GOLD ! Norair Yeretsian

The Gold Obsession : Real or Hype ?

It has been around for thousands of years.

” We have gold because we cannot trust Governments.” said President Herbert Hoover (1933) .

Was President Nixon right to end the Gold standard (1971) ?

Did the American and world economies just out grow the restrictive Gold standard ?

” They wonder much to hear that gold, which in itself is so useless a thing,
should be everywhere so much esteemed, that even men for whom it was made,
and by whom it has its value, should yet be thought of less value than it is. “
Sir Thomas More (1478-1535) Utopia of Jewels and Wealth.

A obessive yellow piece of metal called : Gold.  Who says it has any value ?

What is the value of  Gold and why should I care ?

I do not like Gold, neither its look or its concept of a storage of wealth.

We , Man say it is so — valuable, a treasure, something we need to show we are wealthy.
The powers that were – said it was an item of  worth. So men would seek it out and fight for it.

” Who has gold has a treasure [that] even helps souls to paradise.” 

 Even religious groups joined in the chorus for Gold.

Gold is not going to save you.

If you are lazy, unproductive, unimaginative, lacking creativity, drive, will and determination , your fortune will never come.

Seeking Gold is an old idea, whose time has come and gone.

What is value but some intangible thing that most of us may agree upon ?

Fads have come and gone, but Gold has been consistent – people have desired it.

It is easy to move and in the old days played the role of a common international currency.

War breaks out, take your gold and run !

A story was told about a hundred years ago about this supreme possession;
” a man who boarded a ship carrying his entire wealth in a large bag of gold coins.
A terrible storm came up a few days into the voyage and the alarm went off  to abandon ship.
Strapping the bag around his waist, the man went up on deck, jumped overboard, and
promptly sank to the bottom of the sea.
Asks John Ruskin: ” Now, as he was sinking, had he the gold? Or had the gold him ? “

This is a new age, so maybe we are beyond it, get over it and around it.

 It was political and economics mixed in, as we moved to this new age.

New Rules and not the status quo, those that have the Gold ruled.

On the investment side was Gold a good investment ?

Valued at $ 35 / ounce in 1970 , by January 1980 to$ 634 then rising to $ 850 record high January 21 .

By 1985 the value/price was $300/ounce, the stock market crash of 1987 caused a bump to $ 486.

” At the end of 1997, gold broke below $300. It had fallen by more than 60 percent in the course of less than eight years.”

( The Power of Gold : Peter Bernstein, 2000 ) 

As of this morning $1247 Canadian / ounce and chatter that it May be going up to $ 1500 ( Sept/2010).

Is this a good investment?  What about the  volatility over the years ? 

Gold is supposed to be a store for wealth and a hedge against inflation ?

 However the proof is not in the numbers over the years, too many bumps.

Gold does not pay dividends , No cash flow. So it is only speculative .

So you have to be a good market timer to make money.

Not just understanding the local market but one who understands and follows the global market place.

As well as making all the right calls on gold, in a complex system of currencies,governments
and geo-politics and the world of speculators. This is not the play ground for the small investor to consider.
Exercise caution !

What are your thoughts about Gold , does it command your attention ?

Let’s discuss it versus other investment opportunities ,

 Join us : www.yinvestthinktank.blogspot.com

Twitter : EnvoyCapRealty

Envoy Capitol Realty Inc., brokerage     Toronto , Canada
Buy/Sell/Lease/Manage/Develop/Syndication — Investments

email :  capitalmoves@gmail.com

Blog: www.capitalmoves.blogspot.com

Nor Yeretsian   [ Facebook ]   (  September 13,2010 )

How do You want to define Profit ? Nor Yeretsian

How would you like to define PROFIT ? And when I say PROFIT what do you understand it to mean?

There are so many view points on this . PROFIT before tax , Profit after tax.  

Net Profit / before and after tax . You can lose or not

make a profit at all however — still be okay, doing ok for now.

 One day there will / may be a profit — yes ?

Sale proceeds before taxes and after taxes.

 Profit before depreciation,interest ,… / Profit after depreciation, interest,…

The whole confluence of tax measures, accounting terminologies , economic perspectives

 of surplus and we end up with a good deal of confusion and obfuscation of the central idea

 a man / woman goes into to business to try to make a PROFIT.

I guess you know it when you see it .

Why all the mystic with the concept of PROFIT ?

