[Chapter 880: The Rich and The Foolish 2.0 Edition]
Once the term "expert" beca a profession, no one could take their word seriously anymore.
"When did the White Fund start buying up real estate? Fulton, isn't the Wall Street Journal considered a serious publication?" William White chuckled as he waved the newspaper in front of Fulton.
"I read the paper this morning. They were quoting so experts, but it was all nonsense from start to finish. Since we have White Properties, why would we need to go through a fund to buy land? Sir, should we clarify this?"
"Haha, no need. Pentagon is just hoping everyone invests in real estate. It's best if they stay out of other business ventures too; we shouldn't undermine the market."
"Buffett said gold has no investnt value. What about real estate? Shouldn't that be considered a liability?"
William chuckled quietly, thinking, how could it be a liability? The inability to generate value was one thing, but the excessive printing of dollars was truly concerning.
Investing in gold didn't make sense, and stocks were too risky. If residential properties could appreciate, then why not go for a bigger buy?
Three bedrooms? Too few, let's go for five, even though he didn't have a wife yet.
The U.S. housing market wasn't like that of China. In fact, housing markets worldwide differed significantly from China's. Whenever the housing and stock markets surged, one would see that U.S. consumption data looked fantastic.
Yes, houses didn't need to be sold, and neither did stocks. These were all mortgaged to the banks, so now that prices had risen so much, why not take more cash from the banks?
How did the subpri mortgage crisis happen?
So people without stable incos bought hos with down paynts covered by developers and paid back the loan once the bank approved it.
What? No inco?
Simple. Prices were on the rise, so they'd just go back to the bank for more money. At one point, you didn't even need to work because ho prices kept climbing, and you could use that money to travel the world.
Every family needed a ho; they should all have a chicken in the pot. In short, this was the so-called Arican Dream.
When President Hoover promoted this idea back in the day, he clearly didn't foresee that many Aricans would be struggling to even find black bread.
Despite that, any president thinking of the Arican Dream would be concerned about it.
Whether intentional or aspirational, the world now was like this; except for the few who lanted, everyone played the sa ga.
Selling houses was great; the governnt gained not just land revenue but also a massive tax inco. You had to renovate once you bought a house, and old furniture and appliances soon beca worthless.
This generated consumption, which boosted GDP. With those things rising, employnt improved, and everyone made money.
"Wow, achieving the Arican Dream is so simple," he thought.
"Fulton, your point isn't entirely accurate. When considering depreciation and maintenance, buying a house isn't cost-effective. From the perspective of scarcity, money is becoming more abundant, but good land remains limited."
"Sir, our land area is quite vast. Take China, for instance; their population density is so high that housing prices can plumt swiftly.
In my opinion, comrcial real estate might hold value, but residential properties lack investnt worth."
"Hahaha, I see where you're coming from. Houses are ant for living, yet people strip the monetary properties from gold and assign them to real estate.
If this continues, no one would compare assets anymore; they'd just pull out their property deeds and count them.
However, despite this, the trend in investnts isn't going to reverse."
Fulton could only smile ruefully. The world worked in strange ways; you could never wake a person pretending to be asleep.
Nothing could rise without falling, nor could things only fall without rising. Fulton could easily imagine if the situation in China happened in the U.S., it would be catastrophic.
Compared to that, people in China seed sowhat restrained. There were those living paycheck to paycheck, but their borrowing was quite limited. The U.S. was different; if house prices crashed, those without stable incos would be the first to flee.
"Andy, when did the White Fund start investing in real estate? Don't they already have a property company?"
"Sir, that's fake news. They did buy land; it's mostly in remote areas--looks more like logistics expansion, just slightly larger than usual."
"Logistics center? Like those few small grocery stores?"
"Sir, that's what I wanted to tell you. Adjustnts will happen to Arica's 7-11s significantly. All those grocery stores in gas stations will shut down within a week."
The head of Morgan Stanley was dumbfounded. Was the authorization they went to such lengths to obtain just to shut them all down?
If so, why would they even bother; was this really what they terd the rich being foolish?
What the big boss thought wasn't clear, but Andy's view was straightforward--this was that billionaire's annoying tendency again. Perhaps he rely disliked those two numbers.
"Andy, help clarify this. Investing in storage undoubtedly expands operations?"
"Yes."
"It certainly can't be about real estate?"
"Impossible. While the surrounding safety conditions are decent, it lacks the traits of a high-end community."
"So, what exactly is the plan? Let's not hear outrageous excuses; I don't want to be part of that.
Damn, do you know we've beco a guiding light? Whatever Morgan Stanley endorses tends to fail. Whatever we disregard is fervently embraced by the market."
Andy fell silent; they had brainstord to no avail, failing to uncover any rationality behind William White's moves.
Alright, they may have underestimated the value of the 7-11 brand. To them, this thing was worthless.
If you started wrong, how could you get back on the right track?
If 7-11 was genuinely without value, then only a madman like William White would take on this ss. Closing stores and laying off workers incurred significant costs.
In truth, not even the think tank or Fulton acknowledged the value of 7-11.
Sure, they did well in China and Southeast Asia. As for Arica, cough, it was essentially garbage. Forget about the value; it was, in fact, a liability.
7-11 wasn't the only 24-hour convenience store in the U.S.; if not for William White's stubbornness, this deal wouldn't have even been pursued.
Others didn't know, but William White was no fool. With so many 24-hour shops existing, was there any one that could compete?
No, not a chance. Lawson was decent too, but only in China--because the franchise conditions for 7-11 were tough to et.
As for others, you'd only learn a little bit. Is running a supermarket easy?
Too easy; it's just an upgraded version of a corner grocery store.
Many believed they could do it, and nurous attempts were made. Sadly, only a handful survived, and most wouldn't see profits at all.
In William White's eyes, there were two kinds of convenience stores. One was called 7-11, and the other was everything else.
It was that overbearing; no matter how unimpressed you were, nearly $60 billion in sales annually, at a 34% average gross margin, was simply overwhelmingly powerful.
*****
spatreon/Sayonara816.
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