March 28, 2008
I am writing to you in the
pre-dawn from a soft chair in a Starbucks in Scottsdale, a vast
improvement over the small desk in the cluttered toy room that I
usually write you from on Fridays. 16 inches from my left hand is a
“vente” (in the Starbucks’ nomenclature, that means super sized)
Americano (four shots of espresso with a dash of water to hold them
all together) that I will be consulting with throughout this
correspondence. I do so in an attempt to sterilize the effects of a
glass of wine or two too many following the close of what I felt was
another excellent Crisis & Opportunity Summit.
For those of you unfamiliar
with the concept of sterilization, at least as the word is used in the
discussion of modern economics, a topic that occasionally slips into
these paragraphs, I will elaborate. Sterilization refers to the notion
that a central bank can, upon spotting a storm cloud gathering on the
horizon, unleash a flood of loose money – the amount is almost
irrelevant, as long as it is enough, in their studied opinion, to
re-juice the economy and keep the consumers consuming. Then, once the
danger is passed, the same central bankers simply cut the supply of
money, thereby “sterilizing” the prior injection of cash before the
ill and otherwise inevitable effect of price inflation kicks in.
It all seems so logical,
this fundamental underpinning of fiat economics. Sense a threat -
unleash money. Threat passed - tighten up.
Yet, as you may have
noticed, it apparently doesn’t work. At least if you use the value of
the dollar as the metrics of success, the staunch defense of which is
supposed to be job #1 of the Fed. If you are looking for
further proof of that contention, your contemplations need extend only
far enough to notice that the greenback has lost some 80% of its
purchasing power since its link to gold was broken in 1971. There is
another side effect of the flawed foundation of the fiat system, at
least as it is pursued in the U.S., namely that American consumers,
encouraged by the loose money to make a hefty dose of spending a part
of their daily activities, are now up to their nostrils in debt and
many are underwater.
Over the last day and a half
here at the Summit we have heard much about these and other
consequences of the government’s failed jiggering of the economy and,
in particular, the depth and breath of the current crisis.
Regrettably, I don’t have time to go into great detail in this week’s
edition, as attempting to do so would result in my missing the plane
back home.
To move things right along,
I’m going to take the short cut of inviting others to join me on the
page. Starting with John, a subscriber who earns his daily soup by
serving as a professional real estate appraiser in Northern
California. John kindly agreed to candidly answer a series of
questions we sent him in our attempt to get a clearer picture of
what’s going on behind the scenes and under the hood in the all
important real estate market.
Real Estate, the
Insider’s Perspective
Before we get to John’s interview, I’d like to share some observations
on just one of the many great presentations held at this Summit, that
delivered by Andy Miller, one of the most substantial real estate
investors in these 50 states (for Andy, a typical day’s labor might
involve the buying or selling a hundred million dollars worth of real
estate or loans connected with same). Andy accepted our invitation to
Scottsdale to share his perspective on the outlook for real estate
going forward. While Andy used far more sophisticated language than I,
I will summarize his outlook as thus:
RUN FOR COVER!
To be more specific, his
view on real estate – and remember, Andy is as “inside” as inside gets
– is that we are nowhere near the bottom and that some segments,
commercial and condos especially, are going to fall off a cliff.
While there is little in the
way of specific actions you can take to invest for a short-term profit
from this unfolding situation – mainly because the stocks of almost
all the publicly-traded real estate firms have already been crushed –
Andy does believe that as this crash occurs it will create the
opportunity of a lifetime. If nothing else, in six months or a year
down the road you should be able to pick up that dream condo on your
favorite beach for an off-key song. As to when the market might
bottom, Andy’s take is that it all depends on the actions of the
government. If it stands aside and lets the market take its righteous
toll on the overextended mortgagees and those who hold those
mortgages, then the worst of the damage could be over in a couple of
years (at least that was my sense of the timing Andy suggested).
However, if the government, as it is prone to do, rolls up its sleeves
and sets about fixing the many dislocations in the real estate market,
then, like the Japanese before us, the real estate fiasco and
attendant damage could stretch out for a decade or more. Hot tip:
watch the politicians carefully (always good advice, in my opinion,
especially if you find yourself in a tightly packed elevator with
one).
Another of Andy’s many
insightful comments was that you should not trust appraisals. That’s
because, as the bubble inflated, loan officers, looking to make as
many loans as possible, and the bigger the better, naturally
gravitated toward the most liberal appraisers. By contrast, the more
cautious appraisers soon found themselves in an un-enviable position
portrayed so convincingly by the MayTag Repairman: sitting at an
uncluttered desk, staring forlornly at the silent phone.