 PROFIT seems to have a negative image in many circles.

In some circles , Profit means you took advantage of  some one else in a weaker position.

You out negotiated them. You paid below market and you sold either at market value or above.

Profit is a good thing.

 We need you to make a profit, otherwise you will not pay taxes ,

 you will not have a surplus to invest in plant expansion, innovation / invention .

Yes you will live better — but that is your reward for being smarter and more creative.

Society needs you and me to make a profit — otherwise no progress to higher and higher ground in all things.

I was at a City council meeting many years ago and a councillor stood up and asked in a unfavourful way:

 ”Are we here to help this developer make a Profit ? ”  Why so negative ?

 Are we simply envious of the people making a profit ? That maybe they are

taking an unfair piece of the economic pie  and that it may have been at someone’s expense ?

Profit is the life blood of business and all individuals. It’s what we tax.

It is the reason you and I get out of bed in the morning, put on

clean clothes groom ourselves and embark on a productive day on the streets of our City , in our offices, in our factories , in our

retail stores,  in our hospitals.

I find it interesting that outside of good healthy competition in the market place / in businesses ,

 that there are people,who want to stop you from making any profit what so ever . Envy ?

And so they will make efforts to delay your development application(s), your re-zoning applications ,

 which ends up costing all of us more in every way from employment , financing charges ( carrying costs )

,loss of business, loss of tax revenues, and City spends money dealing with applications .

All this eats into current profits and delays in making profits ( which delays in taxes being assessed and paid on New Developments) .

Could be a lot of reasons, one concern may be the desire to hide it / conceal it. Why so we can keep it !

 Why? Taxes.

We want to maximize write-offs and minimize taxes.

 With governmental inefficiencies and traffic congestions , etc …

There are millions upon millions of dollars of lost productive and lost taxes for society — your community .

Resources — wasted at all levels. We must try harder. We have to be more efficient at all levels.

We should work smarter and We need to make a profit .

It makes the world go round.

What are your thoughts about profit and how to define it.

 What about efficiency in our business and community activities ?

Leave a comment … Join us in discussion at  www.yinvestthinktank.blogspot.com

Twitter : EnvoyCapRealty

email :  capitalmoves@gmail.com

ENVOY CAPITOL REALTY INC. , brokerage       Toronto , Canada
Buy/Sell/Lease/Manage/Develop/Syndication

blog : www.yeretsianonrealestateinvesting.wordpress.com

Nor Yeretsian    ( August 28, 2010 )

We can do better ! by Norair Yeretsian

Just keep it simple.

Try to understand it. Understand how they make money by doing it.

And if you understand the nature of the business — investment and can see

how they make the money this is more than half the battle to making money.

 Well that’s what Warren Buffett says anyway.

Who’s Warren Buffett, a rich guy who started out very modestly .

Charlie Chaplin can still make you laugh  after all these years.

The Classic comedy illustrated by Chaplin is simple – yet golden.

The audience understands it , he communicates with no words.

Yet we ( most ) of us fully comprehend the humorous message.

It’s brilliant.

It’s straight forward , good clean fun !

He captured our lives in his reflective comedy.

What we may have wanted to do in any given circumstance , however we were not / are not brave enough to actually do it.

Watch him, you will love it !

If we could somehow simplife our message to our target market or customers

, so that they are entertained enough to listen and comprehend our message to them.

Learn from the masters . You will be rewarded.

We can do better . We can make it simple to understand and act !

And it can be Fun …

Join Us in discussion as we explore these and other ideas …

at ;   www.yinvestthinktank.com

Twitter :  EnvoyCapRealty

Envoy Capitol Realty Inc., brokerage     Toronto , Canada
Buy/Sell / Lease / Manage / Develop / Syndication

Blog : www.capitalmoves.blogspot.com

Email : capitalmoves@gmail.com

Nor Yeretsian       August 26, 2010

Why do we Buy the Lie ? Nor Yeretsian

We the people love a good story and we follow…

We follow the crowd, we follow our friends and trends.

We might hold off for a while and then we give in.

The pressure is too great, from those around us to conform .

Find a different crowd, get new friends who are more like you want to be and are comfortable being.

Ask all the questions that need to be asked , even the dump ones – take nothing for granted.

Think for yourself , what is your inner voice saying to you.  Listen to it !

