Even though most of us will never become billionaires, it’s sure fun trying.
But if we want to have a chance of making it BIG, it’s probably smart to watch and listen to those who’ve actually done it.
After all, as Tony Robbins says, “Success leaves clues.”
To which the Godfather of Real Estate, Bob Helms, adds … “You don’t need to give natural childbirth to a good idea … you can adopt!”
So when multi-billionaire real estate investor Sam Zell has something to say, we pay attention and take notes.
In a recent appearance on Bloomberg News, Zell reveals what he’s doing right now and why. It’s a short clip, and you can watch it here.
There are some great pearls of wisdom to glean … and if you’ve been followingThe Real Estate Guys™ for a while, some of them will sound familiar.
But that’s not because we’re super smart. It’s more because we’re well- informed from spending quality time with lots of really smart people.
Sam Zell is buying gold … for the first time in his life.
We think that’s REALLY interesting.
Of course, we’ve been following gold for quite some time … for a lot of reasons.
So while it’s interesting that Zell is buying gold for the very first time in his long and uber-successful investing career … what’s even MORE intriguing is WHY.
In the interview, Zell offers up two reasons. One is obvious. The other is more subtle … and leads to some even more subtle lessons.
All this from a guy who wrote a book titled Am I Being Too Subtle?
First, Zell says he’s buying gold because of the supply and demand dynamic. He overtly states he sees gold supply constrained going forward.
It’s obvious from Zell’s comments that it’s important to understand supply and demand when investing in anything, because …
When supply is low relative to demand, there’s opportunity.
Yes, we realize that’s Investing 101. But it’s also a GREAT reminder that even at the billionaire level, successful investing is based on basic, timeless concepts.
However, there’s MORE to be gleaned from Zell’s comments about gold …
While he openly explains that he sees the supply being constrained, he onlyimplies his confidence in persistent demand for gold.
After all, if supply drops … but demand drops too … there’s no imbalance, and therefore, no opportunity. Zell’s too smart to miss that.
So Zell must see gold demand holding … or increasing.
That means the supply and demand dynamic in gold is SO compelling that billionaire Sam Zell is buying gold for the FIRST time in his EPIC career.
That’s telling in and of itself. But wait! There’s more …
In addition to constrained supply combined with persistent and growing demand going forward … Zell must think the opportunity in gold is quite good right now relative to other investment options.
Which begs the question …
What’s different in TODAY’s world to push the prospects for gold so high up Sam Zell’s priority ladder?
After all, he’s been around a LONG time … through stock market crashes, recessions, financial crises. What’s different NOW that makes gold alluring?
That’s a topic too big for this commentary … and our limited brains …
… but it will be a hot topic of discussion with gold experts Brien Lundin, Dana Samuelson and Peter Schiff aboard the upcoming Investor Summit at Sea™.
We’re guessing part of the answer is wrapped up in Sam Zell’s second subtle comment …
Sam Zell is buying gold as a “hedge.”
Hmmmm … that’s interesting. A hedge against what?
Investopedia defines a hedge this way …
“A hedge is an investment to reduce the risk of adverse price movements in an asset. Normally, a hedge consists of taking an offsetting position in a related security.”
Well, THAT’S interesting.
So Zell is using gold to “reduce the risk of adverse price movement in an asset.”
And he apparently considers gold to be highly useful as “an offsetting position in a related security.”
Which begs yet another question …
What asset / related security is Zell worried about … for the first time in his long and illustrious career?
Our guess is it’s the U.S. dollar. In fact, we’d bet a beer on it.
And there’s one more clue we think bolsters the argument Zell is hedging the dollar …
Zell is bullish on oil.
Maybe Zell’s been listening to The Real Estate Guys™ radio show???
Um, probably not.
More likely, we’re learning a lot from all the smart folks we hang out with and listen to … and we’re starting to think like billionaires. We hope so.
So why oil?
Also coincidentally … just a week before the Sam Zell interview was published, we published our weekly newsletter and talked about … oil.
So we won’t take time here to explain why we think oil could be a big story going forward. You can read our thoughts here.
But this Zell interview affirms what we and many of our big-brained pals have been monitoring carefully for several years …
The dollar is under attack … from both internal and external forces.
So anyone who earns, invests, borrows, lends, or denominates net worth in dollars … most likely YOU … should probably take steps to become more aware and better prepared.
After all, if multi-billionaire real estate investor Sam Zell is hedging against the dollar … it’s smart to pay attention and consider doing the same.
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