As is human nature, a great
many, if not most, of the appraisers swallowed their ethics, put away
the textbooks they studied when learning their trade, and as a basis
of their appraisals began to use the amount of money they felt would
evoke a smile on the thin lips of the loan officers.
The task of over-inflating
the values became increasingly easier as the “comparables” available
to appraisers began to reflect the new reality. To wit, if the shack
down the street actually sold for $650,000, then who could dispute
that the lovely fixer-up, lacking only in a little TLC (read: “new
plumbing”) was worth $1,000,000?
Which brings us, finally, to
our guest interview with John, a residential real estate appraiser in
California. As he described himself in the correspondence leading up
to our interview… “I've been appraising in California for 18 years,
and deal with the gamut of lenders, borrowers and developers, and see
every story, scheme, and scenario possible. I have lots of anecdotal
stories and evidence, as well as research and conclusions, from the
extremely overbuilt new tracts, where builders are still
building—because they're committed—and competing against first
generation foreclosures in their earlier phases, and losing money on
every sale, to small projects dead in the water or upside down, to the
very rural, to the very upscale still paying cash.”
With that introduction, here
is our interview…
1. Have you ever seen
things in the real estate market this bad?
In terms of the all-around
uncertainty and worry being felt by borrowers, lenders, buyers and
sellers, nothing this bad.
I was in southern California
in the mid-1990s downcycle. Things had gotten overheated there
especially, but the decline was much more orderly, over maybe 3-5
years, than this one has been in just two or so. In retrospect it was
a fairly normal and not surprising correction. People and borrowers
got hurt and became wary, but there wasn’t the pervasive worry about
the bottom falling out. And it wasn’t as widespread. That is, while
most everyone lost value in their homes in the mid-1990’s downturn,
fewer people were as directly impacted or in such a critical
situation. There wasn’t nearly the breadth and depth of indebtedness
then. Today there is a much higher percentage of borrowers with a much
higher level of debt because, in this run up, so many people
continually ran up debt and sucked out their equity.
The frenzy of borrowing and
lending up until a year or so ago was far greater than that which led
to the escalating prices, and subsequent correction, in the early to
mid-1990s. I see instance after instance of someone with say a
$300,000 loan taking out a second mortgage or an equity line for
$50,000 a year later, followed by an all new mortgage that
consolidates the previous two plus tacks on another $50,000. So now
they’ve got a $400,000 loan. Ten months later they get another
$60,000. And, in 2004 through 2006 especially, there was a lot of 100%
financing, usually a first and a second mortgage, often with the same
lender.
The downtrend is not as
steady as the mid-90s. It goes in real fits and starts. In cases of
some very overbuilt communities I’ve seen the bar lowered by $30,000
in a single month in a $300,000 to $400,000 neighborhood. It’s usually
caused by sellers -- often banks -- unloading after a period of
waiting or stagnating sales. All of a sudden what was thought of as a
competitive asking price is now overpriced by $30,000 or more. [Ed
Note: Andy Miller said the best time to buy properties, when the time
is right, of course, is at the end of quarters when the institutional
holders dump properties in an attempt to clean up their books.]
2. Are appraisers under any pressure to give rosy valuations?
Not as much at this time,
because the lenders are more deeply affected and truly reigning in.
Mortgage brokers, who don’t fund their own loans, will still try to
put some pressure on, but the lenders—the ones actually putting out
the money—are saying “tell us what’s really happening in the market.”
They want to know because they’ve got lots of exposure and want to
know the real story. In fact, where before, in the 1990s downturn,
FNMA and most lenders encouraged appraisers to call the market
“stable” versus “declining” even if everyone knew they weren’t stable,
this time around they expect to see the declining box checked, unless
you make a very convincing case that values are in fact stable (not
too common here in California). So, at this point lenders are really
tightening. So even the magic cure of lowering interest rates won’t
help much when lenders are increasingly risk averse.
3. When a property
doesn't sell in two or three times the normal time span, why doesn't
the seller face facts and slash the price?
