If an economic sink hole brought on by creative financing and lax regulatory controls weren't enough, there's nothing like straight forward criminal actions to really paralyze investors. As a fund manager of an extremely transparent fund, there is nothing that brings out more fury in me than a few bad apples scaring people to a point of not even wanting to put their hand in the barrel. Sure Madoff is the poster child, but there are a host of...more
Though there seems to be an endless supply of other shoes to drop into the current economic chasm, there seems to be a general consensus that commercial real estate is going to take a significant hit. The shoe that could end up kicking commercial real estate down further and is relatively unknown or just not thought about is technology. Developed countries around the world, save a few, have never gone through such a potentially devastating...more
Recently I spoke with my co-managing partner Michael Facchini, of Regent Global Funds, an alternative investment fund, at an Institutional Investor conference on Distressed Real Estate in New York City. The folks at Institutional Investor did a fantastic job putting it together and assembled a group of very knowledgeable and informed speakers from the industry. Usually when you put together people in the upper echelons of the industry, you find that they are out of touch with the reality on the streets. However, what I found to be incredibly interesting about this event and a bit scary at the same time, was that reality has hit all levels of this market and the individuals that are in charge of pulling the trigger on other people's money are paying attention. Of particular note was the general consensus that commercial real estate is going back to realistic levels and maybe just a bit below as a result of the real estate bubble being popped. We all know that residential has popped and crashed, but commercial has always been a question. I have written several times about valuations on commercial real estate getting back to reality instead of popping, and in my reality I never liked...more
It's time to address one of the most incredible misconceptions in the current environment around real estate lending, which is the idea that all real estate lending is high risk. I hear this often and I understand where it's coming from since it seems to be the media's favorite topic, but this generalization needs qualification. Anytime you are...more
With economies in complete disarray on a global basis, one of the few bright spots has been the massive correction in oil. It was widely speculated that oil was in a bubble and that speculation turned into a stark reality with oil dropping below 50% off its July 11th high of $147.27. The downward pressure came from the demand side of the equation...more
Everyone needs to consider their investments in corporations that have been using job cuts as an alternative to growth, and in essence keeping their bottom line in shape. With the economy in a recession, it's that time again for large corporations to start slashing jobs and trimming the fat, all in the name of profitability. However, I think we may start finding out that there is not a lot of fat to cut, and through this exercise we could be cutting into the bone, or better yet, their revenue generating muscle. If you take a look at many of the large corporations, they have been going through a protracted cutting exercise that hasn't really factored into our employment numbers because of the gradual nature of the layoffs. Up until the last 12-18 months, those unemployed workers have been getting somewhat absorbed into the system. However, over the last year there has been about a 1% uptick in unemployment and that number will most likely continue to rise a bit. The traditional thinking around downsizing is that the remaining workers will pick up the slack, and because of this, it will make a company more profitable. However, what happens when a company downsizes to a point of...more
With the absolute implosion of global financial markets, the investment world is learning that alternative investments need to be private. I don't think there has ever been a better illustration of a "pull down" effect within the last 70 years. It...more
Author: John DashfieldWhen you think about it, every single product and service begins its life as somebody's problem. We all have things in life that we'd rather pay somebody else to do, either because we simply don't want to do it or don't have the...more
This investment perspective comes straight from the rooms in banks that are filled with the proverbial bean counters known as underwriters that are making the lives of hard money lenders very easy and very profitable. It's clear that the banks are...more
Howard Brodsky set out to conquer the carpet world. Dan Bleier just wanted to save his family-owned business. But both cherished their independent status in a retail chain, "big box" business world. Now, each realizes success through a purchasing...more
Most IT jobs consist of doing work in a constantly reoccurring cycle: define, design, create, test, deploy, repeat. When we get our first IT job or when we jump onto a new program, this can all seem so very new and exciting. However, once we reach...more
Corporate frauds undermine organizational effectiveness. Understanding the root causes of corporate frauds and dealing with them is critical to advancing organizational effectiveness and corporate integrity. Understanding corporate frauds is more...more