Friday, February 26, 2016

More Great Investment Advice


                        Marijuana shop                                                    Coffee shop

About 18 months ago I wrote about traveling up in the States and I let on to the next big investment opportunity -- hot showers. I predicted back then that they would go viral and this trip we’ve seen convincing evidence in all 5 states we’ve visited. After spending sometime in Washington state, I think I’m on to the next big investment opportunity. Washington is the home of Starbucks. There are Starbucks stores all over -- it’s common to see them across the street from each other in busy city areas - block after block. The new sign on the street in Washington is the green cross, signifying a Pot Shop. In my somewhat unscientific sampling there are now more pot shops than Starbucks in Washington. Starbucks is really a real estate company placing their coffee shops where people are standing or driving. They need to be on the corners for maximum exposure. The pot shops have a more motivated customer base and can locate more mid-block. The Starbucks real estate is owned by Starbucks corporate, the pot shops are mostly leased from lots of different private owners.

To show the demand for Pot Shop real estate in Washington you just have to look at some of the easily understood ratios. First you have the Starbucks per corner ratio. In a particular area if you have a corner that has has two Starbucks on it then the S/C ratio is 2/4 or .5 Starbucks per available corner. The other important ratio is Pot Shops per block. If you have 2 Pot Shops on one side of the road and 3 on the other then you have a 5 Pot Shops per block ratio. If you take these ratios and apply them to each you (5/.5) you can clearly see that investing in Pot Shop Real Estate is a far better deal than buying a daily latte. The place to put your capital is into a PSREIT - Pot Shop Real Estate Investment Trust. Find one that is consolidating property on a cash basis and pays quarterly dividends. You heard it here first.

The next culturally insightful thing that stands out from our visit back to the states is that black barbeques are now in. When we left here you would enter a Home Depot and be greeted by rows of shiny stainless steel barbeques. Black BBQs were old school. Not now, they line them up in black. Not sure that this is a very useful observation.

We travelled through 5 states on our 2016 Tour de Family. The economy looks like it is hopping in 3 of those states: South Carolina, Washington and California. With California being the standout -- tons of new housing construction and the mega-stores’ parking lots jam packed on weekday mornings with expensive cars, restaurants with waiting  lines…... Florida was a little hard to read the economy as it lives on tourist dollars. Where we were in south Florida they were doing their normal dig up the roads during peak tourist season, so it was hard to tell if the traffic was due to all the tourists in town or the fact that all the east-west thoroughfares were down to one lane in each direction. What we saw of Georgia, which admittedly did not include Atlanta, just looked like the rural economy that in general was hurting. Signs of a divided economy.

That brings me to more insight into the presidential elections. The old saying going back to the first Bill Clinton presidential campaign is “It’s the economy, stupid” -- not sure if that will hold this time. I am actually surprised by how little people seem to care about the presidential party primaries. It seems like most people just can’t quite believe the system has really degenerated to this. Either way, I promised this wasn’t going to turn into a political blog.

                            Cyclone Winston- a record breaker for the Southern Hemisphere

We head back to New Zealand early next week. The plan is to do some touring of the south islands with friends coming down from the states, then go into panic mode to finish up a long list of boat projects. This should get us ready to head back to the islands in early May with Fiji being the main place we want to explore. Unfortunately cyclone Winston has done some serious damage to Fiji this week. Hopefully they will get some quick aid and be able to get the islands back functioning for the locals soon, and the yachties soon after that.