I’ve seen some slashing, and
some sellers chasing the price down, but always a step behind. What
they’d settle for now, but can’t quite get, they could’ve gotten last
year when they were asking $60,000 more. Reductions are more frequent
and often sizeable. It used to be that you’d see a token $5,000
reduction, more just to get your listing visible again. Now large
reductions are common. This is especially true in the high-end and
custom spec homes. Every contractor and contractor’s brother was
building a spec home, getting bolder in how big and fancy they’d build
them. After all if you can make $60,000 on a 2,000 square foot
$400,000-value home, why not build a 4,000 square foot home with all
the bells and whistles…it’ll cost more and take a little longer but
the market’s just going up anyway. I watched one 6500 sq ft very high
quality spec home go from a $2.5M asking price a few months prior to
completion in 2005, slowly down to $1.9M, then $1.6M and so on,
eventually to $1,200,000. In the end it sold for around $1,150,000.
The guy must have lost money because I’m sure that quality cost him
close to $200/sf just to build, not to mention the land (probably
$200,000+) and the enormous holding costs for 2-3 years.
The other sellers are, of
course, banks, whose motivations vary greatly. I’ve seen a few put
money and effort into a home and try to hold out for reasonably close
to market value, but most often they want to get them off their books
as quickly as possible. Sometimes they’re competitive and sometimes
they blow them out. I had one agent who handles REOs (Real Estate
Owned) for several lenders tell me sometimes they’ll get word to get
two sold in the next two weeks. He said that a decision was made, for
example, to clear 100 properties nationally off their books in the
next 30 days, so that meant orders were going to Region A to unload
12, Region B to unload 15, etc.
He said it was sometimes the
case of regulators requiring them to reduce their REO units. In one
case, the agent reduced a small home on 5 acres with a 3600 sq ft barn
with additional 2BR apartment from $569,000 to $400,000, overnight. It
was contracted in three days, and closed a few weeks later for
$392,000. Someone had paid $710,000 for it in 2005 with 90% or maybe
100% financing. In another case a lender was asking $325,000 and
accepted a cash offer of $175,000. The house was dumpy but sound and
livable, and reportedly not a major fixer. It was just not worth
$325,000 and the bank was tired of looking at it, and took the offer.
Until then nothing in a 3BR/2BA in that neighborhood went below
$275,000 or $250,000. Of course these are exceptional cases, but the
downward pressure is very real, and very intense still. There are many
properties for sale, and buyers are wary, or waiting. Some sellers,
those fortunate enough not to have to sell, pull out of the market.
Those that have to sell usually have to reduce their expectations.
4. Are there sellers who
have been in denial for months about what their property is worth but
who are about to come out of denial and make a big cut in the price?
Are there many of them?
See #3 above. Again, there
are always those that must sell. And, there’s another category that
falls in between the regular homeowner and the bank. It’s the
owner/borrower who’s in trouble and must sell, or lose the house. This
is the “short sale” situation, where the borrower owes more than the
property is worth, and is engaging the bank in the selling process to
have them accept less than the outstanding loan balance. The bank is
involved in negotiations and must approve the final sales price.
They’re fairly agreeable, because the alternative is going through the
entire default process, sinking more time and money into it, and
likely losing more. And here we’re just speaking about the first
mortgage (trust deed in California) holder. Often a second mortgage
holder will lose their entire loan amount; after all why would they
step in and pay off a first mortgage that alone is more than the value
of the collateral?
5. How is the market for
buildable lots? More depressed than for houses? How much more
difficult has it become to get financing for a buildable lot?
The market for lots has
completely dried up. In this area (semi-rural northern California)
land was on fire for several years, as contractors bought up nice lots
and not so nice lots to build homes on. For a while everything turned
to gold. People were selling land held in the family for a long time
(just like silverware in the late 70s!). Developers, many
inexperienced, were getting in to subdivide land to make 4 parcels, 12
parcels, or whatever zoning allowed. But it is a long and expensive
process.
The craze and demand peaked
probably in 2005-2006, and I still see some of these projects just
coming to market. People have spent two years, and more money than
they expected, to get their golden little subdivision, all finalized
and ready to go to market…and the market is not there. The demand is
so low for unimproved land now, but I haven’t yet seen the
capitulation I expect. I’ve seen small and medium sized subdivision
projects, which are completely upside down. A friend of mine owns a
commercial appraisal firm and specializes in large subdivisions. He’s
been the bearer of bad news too. In the frenzy, national builders were
buying farm land in the middle of nowhere, some two plus hours from
metro areas, to create new subdivisions and planned communities. Many
of the tracts and phases that never got built now have a residual
value of less than zero! That is, taking the estimated value of a
proposed completed house (times 20 or 200 or 2,000 depending on how
big your plans were!) and backing out the cost to build the house and
all your infrastructure, bond obligations, etc., the land is worth
less than zero. Of course, it is worth something, but only to
speculators willing to sit on it for a long time. There’s a reason it
was farm land in the middle of nowhere to begin with. Some can’t even
go back to farming because of zoning and general plan changes and new
houses now adjacent. [A whole other topic is farmers selling water
rights to new developments and municipalities, resulting in what is an
increasing amount of fallow land that’s apparently not farmable now.
