Saturday, August 18, 2018
Straight Talk from Al Jacobs
ADVICE TO YOU LENDERS
With not much profit to be gained from bank savings accounts
or stock dividends, many persons are looking for other places to put their
spare investment cash. One possibility is the lending of money. Irrespective of
Polonius’ advice to his son, “Neither a borrower nor a lender be,” from Act 1
of Shakespeare’s Hamlet, sensible
lending can be a viable road to prosperity…though sensible is the operative
word.
I received a call from a close friend this morning asking
whether I’d care to join him in a proposed housing project here in Southern
California. It involves financing the purchase of acreage on which homes will
be built. Security for the loan would be a first deed of trust (similar to a
mortgage) on the land. As houses are completed and sold, portions of the land
loan will be systematically paid off. The attractive aspect of the offer is the
loan’s interest rate: 12 percent per annum.
Although I’m actively involved in trust deed lending – and
presently at only 7½ percent – I reluctantly turned this offer down. Let me
explain why. My investment will be as a minority-interest outsider with no say
in any aspect of the project. If I fail to receive scheduled installment
payments, I’ll have no recourse other than file a lawsuit. If the land drops in
value or the houses are not built and sold as planned, I’m not sure what I’d
do. If the loan goes into default and I eventually end up as part owner of
vacant land with a group of strangers, what then?
My current lending operation is quite different. I loan on
non-owner-occupied residences and small apartments. All loans are held by my
corporation. I evaluate every one before approving it, service each loan personally
and take appropriate actions as required. If a borrower defaults, I know
exactly what to do. Should a trust deed sale (similar to a foreclosure, but
non-judicial) be required, I handle it as the Trustee of record. In deference
to Murphy’s Law, there are as few uncertainties as possible.
A final comment: There are many firms which make real estate
loans available to the investing public. Some are good – some not so good. With
a bit of inquiry and analysis, you can figure out which are inherently sound
and which to stay away from. When you locate one or more you like, you may
choose this as an investment route. Though it may not qualify as nirvana, it
beats Chase Bank’s 0.01percent savings rate.
Al
Jacobs, a professional investor for nearly a half-
century, issues weekly
financial articles in which he
shares his financial
knowledge and experience.
You
may view them on http://www.roadwaytoprosperity.com
Saturday, August 11, 2018
Straight Talk from Al Jacobs
DEMENTIA IN THE CROSSHAIRS
A recent Online article suggests researchers have come upon
the first two potentially effective Alzheimer’s medications ever developed,
named Anavex 2-73 and BAN2401. As a result, dementia specialists met in Chicago
to discuss the findings, which breathes life into the possibility that whatever
factors drive or contribute to the disease can be effectively targeted and
eventually pinpointed, in hopes of ridding mankind of this pernicious scourge.
However, the possibility a single drug, or even a series of them, may not be
the answer was expressed by James A. Hendrix, director of global science
initiatives at the Alzheimer’s Association, who said “Maybe one-size-fits-all
is not the best approach.” This acknowledges a growing likelihood the ailment may
be many different diseases.
It has long been my belief Alzheimer’s disease – which at an
earlier time was known as dementia or senility – is a mental aberration resulting
from any variety of malfunctions that plague the human body. It’s long been
recognized professional prize fighters can develop these symptoms, apparently
the result of repeated blows to the head. It’s also known certain chemicals can
be the source. As one example, children overexposed to the element lead will
develop cognitive impairment. There’s a third circumstance which I believe to
be, far and away, the most common cause of mental deterioration in persons as
they age. This is what may be best described as long-term diminution of oxygen
to the brain.
Let me offer a theory for consideration. It’s well known cerebral
hypoxia –impairment of brain function
– can result from acute oxygen deprivation. Is it therefore not possible
long-term oxygen reduction may slowly result in those symptoms identified with
Alzheimer’s? As we age, we’re less physically active, so there’s less oxygen
flowing to the brain through the carotid arteries. The result: garden variety
senility.
I’ll now pose a question: Why is mild oxygen deprivation not
aggressively researched as a likely cause of Alzheimer’s? I‘ll offer an answer:
There’ll be neither research grants nor pharmaceutical stipends for such a
quest. In short, there’s not much profit to be reaped by simply encouraging
oldsters to vigorously walk four miles at a clip or visit the local YMCA for a
daily swim. And God forbid that Alzheimer’s should actually be cured, and the
research profits ended. Thus it will continue to be business as usual.
Al
Jacobs, a professional investor for nearly a half-
century, issues weekly
financial articles in which he
shares his financial
knowledge and experience.
You
may view them on http://www.roadwaytoprosperity.com
Saturday, August 4, 2018
Straight Talk from Al Jacobs
WELCOME TO 1957
In jest, I recently suggested to a friend that I’m living comfortably in 1957. When questioned what I meant, I confessed to having lost all toleration for what the 21st Century has become and decided to relegate my life to a more lucid era. Specifically, I’ve embraced skepticism – which by definition decrees “Ninety-five percent of everything is nonsense” – and now choose to confine my activities, as much as practicable, to the other five percent. How is this possible? Let me explain it to you.
I’ve disconnected my television, so President Trump’s proclamation 21 million illegals are to be deported, Governor Jerry Brown’s assurance his proposed Bullet Train will soon be carrying passengers, or Elon Musk’s announcement Tesla will make a profit this year, will not be flashed onto my TV screen. Although I still subscribe to two newspapers, I systematically avoid viewing any articles relating to celebrities in the process of castigating one another, multimillionaires apologizing for their sexual misbehavior, elected officials accused of uttering defamatory statements as teenagers and lawsuit settlements awarding millions of dollars to men who claim to have been denied entry to women’s restrooms.
Things are now looking up, for the calendar on my wall dates back to a time when popular music on the radio normally included a melody, where comedy actually consisted of more than a continuous flow of profanity, and athletic events were devoid of constant reminders the United States practices rampant discrimination. For this reason, I revel in the knowledge a thoroughly likeable Dwight Eisenhower is our chief executive, students can attend universities without incurring loans they’ll eventually be making monthly payments on from their Social Security benefits, and you’re able to purchase a new home in a desirable location at a price no greater than four times your annual gross income.
You’re now justified in asking me when, if ever, I’ll be returning to the 21st Century. It’s a fair question, and I’ll tell you. I’ll be back when our government begins to enact and enforce rules and regulations which truly make sense; when some sort of societal rationality replaces the hysteria which is now perennial; and finally, when the tax paying citizen is once again treated as more than merely a pocket to be picked. In short, I’ll return when I’m once again confident my presence is welcome.
Al Jacobs, a professional investor for nearly a half-
century, issues weekly financial articles in which he
shares his financial knowledge and experience.
You may view them on http://www.roadwaytoprosperity.com
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