Sam Zell's Holiday Wish
I've said that the dollar post is next but I keep running up on other interesting topics. The dollar post will still be this week but this is too compelling to pass up.
As many of you know, Sam Zell, the billionaire real estate titan, sold his real estate trust to the Blackstone Group for $36+ billion recently. Some may say Mr. Zell is the brightest mind in real estate. It's hard to argue with his success. So, is he selling too early as BusinessWeek asks or has he sold private equity a bubble? Since private equity is likely a bubble, Zell may have been selling a bubble to a bubble. What does that make his sale? Bubble squared? Now, I'd opine that commercial real estate is not as extended as residential real estate but I'd still say pretty risky for Blackstone and their investors.
I'm not sure who's behind this web site but it's being passed around. I'm confident it's Zell's voice in a holiday message set to a an amusing take on bubbles. Well, as amusing as this can be. Zell is basically saying the investment world is in for a rough ride for many years. Nothing new. I'm not sure if his premise is complete but his conclusion is interesting. Nearly every savvy financial mind has been saying the same thing.
Zell states that "in the interim the world growth with benefit from a lower cost of capital." Read: Asset DEFLATION and accompanying low rates. He goes on to say "Reducing the relative expectation on equity". Read: Below normal investment returns. He closes by saying "It's with an optimistic perspective" I share this extremely messy situation.
I'd say he ought to be optimistic. He just cashed out a very illiquid asset at it's likely bubble peak. This is an amazingly frank assessment by a very savvy business executive. Enjoy Sam's holiday message here until someone yanks it.
As many of you know, Sam Zell, the billionaire real estate titan, sold his real estate trust to the Blackstone Group for $36+ billion recently. Some may say Mr. Zell is the brightest mind in real estate. It's hard to argue with his success. So, is he selling too early as BusinessWeek asks or has he sold private equity a bubble? Since private equity is likely a bubble, Zell may have been selling a bubble to a bubble. What does that make his sale? Bubble squared? Now, I'd opine that commercial real estate is not as extended as residential real estate but I'd still say pretty risky for Blackstone and their investors.
I'm not sure who's behind this web site but it's being passed around. I'm confident it's Zell's voice in a holiday message set to a an amusing take on bubbles. Well, as amusing as this can be. Zell is basically saying the investment world is in for a rough ride for many years. Nothing new. I'm not sure if his premise is complete but his conclusion is interesting. Nearly every savvy financial mind has been saying the same thing.
Zell states that "in the interim the world growth with benefit from a lower cost of capital." Read: Asset DEFLATION and accompanying low rates. He goes on to say "Reducing the relative expectation on equity". Read: Below normal investment returns. He closes by saying "It's with an optimistic perspective" I share this extremely messy situation.
I'd say he ought to be optimistic. He just cashed out a very illiquid asset at it's likely bubble peak. This is an amazingly frank assessment by a very savvy business executive. Enjoy Sam's holiday message here until someone yanks it.
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