Is Data-Driven Strategy Still Valuable to Retail Investors?
I suppose I should add "or has it ever been" to my title.
This is a question that's been burning on my mind for about two years now. In my research of my region, I have found that it is very rare to encounter a person who doesn't operate based on confirmation bias, arrogance, or nonsense they read on social media. I hear about "occupancy" which is a vanity metric used by huge hotel companies with a million units; this makes use feel like we are doing something really big and significant with our few units. I hear about cap rate, which is a dog chasing its tail. The most common thing you hear is "the market is crazy" and "the market's going up".
If you were to tell anyone in real estate that the market is not going up, you would find yourself unfollowed, blocked, unfriended, and likely sabotaged by small town gossip. These folks chase these meaningless metrics like they are gospel, until they don't say something good. That's when everyone is quiet. When the market drops by 15% in a year, none of these wannabe market experts lower their prices or their rent, which invalidates the other arguments, showing it's just confirmation bias.
I am wondering where the people are who want to know the truth. They want to find out if the market is actually slowing down rather than scratching lottery tickets until one is a winner and chalking it up to personal genius and merit.
I have done projects and sent them to local governments for free because they were over-investing in residential development, and their local businesses were getting stretched too thin. I was completely ignored, and a year later one of the best developed and modern restaurants in the area went completely out of business. Now people are seeing the shift in short term rentals I wrote about in my research in 2022 coming to fruition today.
I want to know where the deep thinkers are. The people who don't want to see raw noisy mls data (which is all written by realtors and much of it is copy and pasted from chatgpt now), but want to know what the next 5-10 years could look like. The people who want to find rock solid business/investments. I want to know where the people are who will pick up the phone and call their friend who researches markets and ask them a question rather than listening to what TikTok and the local chamber of commerce says and throw money at the casino. I want to know who the people are that subscribe to independent newsletters by people you don't hear about in local chamber social circles.
I don't mean to be harsh... well actually... I do. I do mean to be harsh. I'm serious about what I do. I've networked in many major markets, and I always find the same lazy bully in a sport coat with a dashboard and a bad attitude who can't build a model of his own business, but wants to try and cut what I do down. I am 100% the guy who is going to hold up a mirror and show you the story you are telling me. I'm aggressive. I'm competitive. And I have the tech skills to find out anything I want to know.
You would think people who are putting the kind of money at stake they say they are would want to make sure they aren't throwing it down a hole. It always makes me wonder how much skin they really have in the game.