Why do we get carried away with the excitement of an economic boom and then over build ?

False prophets … Has the infra-structure been built on false prophets or the

 overtly optimistic forecasts of the decade of overbuilding in the U.S. and now

 everyone is in trouble both private and public sectors .

False or imaginary numbers of the last decade of rising house prices in the U.S. and in any economy.

Where house prices / values and developments are the basis of assessments for rising realty taxes.

The Cities base their forecasts on what is happening in their communities and

 need to build and spend in anticipation of what will / may come.

 Otherwise there will be big problems and the Cities will not work efficiently for their citizens.

The Cities with their teams of planners/advisers should be the sober / rational player , not over build – not over tax .

They are the professionals we were counting on, to make our activities in the Cities easy and efficient.

They were not supposed to be the Problem !

Now how do the citizens who have economic challenges themselves – and the Cities  going to pay for all this ?

When the value/prices of homes and properties comes down 10% – 20% – 30% – 40% + …

How do we adjust the system ?

Or is the system only designed/ built to work in one direction, build + tax more ?  

Is the system at the City level broken ?

Does the municipal system of government and taxation have any flexibility built into it to address economic conditions and local real estate valuations or do we simply stay on a crash course – Where we end up in so much debt that we end up doing mass layoff at the City and major cuts of programmes because No Body was thinking clearly ahead and prepared for both good times and bad ?

This maddening roller coaster ride is bad for all parties : citizen / tax payers / the City / the City’s employees + unions : all lose .

The pain of contraction, job losses , failing real estate values, reduced tax revenues and over looking needed repairs to infrastructure ( roads,bridges,water,hydro,schools,police services,hospitals,fire departments,etc… ) because we can’t pay for it .

The Cities should care about their citizens on many levels, and not take their tax payers for granted.

Cities do not have an endless supply of money and citizens willing to pay for everything the Cities dream up.

Citizens must get involved and choose better leaders. 

 More capable people must get involved and stand for leadership.

Otherwise we will get the Dumb leading the blind down the garden path to nowhere .

Don’t Buy the Lie. Keep it in perspective , at the end of the day someone must  pay !

Let’s discuss it  / join us at  www.yinvestthinktank.blogspot.com

Twitter : EnvoyCapRealty

Blog : www.capitalmoves.blogspot.com

Envoy Capitol Realty Inc., brokerage          Toronto  , Canada
Buy/Sell/Lease/Manage/Develop/Syndicate

Blog : www.yeretsianonrealestateinvesting.wordpress.com

Nor Yeretsian            ( August 18 , 2010 )

The Amero – single unified currency for North America ? Nor Yeretsian

Well some of us are still optimistically waiting for NAFTA to happen.

A level playing field for all businesses in Canada – USA – Mexico .

Open borders with free access for products/services and
people flowing back and forth , something like Europe.

When we mature enough here in North America , we may get there.

The things that would have to change  and the new things we would have to learn and re-learn.

With a new currency – like the Amero .
Valuation of everything into the new currency.

The basic principles of valuation would not change, so it would be good to learn and know them.

This would really be the New World, with free and open boarders and a new currency .

We can see why they , the powers that be – may not want all these changes in an election year.

The implications on many levels from taxation , to zoning , to productivity , etc – would be vast.

Brave New World – of efficiency , less governmental regulations  -
larger private sector working and producing with less down time and
red tape…just imagine the possibilities.

How would all this impact real estate ? 

The value of real estate in your city or town ?

How long would it take for us to learn to adapt to the new system , new rules and new taxes ?

Let’s discuss it at  www.yinvestthinktank.com

email :  capitalmoves@gmail.com

Twitter : EnvoyCapRealty

Envoy Capitol Realty Inc., brokerage     Toronto , Canada
Buy/Sell/Lease/Manage/Develop/Syndicate

Blog : www.capitalmoves.blogspot.com

Nor Yeretsian  ( August 11 , 2010 )

Everyone wants Easy ! Norair Yeretsian

Everyone it seems wants Easy and no one wants to work for it .

Our culture does pressure us to get rich quick or win a lottery.

With the juiced up advertising on every medium selling a lifestyle few can afford with an average income.

Alternatives or a second job must be found. Get motivated !

Real estate is a great way to get rich — patiently , over time.

When you rush it, mistakes happen .

We over leverage to compensate , so that a little rise

in the markets will deliver major success !

