Friend's business sold and netted $3m

[daletournier]

Originally Posted by kmacdonald

There is a reason for that. The future of the US market looks that good to the rest of the world. Take advantage of it.

Based on what exactly? There's arguments for and against your tax cuts? Your basing this melt up on them? Sorry I need more real indicators than hope and faith, give me data? Once again I agree it could go alot higher but few could argue this based on reason!

As explained it's currently the most overvalued since 1929, not my opinion but fact, yet fundamentally your economy is fragile, have you reached goal inflation any year since 2008? Even with historically low interest rates. What have you had, five quarter percent rate hikes in nine years? Where's your sovereign debt stand relative to 2008? While your at it checkout house hold debt, student debt, car loan debt any debt you choose and compare it to ten years ago. A Minsky moment is coming.

Easy money and the search for yield has distorted markets and made the average Joe blow and investor.

As surf and sail said, he wouldn't advise anyone to get out of the market right now, timing is a hard thing BUT i certainly aren't brave enough to jump in.

[boatman61]

Originally Posted by a64pilot

You guys make me feel poor

Don't even Think of walking in my shoes..

Re OP.. now if you were talking $500/mth I got loadsa advice..

[kmacdonald]

The market is driven by future expectations. Technical analysis doesn't show that. Don't try and rationalize an irrational market. Learn to use it in your favor.

[a64pilot]

Originally Posted by boatman61

Don't even Think of walking in my shoes..



Re OP.. now if you were talking $500/mth I got loadsa advice..

It’s all relative, I have been up, and down. Truth be known some of my happiest years have been when it was tough to rub two nickels together.
Of course I was WAY younger then.
However this has been an interesting thread. While I am no investor, I saw both the .com and RE busts coming, it didn’t take a genius.
With the .com, I knew it was going to go bust when I heard that realestate.com was valued higher than Delta Airlines, and the housing thing was obvious too.
Anytime the “common man” walks around walks around espousing financial advice, you can be sure it’s too late, the money has already been made there, and all that is left is the bust, this bitcoin thing for example.
I don’t know squat about what it is, but I know better than to buy into it now.

[daletournier]

Originally Posted by a64pilot

It’s all relative, I have been up, and down. Truth be know some of my happiest years have been when it was tough to rub two nickels together.
Of course I was WAY younger then.
However this has been an interesting thread. While I am no investor, I saw both the .com and RE busts coming, it didn’t take a genius.
With the .com, I knew it was going to go bust when I heard that realestate.com was valued higher than Delta Airlines, and the housing thing was obvious too.
Anytime the “common man” walks around walks around espousing financial advice, you can be sure it’s too late, the money has already been made there, and all that is left is the bust, this bitcoin thing for example.
I don’t know squat about what it is, but I know better than to buy into it now.

True, it's the Joe kennedy shoeshine boy advice story.

[a64pilot]

Many years ago my Father told me a story to try to explain the market, how way back when people bought into it for the dividends, but not any more, this was in the 70’s I think.
Story is there is a poor man fishing on the bank with a cane pole, if he catches something, he eats tonight.
Then there is a wealthy man fishing near him in a very expensive bass boat.
The poor man lands a trophy bass, the man in the Boat sees this and moves over using the trolling motor and strikes up a conversation.
He asks what the man is going to do with the fish, the man responds I’m going to eat it, it’s what you do with fish.
Well the wealthy man offers the poor man $20 for the fish, the poor man immediately takes it cause he knows he can buy more hamburger than the fish weighs with $20.
The wealthy man takes the fish and is showing it off to his friends, one buys it for $40. Then of course a day or so later he sells it for higher etc.
Last guy to buy it takes it home and eats it, and gets sick cause the fish is old by now, and takes it back to who he bought it from and asks for his money back.
The seller of course is put off and is amazed the the buyer ate the fish, the buyer says of course I ate it, that’s what you do with fish.
The sellers laughs and says that’s not an eating fish, that fish is for selling.
Moral of course is anytime the value of something is based solely on its expected sale price, and not its true value, don’t buy.

I know, obvious, but I’m surprised at how many people don’t understand that a fish is for eating

[daletournier]

Price is what you pay, value is what you get.