Lots of unintended consequences, and unfolding opportunities?] It’s
going to be very interesting to watch the market unfold.
6. Based on what you are
observing, how much further do you think prices are going down?
My answer would have to be
anywhere from “some” more, say 15-20%, should well grounded optimism
magically set in before year-end, to a lot more, possibly 30-40%,
should news and conditions (and perceptions) worsen and snowball, or
there be some unexpected large macro event that shakes things up on
top of the underlying situation.
This, of course, is the
unknown and unexpected, but these things happen. It could be a natural
disaster, a military showdown, somebody doing something big and stupid
in the Middle East, political correctness of “Olympic” proportions
(what if the Tibet situation goes south, Richard Gere and fans get
half the world to boycott China this summer and cause them to lose
face in an epic way, and they decide in turn to boycott our dollar…),
or simply some confluence of events, in the US or elsewhere, that
ratchets up fears and concerns here.
In other words, if the stars
line up, and lots of things go well, or appear to go well, throughout
2008, things may stabilize with maybe only a 15% haircut, from here,
in general real estate values in the US. To predict less than this
just calls for too much precision with all the variables and
uncertainty, unless you really believe the downturn is about over,
which I don’t see. Under current conditions 5-10% can potentially whiz
by in a month or a quarter, and is really just noise, between
commissions, negotiating skills, fear and uncertainty, and the varied
motivations of both buyers and sellers.
On the other hand, if things
continue along with the same pressures as I see now, we’ll likely see
drops of 15% to 20%. If conditions fail to improve in the next 6-18
months, or are exacerbated in some way, then I think we could see
larger drops in value, and a more prolonged decline.
Of course, there are many
markets and sub-markets throughout the country, and some are more
volatile and some more insulated than others. There will be some
exceptions and some extremes. In general, though, I believe we’re in
for some more decline.
7. How long do you think
it will be before we see prices come back to the levels they were
before the crash? Are we talking months, years or decades at this
point? We know this is pure conjecture, but what is your gut feeling
based on many year's experience?
That’s a long way to go back
up, especially since we’re still going down at this point. I’d have to
estimate as much as a generation, at least for the areas that are
being most impacted. It got so overheated with lenders, buyers and
borrowers making mutually terrible decisions. Everyone is going to be
wary for a long time, especially because this became such a
speculation-driven run up.
Besides lots of average
homeowners forgetting common sense (and forgetting that even
attractive loans still require repayment) and assuming (speculating)
that values would keep going up, there sprang up a whole class of
everyday people that became speculators, and actually went out and
bought second and third homes to turn over. These were people who
otherwise don’t do real estate deals, because the market doesn’t
normally afford that kind of opportunity. There was a huge disconnect
from what typically drives a real estate market. Most people probably
won’t go near real estate speculation again, will be careful in their
future borrowing, and will be wary of buying more houses than they
need and can afford. So, until they’re no longer the primary buyers
and owners of real estate, and their kids and grandkids stop taking
their advice, we probably won’t again have conditions that will lead
to a rapid increase in values.
Of course, natural growth
and demand do cause values to rise, but it could take 10-20 years of
typical appreciation (1-3% per year in traditionally less volatile
areas, to maybe 3-6% in more active markets like California, the East
Coast and Florida) to cover the ground of 4-8 years of frenzy. And
that will be after the current downturn stabilizes, meaning
oversupplies are absorbed, foreclosure and defaults have run their
course, indebtedness is at normal levels, and healthy market
conditions are back in place. That in itself will probably be another
year or two at best. It doesn’t seem likely that the down cycle will
last only 2-3 years, considering the last one lasted 3-6 years when
the underlying problems were not as bad. To summarize, to get back to
where we were at the peak, at least in the areas hit the hardest,
we’ll need the time it takes to stabilize, at least a year or two, and
then, depending on where things do stabilize, likely a decade or two
of healthy and typical appreciation.
David again… my sincere
appreciation to John for taking the time to work with us on this
interview. Correlating his remarks with those of Andy Miller, and
taking into account the sheer magnitude and importance of the real
estate markets to the U.S. economy, I think the picture painted is
fairly bleak.
