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Subject:  Re: Euro savings? Date:  12/12/2004  1:11 PM
Author:  activeREinvestor Number:  11414 of 36764

although there are SOME pockets of assets left that are not overvalued.

Do you believe in pockets of assets that are still an opportunity?

Some assumptions here.

To be a 'pocket' means smaller in size, maybe limited exposure to the investing public and likely to require arcane investing skills that match the asset type.

Would this be an acceptable set of assumptions?

I (and probably the rest of this board) would appreciate your advise on how to lock in 12% while even LT $ treasuries are paying sub-5%?

The boards is not really interested. This is not good or bad, just a valid characterization based on the exhibited behavior.

The boards is mainly focused on mainstream alternatives that have broad exposure and which many people understand.

As soon as we go into exotic options (things that are not vanilla or things that are not broadly followed), the board assumes a high degree of risk must come with returns that are greater the CDs or US government issued debt.

While is has to be true that something paying a good bit more will have some added risks over US government securities, the premium is bid up when you look at 'pockets of assets'

Two examples that have historically paid above the norm while not exhibiting any form of 'high risk'

Loans secured by residential properties
Tax liens issued by county governments and secured by residential property.

In both case you do need to understand how the investment works.

You will also find that there is not a sales commission model that applies so very few folks out there trying to sell such investments. Hence there is not much reason for a stock broker or Financial Planner for recommending such alternatives.

I have posted some details on both investments (more on the loans then on the tax liens). I do not mind discussing further but it is not likely to be helpful to just repeat the same info in a different thread.


PS. Popping up a level.

The conversation tends to split into two buckets.

Those who are focused on preserving capital (no loss of principle and returns that are above inflation by 1%)

Those who want significant growth (high growth stock investors are such a breed). They are looking for returns that produce +5% over inflation and can take downturns over shorter time horizons.

I want high returns over the rate of inflation and no down turns in the short run. Hence I can not focus on bonds or stocks.

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