However we take on the added risk with the asset purchased and

suffer a greater loss when the markets drift down.

Possessing the maturity of  a patient wisdom in our practices with

our investments and our relationships will reward us over the long-term.

Sometimes slow can be better than fast.

What do you think, have any stories you wish to share ?

capitalmoves@gmail.com

Envoy Capitol Realty Inc., brokerage , Toronto , Canada

nyeretsian@yahoo.com  ( July 25, 2010 )

www.capitalmoves.blogspot.com

July 25, 2010       Nor Yeretsian

Don’t Follow The Crowd ! Nor Yeretsian

It is hard not going with the flow.

There are even books entitled :The Wisdom of Crowds , more act smarter than a few.

It is safer in the crowd , or at least it use to be .

We are human beings after all. We have herd instincts, running with the crowd.

This could be and has been dangerous for investors.

One of the best quotes I ‘ve heard coming from Gov. Sarah Palin, was

when she said that up here in Alaska there is a saying :

“The only thing that goes with the flow is a dead salmon.”

It says something about the fish and something about the direction of the crowd.

At times the crowd may be smarter than a few, elections / the stock market , etc…

However when the markets get hot, and a bubble starts to form -

everyone seems to jump on board and it starts to get scary.

A good book to explore this over the top behavior is Charles MacKay’s  collection

of stories which covers a couple of hundred years and looks at ;

The Mississippi Scheme(1719 and 1720, John Law )

The South- Sea Bubble(1717 -1727)

Tulipomania(1634-1636)

these are classic examples of  Banking ( and paper money )

Real Estate and a Tulip ( an object of affection value ? ) over heated bubbles and Crowds gone wild !

Book reference 1814-1889) Charles MacKay’s  Extraordinary Popular Delusions and the Madness of Crowds .

nyeretsian@yahoo.com   July 21, 2010

Twitter :  EnvoyCapRealty

Envoy Capitol Realty Inc., brokerage    Toronto, Canada

www.capitalmoves.blogspot.com

Love or Money ? + Estate Planning , Norair Yeretsian

Why do we do it ?

Why do we go out each day , risk life , invest our time – risk opportunity of loss ?

Do we do it for Love or Money ?

Most of us do not do it for the love of money.
But necessity ; food and shelter .

Most of us , start doing it for money and we evolve into doing it for love.

That is after we have enough money ( food and shelter, a little reserve ).

However how much money do we need to inspire us to start enjoying life
and doing the things we do for love and be happy.
The answer is as different as each of us.
For some never is enough, for others happiness is here everyday ( regardless of money or material ) .

If we were to quantify life and our  average life span.
Most of us will have 30 to 40 good years to spend 8 to 12 hours a day working or worrying about work.
After which we get a few years of retirement –to perfect our hobbies.
Then it’s over, lights out and we move on to the next level of play.
Some to a higher cooler place others to a lower warmer place.

So if these are the two ends of the spectrum and the game does eventually end for each of us.
We have to play the game each day as if it is our last one. With a bigger dynamic view.

We need to plan our investments with this eventual possibility in mind.
We need to communicate with our spouses and children ( our loved one)
about the investments we make , where and how  they can find them and
have access to them ( add them as a joint account holder ? ).
Talk to a lawyer about estate planning and set up a proper will and last testament
( and keep it up to date , regularly reviewing it 3-5 years).
Discuss your investment philosophy with your loved ones.

Educate them with your wealth of experience.
Discuss taxes with your accountant and arrange your affairs
in the most tax efficient manner and ease of transfer.

Then after all your hard work, your loved ones can have the freedom
to do the things they love and time for contemplation about living and play life to the fullest.
This is what everyone wants for themselves and their children…

Be happy !

What are your thoughts? leave a comment and let’s discuss it.

Twitter @ EnvoyCapRealty

nyeretsian@yahoo.com  July 6, 2010.

Opportunities in the Busted R.E. Economy ? ……… Norair Yeretsian

Big Money is interested again in real estate and they have started buying
with huge discounts off the previous values .
Prices greatly below the previous purchase prices, below the  cost of the
infra-structure paid for sewers/roads and substantially below the
mortgage(s) on these properties.

Where you may ask can an investor/purchaser find these opportunities ?

