Archive for November, 2009

I’m fed up with the stock exchange

November 19th, 2009

Perhaps its time to go for real estate

My newspaper is featuring an article on the merits of investing in real estate versus stocks. It’s a never-ending debate with vehement opinions in both directions. The two sides hunker down and hear only their own claims, or focus on timeframes that support their own views. Advocates of property will always have a story about some guy who bought into a neighborhood that became trendy and made a killing, while ignoring the others who lost money on a property fling. Proponents of stocks will rebut with tales of people who made a fortune and ignore the ones who chose companies that collapsed.

Investing

There’s little point in expanding the debate to cover every stock index and every home on the market. Everyone has his own war stories about investments, no matter in what. Given that there is no clear-cut answer to the question of real estate versus stocks, there is no point in dwelling on it. Just as there is no consensus about past figures, it would be hopeless to start making predictions about the future. I hope everyone has enough money to invest in both stocks and property.

Returns

In general one could say that investment in stocks over the last 10 or 20 years has been terrific. On average, if you bought a diversified portfolio and let it sit there for years, you did well. But the same is equally true for the real estate sector. But as the argument rages and analysts vie to analyze figures from the past, one point has been forgotten, and it’s a lot more important than whether a given investment avenue generated returns 1% greater than another.

Long term

The question is, how many investors actually benefited from long-term investment in stocks and how many benefited from long-term investment in property, meaning people who bought apartments and leased them to others, not people who bought apartments to live in themselves. I have no data on the issue. But my personal impression is that I don’t think there are many people out there who were directly active in the marketplace, who sat on portfolios for the long term without twitching. I don’t mean people who own stocks through long-term savings vehicles such as provident funds or insurance schemes; they don’t have any decisions to make there.

Summing up

I know many active investors who lost their shirts on stocks, but very few who lost everything in the real estate market. Why? One could argue about the merits of stocks versus property, but the fact that stocks have generated handsome returns is unarguable. They have, period. So why have so many people lost money on them, while so few have on real estate? The answer does not lie in their choice of investment avenue. The answer lies in human nature. Simply, when people buy a property for investment purposes, they behave like true long-term investors. When they buy stocks, they behave like speculators and succumb to spasms of emotion.

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African Business is Booming

November 17th, 2009

Pirates Free Crew of Spanish Vessel

The poor peoples of Africa learn fast, that’s clear. If they can escape the drought, the AIDS, the poverty and disease, they become a major force in world politics. I suggest they don’t become too confident and smug about their successes – it could all end very suddenly in the “high risk – high reward” world they trade in. Typically, pirates press for ransoms totaling millions of dollars in return for freeing crews.

The name of the game is piracy

There has been a recent upsurge in the incidence of hijackings and attacks on shipping in the Indian Ocean and the events continue unabated, with pirates commandeering a chemical tanker with 28 North Korean crew members and trying, apparently unsuccessfully, to seize a Ukrainian cargo ship. The chemical tanker, MV Theresa, registered in the Virgin Islands and operated from Singapore, had been heading for the Kenyan port of Mombasa when it was hijacked Monday in the south Somali basin, 180 nautical miles northwest of the Seychelles, the European Union’s naval force said in a statement on its Web site.

Ukrainian cargo ship

Pirates also attacked a second vessel, a Ukrainian cargo ship, but came under fire from private security guards on board the ship. The European naval force said the ship was not commandeered, but a person claiming to be a spokesman for the pirates told The Associated Press that the hijacking was successful. Two Somalis were wounded by gunfire.

Security forces

A security force is operating in the area. The European force is made up of frigates and maritime reconnaissance planes from seven European countries, including France and Spain, under British command. But with the European and other navies focusing their patrols off the Horn of Africa, pirates in fast skiffs, usually armed with assault rifles and antitank missiles, have begun to roam farther.

A major industry

In addition to the 14 commercial vessels now under their control, pirates are also holding a British couple, Paul and Rachel Chandler, snatched from their 38-foot sailboat off the Seychelles last month. A Somali pirate boss named Red Teeth said in an interview this month that his gang of pirates had whisked the couple to a lair on shore, as the pirates apparently began bickering among themselves about what to do next. The couple reportedly has little money and the British Government says it is not involved in this case. Things do not look good for the Chandlers.

October was a good month

Some of the vessels have been held for months and there has been an upsurge with six ships overrun in October, an increase ascribed by piracy experts to calmer seas after the monsoon season when storms hamper would-be hijackers. According to the privately-funded International Maritime Bureau’s Piracy Reporting Center, Somali pirates have launched a total of 195 attacks on shipping this year, compared to a total of 111 for 2008. Not all attacks lead to hijackings, but the figures nonetheless show a significant increase in pirate activity.

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It will be one of the world’s largest buildings

November 16th, 2009

Forget about Las Vegas, we’re flying to China

The US casino operator has announced plans to resume work in January on its multibillion-dollar gambling resorts in Macau after suspending construction last year amid a massive funding crunch. The project will add 6,000 hotel rooms for Sands China in Macau, compared with 3,554 it had as of June 30, according to the new prospectus, which was recently issued. The company will hire as many as 13,000 workers to finish the construction which is slated for completion in December 2011. The phase, consisting of one of two Sheraton-branded hotel towers and some retail centers, will add hotel rooms and a casino with 670 tables which would open in June 2011. It all sounds like a story out of one of those believe it or not books. As for staying in 6000 room hotel…

The Las Vegas Sands Corporation

The Las Vegas, Nevada-based company owns and operates Resort-Hotel-Casinos in Las Vegas and Eastern Pennsylvania. The company also owns and operates Resort-Hotels in Macau, China. In addition, LVS owns a hotel and is building an integrated resort in Singapore. In Macau the company is planning the development of resort-casino properties in Macau. At completion, the Cotai Strip will feature approximately 21,000 rooms from world-renowned hotel brands such as St. Regis, Sheraton, Shangri-La, Traders, Hilton, Conrad, Fairmont, Raffles, Holiday Inn, and InterContinental.

IPO

This week Sands will seek to raise more than $3.3 billion from an initial public offering of shares in its casino businesses in the southern Chinese enclave, the world’s largest casino market. Executives said that about $500 million will be used to restart construction on the projects. The company plans to hire as many as 12,000 workers after 11,000 jobs were cut as a result of the suspension.

Sheldon Adelson

Sheldon Adelson is an American billionaire businessman. He is a property developer and public company CEO. Adelson is Chairman and Chief Executive Officer of the Las Vegas Sands Corp., the parent company of Venetian Macao Limited which operates The Venetian Resort Hotel Casino and the Sands Expo and Convention Center. Adelson vastly increased his net worth upon the initial public offering of Las Vegas Sands in December 2004 by selling just 10% of the shares. At its peak, Adelson’s estimated wealth was of $26.5 billion, making him the third richest person in the United States according to Forbes for both 2007 and 2008. In the 2009 list, his ranking dropped to #178 with a net worth of $3.4 billion.

What now, Adelson?

Inside the Venetian casino in Las Vegas, past the whirring slot machines, the canals and singing gondoliers, Adelson is plotting the next phase of his company’s expansion. The 76-year-old billionaire is poring over plans for Marina Bay Sands, his new $5.5 billion casino hotel project in Singapore. It’s been a tumultuous year for his group. With markets tumbling following the collapse of Lehman Brothers last September, shares in Las Vegas Sands fell 99 per cent.

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