That said, per Andy, when
this wildfire eventually runs its course, it will create the
opportunity of a lifetime for investors who have avoided the worst of
the losses and have their capital intact.
As an aside, if you are,
like John, an insider in a business with experiences that you think
other subscribers would like to hear about, drop me a line at
david@caseyresearch.com
Democracy Versus Republic
As you may have noticed, I am no big fan of the idea of democracy
because, in time, democracy inevitably devolves into a fight – with
votes – at the public trough. Today, over 51% of the populace of the
U.S. are net recipients of money from the U.S. government (read: their
fellow citizens).
But if not democracy, what?
In my view, it is a republic… a form of government whereby the
government is limited to specific functions and no more, and where
rights are inviolate and not subject to tampering by whichever gang of
powerseekers have captured the flag.
On this topic, one of the
participants at the Summit wandered over to me to share the following
illustration of the difference between the two forms of government:
In a democracy, two wolves
and a sheep get together to decide who they are going to eat for
lunch.
In a republic, eating the
sheep would be outlawed.
Universal Health Care
Anyone?
At this point, given the high cost of health care, the high levels of
indebtedness which makes those costs unbearable to so many Americans,
and because changing the system is as easy as voting in the Democrats,
it is my opinion that universal healthcare is a sure thing for the
U.S.
Given my time constraints, a
more detailed discussion of the wisdom of adopting this large-scale
giveaway will have to wait. But I would like to share a couple of
anecdotes that will give you a hint as to my general views on the
topic.
The first came out of a
newspaper I picked up on a recent trip to Canada. The first paragraph,
about patients in Ontario, pulls back the peel on the rest of the
story, and reads as follows:
“More than 400 Canadians
in the full throes of a heart attack or other cardiac emergency have
been sent to the United States because no hospital can provide the
lifesaving care they require here.”
In the same newspaper (the
Globe & Mail if I recollect correctly), I also noticed large ads paid
for by the Canadian government, couched in a pleading language, for
doctors. Given the sheer volume of red tape and effective income
restrictions doctors in that country are saddled with, it is no wonder
so many of their best and brightest now practice their professions
here in the U.S., and there are shortages up north.
My second anecdote comes
from a fun service I subscribe to called “This is True” (thisistrue.net).
Here it is…
“PLEASE HOLD: More than
43,000 patients had to wait outside in ambulances for at least an
hour last year before they could be seen in Britain's National
Health Service emergency rooms. Standards require that patients must
been seen within four hours when they arrive at an emergency room,
so when busy, patients must wait outside so the clock doesn't start
ticking.”
Who knows, maybe the
government in the U.S. will learn its lessons from the various
universal health care systems being employed around the world, and
won’t let politics or demands from constituents drive the creation of
a system that destroys the few remaining positive aspects of the U.S.
medical system… or beggars the country any more than it already is…
but that is a long-shot hope at best.
Inflation? What
Inflation?
Last week I shared the story of my mother’s childhood residence, in
Mont Clair, New Jersey, purchased in 1929 for $45,000, and sold below
that price almost 20 years later.
My friend of long standing,
Ian McAvity, the editor of Deliberations, an excellent service
for those of you who lean toward technical analysis, dropped me an
email with the following message.
David,
You might be amused that
Zillow.com estimates the value of 10 Sutherland Road, Mont Clair, NJ
at $1.24 million currently.
Ian
So, $45,000 to $1.24 million in about 63 years. But it is worse than
that, because the former family homestead was, according to my mother,
subdivided into a number of lots, so the actual current value of the
property is likely closer to twice that value.
I said to my wife the other
day, following an expensive meal, that I need to recalibrate how I
think about money. Simply, $20 is no longer the $20 I remember from my
youth, but is actually more like $2.00, or even $1.00.
Thus, a dinner bill of $200
for a family of four at a decent restaurant should not evoke a
reaction such as “$200! This is ridiculous! How does anyone manage to
survive these days, let alone save any money!”.
Rather, recalibrating my
sense of value to the brave new world whose air we now breathe, my
reaction should, going forward, be nothing more than, “Nice dinner,
and look, it was only $20.”
A self-delusion, or the new
reality? You decide.
Bearish Questions
Ed Steer, the hardworking contributing editor to our Daily Resource
Plus, sent along an article from Reuters on the Bear Stearns buyout,
which I thought you would find of interest. I certainly did. Here’s an
excerpt…
NEW YORK -- Stunned Bear
Stearns shareholders who saw investments virtually wiped out
overnight when a takeover deal with JPMorgan Chase was unveiled are
demanding to know how it was put together in the first place.