In the beaten-down markets of Las Vegas and Phoenix.
Where some buyers are getting properties for ten  to twenty cents on the dollar.
Completing the necessary work, and reselling these building lots to builders who
again need these lots to continue their business of building .
As their current inventory of building lots ready to go diminishes.
This is a good news story for real estate in these depressed/ hardest hit areas
of the U.S. real estate market. [ WSJ ]

” Some of the savviest investors [Paulson & Co.] on Wall Street, including some who made
billions on the housing bust, now are snapping up barren plots of land in places like”
: Las Vegas ,Phoenix and California .

Investors are now making a bet that land is undervalued and that it can profit from
reselling lots to home builders.”  The Paulson & Co. is bidding on some 8,000 residential
lots in Arizona,Colorado and Nevada .

Meanwhile in Las Vegas, Angelo,Gordon & Co.” recently paid $35 million for land
parcels zoned for about 2,500 residential lots. That is roughly half the amount the
former owner sank into the property for roads, sewers and other infrastructure alone”.

At the same time says the [WSJ] land investor “SunCal Cos. is working with firms like
D.E. Shaw & Co. to close a dozen land deals in Arizona and California.

Builders including KB Home, Lennar Corp., Ryland Group Inc.,and Meritage Homes
Corp. are cautiously buying prime parcels in preparation for ramping up construction”.

Deep pocketed investors are buying large portfolios of land from banks, bankruptcy courts
and auctions run by Federal Deposit Insurance Corp with hopes of selling them to eager builders.

” The renewed interest in land has led to increases in land prices. In the first quarter,
the average price paid per acre in the U.S. rose to $ 41,651 from $36,829 in 2009 according
to real estate services firm CoStar Group. But that figure still paled in  comparison to the level
seen in 2007, when the average price per acre was $102,631 .

Some private equity firms already have reaped big profits in land deals.

For example: SunCal and D.E.Shaw bought 1700 lots in Las Vegas for
about $16,400 a lot.
Within eight months after the acquisition, the venture sold the land to
builders including KB Home, Lennar and Ryland for between
$35,000 to $ 40,000 a lot. ” [WSJ]

The above are examples from the U.S. market place , real estate is local.
The Canadian experience is much different, City by City.
Canadian real estate did not in most markets experience anything near the U.S experience.

Our systems, financing ( liquidity and credit/ lending practices ) are simply different
and so much less volatility is experienced in the Canadian real estate economy .
Not to mention tax system and stimulus packages less attractive than the U.S.

American news maybe more interesting and entertaining, but their
investment strategies do not easily overlap in Canada.

Land investments are the most speculative and most risky .
Win big and lose big, be careful.

Do your research and use a licensed/insured /knowledgeable professional .

Let’s discuss it , leave a comment….Is it the time to buy ?

Also on Twitter @ EnvoyCapRealty

nyeretsian@yahoo.com    July 2, 2010

Savvy Investors Norair Yeretsian

There’s Lots of Money looking for a home but not necessarily real estate?

U.S. Private Equity firms are on the sidelines with $500 billion waiting for an
attractive opportunity to buy. [ New York Times , 6/23/2010]

One of these is the Carlyle Group which is sitting on $18 billion.
However buyouts have been scarce and prices are rising because
competition for good assets.

The Carlyle Group is also a major Manhattan landlord and
their portfolio is doing very well one of their buildings in their
portfolio of properties is 666 Fifth Ave the retail portion.

Where they just signed one of the biggest retail leases in Manhattan history
with a Japanese clothing company for 90,000 sf of space on 3 floors for
$300 million on a 15 year lease deal , which commences 2011 .
They purchased the retail portion in 2008 and on this leased space  it is
working out to be approximately a 30% return without the benefit of  TVM.

Some of the investment criteria for Private Equity firms ;

Investor’s money is generally tied up for 10 years.

Money must be invested within first 3 to 5 years of funds’ life.

Management fees run approximately 2% of assets value and 20% of annual profits.

They are generally looking for returns in high teens – 20% plus , however looking
forward  investor’s returns over the life of the fund are likely to drop into the low to mid-teens.

Returns will be even lower once fees are factored in.

One factor in the  modest forecast is rising prices for buyouts, because of competition.

The ” tough competition for deals” had driven up valuations recently.

Money is there , but it is patiently waiting to meet an opportunity.

Leave a comment or Twitter @ EnvoyCapRealty

nyeretsian@yahoo.com     June 29, 2010