Market Perspective

Don’t Just Survive, Thrive – Week 4

Posted by on Dec 6, 2012 in Ned Massie, Perspective | 0 comments

Understand the Cycle If you have not already done so, you must read the book entitled “Manias, Panics and Crashes” by Dr. Kindleberger.  Unlike most economics books, this one is fairly easy to read.  The most recent version was updated in 1999, just prior to his death. Dr. Kindleberger’s book provides a magnificent insight into one of the most important forces impacting both the world economy and our USA economy.  A quick summary is that too rapid an expansion of capital (loans standards made too easy) spurs economic growth until a “bubble” is created by asset values increasing faster than realistic.  Ultimately, the bubble bursts and then the panic results when capital becomes less available (loan standards are tightened) and deleveraging occurs. The “Panic” ends when the Buyer of Last Resort starts acquiring problem assets.  That was the real reason The Federal Reserve was created… to be the Buyer of Last Resort in a financial panic.  Contrary to Rand Paul’s and some other politician’s ranting, The Fed was structured correctly. After the Panic phases is ended, the next phase is Deleveraging.  Deleveraging is simply a big word meaning that lenders such as banks reduce the amount of loans they hold as part of their assets in order to get their financial ratios realigned to the satisfaction of the bank examiners.  From their comments and actions over the last four years, it is painfully apparent that few, if any, of our elected officials understand economics. But here is the bottom line – it is impossible to have significant REAL economic growth while lenders are being forced to reduce the amount of loans they are holding.  But it is possible to create inflation.  Inflation will drive up the nominal value of everything.  While on the surface that may sound good, the unintended ripple effects are ugly and quite brutal. But if you purchase one really high quality tract of land at today’s very attractive price, that tract will provide many benefits to you over the next several years, including a rate of return in excess of the rate of inflation. Our goal is to help you thrive, not just survive your way through this historic economic time period.  Call us, we would love to help...

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Don’t Just Survive, Thrive – Week 3

Posted by on Dec 6, 2012 in Ned Massie, Perspective | 0 comments

Focus on the Facts In uncertain times we find it helpful to focus on facts, not emotions.  While I know that God is in control, I also know He gave us free will so I have to do my part.  Anytime I shift my focus away from all of the facts, it is very easy to feel overwhelmed by the feeling of uncertainty, otherwise known as fear. At Grant Massie Land Company when we are analyzing a tract of land for a client, we gather the facts and orient them so that they accurately describe the benefits of that particular tract in this specific market at this point in time.  We also examine our database looking for facts in the form of trends in that specific market segment. Logically the facts that we seek in today’s market are related to the forces currently impacting the economy as well as trying to forecast how those forces will impact the future.  The reason is simple… in order to thrive it is important that you make the right investment decisions. Portfolio management suggests that owning a mixture of asset types is the first critical decision.  At this point in time we are not qualified to assist you with stocks, bonds, etc.  However, we are qualified to assist with your land investment decisions that will help you navigate what we expect will be turbulent waters. Our goal is to help you thrive, not just survive your way through this historic time period.  Call us, we enjoy making folks look...

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Don’t Just Survive, Thrive – Week 2

Posted by on Dec 6, 2012 in Ned Massie, Perspective | 0 comments

Full Disclosure In my career, the majority of Americans have consistently wanted to focus on their work and providing for their families.  Our aspiration has been to work hard, raise our families, put a little aside for retirement, and help our neighbors.  Other than that, most of us would really like to be left alone. In our discussions over the next fourteen weeks, you need to understand my perspective.  My political beliefs are summed up by my past and current support for folks to elected office that believe in the following: A strong US dollar; Low taxes; A defense so strong no one will mess with us; Honest government. My experience is that Americans are generous to a fault.  Most of us want to give to those in need but we do not want anyone to take something from us to give to others.  Ronald Reagan captured that sentiment with his comment that I am paraphrasing “Taking from those that are working to give to those that are not working is called robbery”. In my 40th year of real estate, I have consistently worked 60 hour weeks because that is what it took to provide for my family in a manner I felt acceptable.  The 40 years of my career have been a mixture of good times and bad.  This Great Recession has been worse than the combination of the first three recessions in my career. The events from 2007 to today are a period of time that historians and economists will be studying for the next 100 years.  But our focus with this series of comments is not to quantify what has occurred. Rather, our goal is to help you not just survive but thrive as we work our way through this economically historic time period.  Call us, we enjoy making folks look...