For instance, they -- and
Washington lawmakers -- want answers on how the deal was arranged,
and gained government approval and financing, all in a few hours,
and seemingly without alternative bidders being canvassed.
They also have a host of
questions about the role of the Federal Reserve and the Treasury
Department in engineering the emergency deal.
So far some crucial
details remain murky.
"Under the circumstances,
shareholders should be entitled to know just about everything," said
James Melican, chairman of shareholder advisory firm Proxy
Governance Inc., which is expected to make a recommendation to
investors on whether the deal should be approved.
"There needs to be full
disclosure of exactly what happened over the weekend," he said.
Investors have "an absolute right to know whether there is any other
alternative mechanism that could either keep Bear Stearns in
business or at least have them get a more appropriate price for
their shares."
Billions of dollars in
shareholder value have been wiped away in the last week. Based on
current market prices, the takeover is valued at $2.41 a share, a
shockingly low offer compared with Bear's $159 stock price last
April.
Another highly unusual
aspect of the deal is the way JPMorgan Chase & Co. has been allowed
into the Bear Stearns Cos. Inc. to provide "management oversight of
its operations."
If shareholders were to
reject the JPMorgan offer, JPMorgan still would have been in a
position to understand everything about Bear's trading strategies,
staff quality and assets.
JPMorgan even has an
option to buy the Bear Stearns' building if the deal collapses.
Congress also wants
answers, particularly on the involvement of the Federal Reserve in
pushing the deal, which came as Bear Stearns faced a sudden cash
crunch and possible collapse. In an unusual move, the Fed agreed to
lend $30 billion to fund illiquid Bear Stearns assets to help seal
the takeover.
Among the unanswered
questions are:
-- Were other parties
asked to bid on Bear Stearns, or did the government solely approach
JPMorgan about the takeover?
-- Were any overseas banks
or private equity firms asked to consider a bid, or did the buyer
have to be a large U.S. bank?
-- How did the Federal
Reserve arrive at the $30 billion figure and did it discuss with
Bear whether it was preferable to arrive at a quick sale or explore
a bankruptcy filing?
-- How could due diligence
be done and the deal approved in the space of a few frantic hours on
Sunday?
-- And how can a party
taking over another be allowed to run the target before the deal has
gone through?
With so many unknowns, the
Senate Finance Committee is reviewing the sale and particularly what
implications it may have for taxpayers. On Thursday afternoon the
committee's top Republican, Iowa Sen. Chuck Grassley, said he wanted
details of the Fed's financial support of the deal, as well as how
Bear insiders were being treated under the buyout.
In the House of
Representatives, the chairman of the House Oversight and Government
Reform Committee also wants to know more. The committee is
conducting a "preliminary review" of the deal, an aide to Democratic
Rep. Henry Waxman of California, who chairs the panel, said on
Thursday.
A decision on whether to
launch a more formal investigation or to hold committee hearings
could take several weeks, said the aide, who declined to be
identified. The aide added that the Bear Stearns developments
dovetailed with separate hearings that Waxman's committee has
conducted on compensation packages for top executives at troubled
firms.
Here’s a link to the full article.
And That Is It For This
Week…
As usual, I have so much
more I would like to discuss. But unusually, I have almost no time to
dive in further.
I will leave off, however,
by saying that I was pleasantly surprised while idly looking through a
discarded copy of USA Today, while waiting for yet another jolt of
caffeine to be delivered, to find the front page article of the Life
Section of that publication dedicated to a glowing discussion of the
town of Cafayate and the surrounding wine country, where my own
favorite partner of all times is building out his own version of
Galt’s Gulch. (You can view more at
www.cafayateliving.com).
Doug has always had a
spectacular eye for moving into the right real estate markets at the
right time, and it looks like he’s done it again.
In any event, it is time to
wrap these weekly musings and rush madly for the airport. Next week I
will be writing from the forebodingly named Jekyll Island, Georgia,
where Doug and I will be spending a few days in good company further
pondering the world as we know it.
Until then, thank you for
reading and for subscribing. And a special tip of the hat to all of
you who attended our Summit. I have said it before, and I’ll say it
again, our subscribers are a remarkably philosophically sound and
interesting lot. It is always a pleasure to spend time with you, and
the Scottsdale Summit was no exception.
Very sincerely,
