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When Stock Market Bubbles End
3 mistakes investors make every time stock market bubbles pop
The first weeks of 2022 have been nauseating for investors. With inflation at a 40 year high, heavily indebted consumers, and a Federal Reserve with no more options left except to tighten monetary supply, investors should be preparing for the worst. Yet, most are not.
In fact, it appears the vast majority of investors are once again, ignoring all the warning signs and repeating exactly the same mistakes so many investors from the past have made before — every time a stock market bubble pops.
The World’s Worst Real Estate Investor
In 2007, Jared Kushner — Donald Trump’s son-in-law — was a tender, 27 years old. Jared’s father was serving a prison sentence for tax evasion, witness tampering, and illegal campaign contributions and Jared had been left in charge of his father’s company, Kushner Companies.
Allegedly, rather than simply settle for being a placeholder for his father, Jared decided to prove his worth by pushing for a really big, splashy real estate purchase. Jared infamously decided to purchase the Midtown tower, 666 Fifth Avenue for $1.8 billion — at the height of the real estate bubble. By 2011, Vornado Chairman and C.E.O. Steve Roth, who owned more than half the building following a refinancing, famously claimed that 666 Fifth Avenue, “would be worth a lot more if it was just dirt.”
The precarious situation of 666 Fifth Avenue has continued to plague Kushner and Company over the years. In fact, in what many have described as a final, crushing defeat, Kushner Companies ultimately surrendered the management of the building by issuing a 99-year lease to Brookfield Properties for $1.1 billion in 2018. This must have added insult to injury considering only one year earlier, Vanity Fair had made the searingly painful accusation that Jared might actually be the world’s worst real estate investor.
Is Kushner really the world’s worst real estate investor? I don’t think so. However, even if Jared isn’t the worst investor of all…