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Don’t Just Survive, Thrive – Week 1

Posted by on Dec 6, 2012 in Ned Massie, Perspective | 0 comments

Introduction “Has the entire world gone insane?”  “Am I still in the USA?”  Some variation of those questions are what we are most often asked during a discussion with our clients regarding their decisions to buy or sell land.  The confusion and uncertainty is understandable given the mixed signals from our current elected leaders, such as the following: If investing is good for the American economy, why do we want to penalize it with increased taxes? If we are still an aspirational society, why are investors and business owners subject to derogatory comments from our President? If our elected officials care about good government, why have the Democrats in the US Senate not even had a budget hearing in three years? Other questions on folks mind is while the House has passed a budget for the last two years, it has been over three years since our federal government has had a budget.  Does that sound like America or some two-bit South American tin dictatorship? Should I be concerned that the Federal Reserve (The Fed) is said to be printing money irresponsibly?  Why are they doing what they are doing?  How will their actions impact me? If these questions are among ones you are asking, do not feel alone.  We are hearing variations of them repeatedly.  Over the next fourteen weeks we will explore these concerns and based on our understanding of the issues we will attempt to bring some clarity to these questions. Our goal is to help you thrive, not just survive your way through this economically historic time period.  Call us, we enjoy making folks look...

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Twelve Reasons to Buy Virginia Timberland as an Investment – Reason Number 12

Posted by on Oct 17, 2012 in Ned Massie, Perspective | 0 comments

Selecting Your Timberland Investment/Timberland Management By now you should realize some of the benefits that make timberland an excellent investment. The combination of increased demand for wood fiber and stable supply are your friends. The ability of a tract of land to actually grow trees is a critical consideration. Like any other crop, the soils located on a tract of land can predetermine the volume of timber that can grow and the speed with which it will grow. This is often referred to as the site index of a tract of land. When you are ready to make a timberland investment, we have the soil maps and other information available in our office so that we can help you find a tract of land that has a very good site index, which will improve your return on your investment. As a timberland investor, you benefit from that. Additionally, professionally managed timberland is of great benefit to the timberland investor. Un-managed timberland might be just a marginal investment. How does one manage timberland? Often we talk with folks whose view is that “all dirt is dirt and all trees are trees”. However, there is a remarkable difference. Not all soils are BEST suited for timberland. Likewise, some timber is pretty but worthless and other tracts of timber have tremendous value. But even with the very best of soils and a good planting of loblolly pine seedlings, professional management can greatly enhance the return on the investment. We hope that the information we have shared in this series has been beneficial to you in making the decision to invest in timberland. We believe doing so will make you look brilliant over the next 10 years. Call us, at Grant Massie Land Company, we love helping our clients look...

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Twelve Reasons to Buy Virginia Timberland as an Investment – Reason Number 11

Posted by on Oct 9, 2012 in Ned Massie, Perspective | 0 comments

Land Use Taxation Most counties in Virginia have adopted a land use tax.  This tax rate reduces the annual real estate tax on land that is used for agricultural or forestry purposes.  The reduction in annual tax can be quite significant. There is a provision whereby the county can recapture some of the deferred real estate tax.  Typically, it is limited to the tax reduction the previous five years plus some sort of interest on those deferred taxes. The trigger for recapture is if the use of the property is changed from agricultural or forestry into residential or some other development.  Often just the act of rezoning will trigger the recapture.  However, land use taxation can greatly benefit the bottom line of holding a piece of timber land. We hope that the information we are sharing will assist you in making a timberland investment.  We believe doing so will make you look brilliant over the next 10 years.  Call us, at Grant Massie Land Company we love to help our clients look...

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