I started a new French class his week. Most of my classmates are regulars, but since we have a new teacher, we were all asked to introduce ourselves. And to spice things up, we were asked to talk about whether we're glass half full or half empty kind of people.
When it came to my turn, and before I could answer, one of my classmates jumped in and said "Brandon est un optimiste." And you know what, this made me happy. I took it as a great compliment.
Because to be a real estate developer, I think you need to be an optimist. I have argued this before on the blog.
This is not to say that you don't need to carefully manage risk, and think about all of the things that can and probably will go wrong. It is say that the inertia working against you is so great, that you really need to believe in the future you are trying to create. If not, you're liable to not make it.
So this morning, when my partner Lucas showed me the below quote from Nobel Prize winner Daniel Kahneman, I immediately thought, "yeah, this is going on the blog."
"If you are allowed one wish for your child, seriously consider wishing him or her optimism. Optimists are normally cheerful and happy, and therefore popular; they are resilient in adapting to failures and hardships, their chances of clinical depression are reduced, their immune system is stronger, they take better care of their health, they feel healthier than others and are in fact likely to live longer.
Optimistic individuals play a disproportionate role in shaping our lives. Their decisions make a difference; they are the inventors, the entrepreneurs, the political and military leaders – not average people. They got to where they are by seeking challenges and taking risks. They are talented and they have been lucky, almost certainly luckier than they acknowledge… the people who have the greatest influence on the lives of others are likely to be optimistic and overconfident, and to take more risks than they realize."
This excerpt is from Kahneman's book, Thinking, Fast and Slow. I haven't read it. But now I want to.
Yale economist Robert Shiller - who is famous for his work on speculative bubbles and housing markets - was just awarded a Nobel Prize in Economics.
By way of his Case-Shiller Home Price Indices, he has argued that from 1890 to 2012 home price appreciation in the US (in real terms) has been basically zero. It has been flat:
As a result, he’s been very critical of the notion that homes should even be thought of as an investment. In this interview, he says the following:
“So, why was it considered an investment? That was a fad. That was an idea that took hold in the early 2000’s. And I don’t expect it to come back. Not with the same force. So people might just decide, "Yeah, I’ll diversify my portfolio. I’ll live in a rental.” That is a very sensible thing for many people to do.“