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I’m going further to say that the speculative investment style itself is the problem, for many if not all areas. Once this kind of investor comes in, they want
by hrbf 4y ago
I’m going further to say that the speculative investment style itself is the problem, for many if not all areas. Once this kind of investor comes in, they want to squeeze the market for all it has, effects be damned. They may as well bet on crop failure – and they do.
- fithisux 4y agoWell worded.
- the_wolo 4y agoI'm going further to say that every investing is speculative in itself, because investing is the activity of buying an asset, speculating that there will be a return.
- chii 4y agowhile that's true, it's not black and white. The invested asset produces output. This output is useful, and speculative demand of that asset will, in normal circumstances, produce more of that output due to the pressure to increase the number of those assets. Housing is not different. Except that there are some people who would prefer to limit the builds of new housing.
- johnnymorgan 4y agoOnce investing was disconnected from P&E, you are absolutely correct. The market is just gambling at this point the company can hype their stock. >Stonks go up, we just like the stonk
- worik 4y agoCapitalism is the problem, then? That is what that is. Establish ownership (of capital), exploit that ownership. Capitalism in a nutshell.
- machina_ex_deus 4y agoThe problem as I see it, is investment without value added, a.k.a rent seeking. Buying an apartment and renting it for long duration without any value added is a problem. If you buy something without expectations of its economical value increasing, only its price, that's a problem. Buying an apartment and hosting it for short duration in Airbnb (or another way) to tourists, while providing real service, is a real investment. It created real economic value. I'm OK with these kind of investments. The root of the problem comes from the central bank. There's asset inflation that is virtually ignored, created by low rates, QE, and regulation around mortgages. That asset inflation makes "investing" without creating value a good strategy.
- johnnymorgan 4y agoThis...so much this!
- mkoubaa 4y agoOne or two steps removed from Georgianism.
- rdtwo 4y agoAlmost all the growth in the USA for the last decade was from rent seeking. It would be crazy not to invest in it
- mb7733 4y agoI don't follow, why do you consider providing short term stays to tourists a valuable service, but not providing long term housing to residents?
- machina_ex_deus 4y agoThey created economic value. The tourists couldn't buy the house themselves just for few days visit, and there was economic value in the cleaning, the service, the flexibility of making the reservation in quick timing. There's no economic value in "providing long term housing to residents". You hodl the asset which someone else required and added no economic value. They could've bought the asset themselves because they wanted to be there for a long term. But they can't because everyone is hodling. When economic incentives are good, you should sell an asset or an investment when you do not expect to gain economic value from it anymore. Why do people "provide long term housing" instead of just selling their assets ? I see houses as an asset similar to cars. They decay, they break, old houses are horse trade, they require high maintenance. Their economic value only goes down, and their prices would too if there wasn't a housing cartel opposing new construction and high population growth combined with bad government housing policy, but most importantly, if the regulation around mortgages was similar to any other asset.