” as Warren Buffett said and it feels like everyone are losing track of time and soon enough the clock will ring midnight and all the Ferrari, Bugatti and Maserati will turn into pumpkins.
Am I calling for a doomsday warning here, no. I think we have a great opportunity in front of us. the wealthiest investors I know made more money in the downturn than in the upcycle BUT, they knew what to bet on and adapted their investment strategies to fit the market and the times.
So no to doomsday and yes to adapting strategies, what then do we think is the right move in 2025?
We believe there is a short window ahead of us (12-18 months or so) where investors can grab NNN lease assets such as neighborhood retail and industrial Flex at bargain prices reflecting 7%-8% entry cap rates. Then let the market do its thing for 2-3 years. Let the economy work out the unemployment, the inflation, the tariffs, etc. while the investors sit back and enjoy that safety net called NNN.
We spell NNN differently here at EBG, we spell it TTR: Transfer The Risk!
NNN leases allow the investor to transfer the risk of inflation, rising costs of insurance, taxes, labor, materials, etc. onto the tenant while enjoying (in most cases) regular increases in the rents.
Maximize your Headaches to Returns Ratio!
Another key benchmark we teach at EBG is the HTR (Headaches to Returns) Ratio. NNN assets allow the investors to get the most benefits for the least amounts of headaches. can you get more returns investing in something else, maybe. Will it require significantly more involvement and attention, almost Always!
Talk the talk or Walk the walk?
We, at Eureka Business group, don’t just sit back on a highchair and tell our investors to do things we don’t do. We are commercial real estate investors first. We don’t just sell and manage commercial assets, we also invest them and when we saw the writing on the wall at the end of 2022, we sold most of our multifamily assets and shifted to NNN assets. So the next time a salesperson is trying to sell you on the next stock/multifamily/annuity/any other investment strategy, ask them: Do you invest in this? Are you putting your own money on this or do you just ask me to risk my hard earned money? I usually find that the “advice” is worth about what the person giving it has implemented it themselves.
Warren Buffet
The quote in the picture is not new. It is from Berkshire Hathaway annual letter to shareholders of February of 2000. You see, history tends to repeat itself because we, humans, have a very short memory…
This year was one of the lowest years for Berkshire stock buybacks, Historically Buffet would spend billions on stock buybacks when he thought the BRK stock is undervalued. he also been hording cash and selling off positions in Apple and Bank of America in the last few years. I don’t claim to have a crystal ball, I just like to pay attention what the really big guys out there are doing.
#ebg #2025markets #RetailNavigator