When I went to Stanford 45 years ago, the price-to-earnings ratio (also known as PE) of stocks was around 9. By the time I sold my billboard business and had money to invest outside of my company, the PE ratio was 18. That really didn't look at interesting to me, as it meant that the value of stocks had doubled without any increase in net income, and I viewed this as a speculative bubble. Of course, I was correct as the Dot.com bubble burst only a few years later in 2000. But that was chump change compared to today. Many investors don't realize that the current PE ratio of stocks is around 38. To put that in perspective, the PE ratio in 1920 – right before the Great Depression began – was lower than it is today, as was the PE ratio in 2007 before the Great Recession. The bottom line is that stocks have NEVER been more overvalued and that's even after the recent collapse in pricing. And one statistic that nobody ever wants to discuss is that the stock market did not go back to its 1965 pricing level until 1995 – that's 30 years of flat!
For those many reasons, I was more than happy to buy income-producing real estate when I sold my billboard business in 1996 and to avoid "traditional" investments altogether. It wasn't too hard a decision given that the PE ratio of stocks yielded around a 5% rate of return while mobile home parks yielded around 20%. I have never regretted that decision.
Many people came to that same conclusion and then we all got hammered by Jerome Powell – perhaps the worst Fed chief in American history – who elected to raise rates to 40-year highs virtually overnight in 2022. Interest rates virtually doubled and CD rates hit 5%. Suddenly, everyone thought that "alternative investing" was over and jumped back into CDs and stocks. It all looked great for a few years until now. The stock market is on the cusp right now of erasing all of its gains over the past year, thereby yielding a 0% return on investment during that period. And CDs are already starting to fall because of the clear movement towards a national recession.
And that does not even count the simple fact that inflation is running around 3% annually and investments that yield 5% of so (stocks, bonds and CDs) are actually losing money after taxes and inflation adjustment.
The bottom line is that "alternative investing" is once again the only pathway to financial progress, with high enough yields after taxes and inflation to create wealth. If you have not stayed current on the opportunities available in mobile home parks then I urge you to do so immediately. The economy runs in cycles and the "traditional investments" era is over. Even Warren Buffett told the world this when he said that "the incredible period of growth for the US economy is coming to an end" and then proceeded to sell off all the stock he could to the tune of $300 billion or so.
If you own stocks and CDs, the current situation is not going to improve, but perhaps only intensify. Eventually, everyone is going to realize this and a herd mentality takes shape. Get ahead of the pack and start looking at "alterative investing" now. You will find a mountain of free scientific data and information about mobile home park investing that has taken us around 30 years to produce.
We look forward to working with you.