I haven’t posted anything for a while, mainly because I haven’t felt like I had anything constructive to say. You see, we’ve been selling off our inventory, as Suna and been talking about. But we haven’t been buying anything. Not since December.
Other people were buying things, but we kept walking away without buying or letting other people out bid us. That made me feel as if it were my fault. I must have been doing something wrong.
But I wasn’t.
You see, the only thing worse than no deal is a bad deal, and bad deals are all we’ve been encountering for the past few months. And I’m not the only one.
According to Sovereignman, Warren Buffet has been going through the same dry spell.
So… here is the most successful investor in modern history who:
- Didn’t buy anything in 2017;
- Is stockpiling a mountain of cash;
- Is now selling an asset that he would typically hold forever, because another company made an absurdly high offer for the business
…[I]t seems pretty clear from Buffett’s actions that it might be a good time to take some money off the table and wait patiently for the compelling opportunities yet to come.
Buffet himself has noted that he walks away from more than 100 “opportunities” for each deal he closes.
That got me thinking about my friend Shenoah Grove who points out that the Austin market is now almost ten years into our five year business cycle. And even though the market doesn’t show any signs of slowing down, you have to worry if it is too hot.
Following Buffet’s lead, I think it’s time to wait for deals that are so compelling that they’ll fund themselves or make money even if the market turns down. We may even have some of those on the horizon.
Stay tuned. Or better yet, help us find a really good deal. We believe in sharing the wealth.