[CaptTom]

Originally Posted by a64pilot

Many years ago my Father told me a story to try to explain the market...

I heard the same story, attributed to a famous tycoon of the Robber Baron era, but the product was a trainload of canned beans. The punch line was "those weren't EATING beans, those were TRADING beans!"

I think it's at least as true today as it ever was. There's investment, and there's speculation. Know which one you're engaging in!

[john61ct]

If actual utility value and common sense still reigned, the paper value of the modern economy would be a tiny fraction of what it's been for decades now.

And yes humanity would be better for it.

Like we've designed a rocket car without brakes, can't even turn corners. Hopefully the self-destruct button works when it flies off the cliff.

[daletournier]

Originally Posted by kmacdonald

The market is driven by future expectations. Technical analysis doesn't show that. Don't try and rationalize an irrational market. Learn to use it in your favor.

I have some future expectations, based on stuff like this:

https://thefelderreport.com/2018/01/...ff-the-charts/

[a64pilot]

OK, it is way, way overinflated if I use the term correctly, but why is that?
My guess has been for years that it’s because almost everyone’s Retirement funds are in the Stock Market, and that the bust would come when the largest section of the population that was pumping money into the market began to withdraw instead, the Babyboomers of course.
Problem with my hypothesis is, unless mistaken, that has already happened, the boomers have retired already?
Realize I formed this Hypothesis on my own in the 80’s.

[BandB]

Originally Posted by LouieP

Hey Everyone,

A friend of mine recently sold his business and walked away with just over $3 million dollars. Him and his significant other are burnt out from 60+ hour work weeks and living in Los Angeles.

They are inlove with the dream of purchasing a used Lagoon 450 or FP Helia 44 in Europe and cruising for a year or more depending on how much they enjoy it.

His plan is to first deploy most of his newly found wealth into large Multi-family buildings in parts of the US where you can reasonably expect 8% Cash on cash returns without too much risk and headache (using good property managers).

So my question is this, is he overly optimistic that with a $3m liquidy event can fund this kind of mini-retirement ?

Love to hear your thoughts/concerns/ideas

Too many unanswered questions. Don't know your or your friend's age, other assets, whether maintaining an LA home or not, what other sources of income. Living in a small condo in a state without income tax and it's rather simple, but bringing California into the picture changes it a lot. Don't know their lifestyle. If they're use to spending $200k a year, then they may not be happy spending less.

As to investments, don't know their other investments. I wouldn't have a majority of all my investments in real estate, whether multi-family or commercial. Financial advice you get for free on a Cruisers Forum is worth even less than you pay for it.

[Lambada]

Wtf when i have that amound of mony ill stop today ....i am 52 ..

[kmacdonald]

Originally Posted by a64pilot

OK, it is way, way overinflated if I use the term correctly, but why is that?
My guess has been for years that it’s because almost everyone’s Retirement funds are in the Stock Market, and that the bust would come when the largest section of the population that was pumping money into the market began to withdraw instead, the Babyboomers of course.
Problem with my hypothesis is, unless mistaken, that has already happened, the boomers have retired already?
Realize I formed this Hypothesis on my own in the 80’s.

There has been a lot written about just that. The boomers aren't withdrawing at the rate they were predicted to and the foreign investing has more than made up for what they do withdraw. That trend will increase. Don't try and do a technical analysis of the market, it doesn't work or everyone would be rich. With a little research you should be able to do very well in sector funds. If you're not into doing any research at all just buy index funds. Index funds outperform the average mutual fund and that statistically proves the market is rigged or being manipulated by large investors and the fund managers themselves.

[kmacdonald]

Originally Posted by BandB

Too many unanswered questions. Don't know your or your friend's age, other assets, whether maintaining an LA home or not, what other sources of income. Living in a small condo in a state without income tax and it's rather simple, but bringing California into the picture changes it a lot. Don't know their lifestyle. If they're use to spending $200k a year, then they may not be happy spending less.

As to investments, don't know their other investments. I wouldn't have a majority of all my investments in real estate, whether multi-family or commercial. Financial advice you get for free on a Cruisers Forum is worth even less than you pay for it.

Can't argue with that.