two real estate investors simultaneously purchased identical properties

Have you ever heard of a case in which two real estate investors simultaneously purchased identical properties on the same street? With a good tenant, one can sell their property for a good profit later; The other one sells it later at a loss with much lower rent and a bad tenant.

They might be consulting the same investment advisor, working with the same selling agent, financing through the same bank, and using the same property management agent.

You might also have seen investors in shares who bought the same shares at the same time. One of them ends up selling them for a loss because of personal circumstances, while the other sells them for a profit later.

I’ve even seen the same builder construct five identical houses for five investors side by side. One was constructed six months later than the other four, and he was forced to sell it at the wrong time due to personal cash flow constraints, whereas the others are faring much better financially.
What is the only difference between the preceding scenarios? The investors as individuals (i.e., the internal factors).

I have personally reviewed the financial positions of a few thousand investors over the course of my career. When someone asks me what kind of investment they should get into at any given time, they expect me to compare shares, properties, and other asset classes to help them decide how to spend their money.

In response, I always request that they review their track record first. I’d ask them to make a list of every investment they’ve ever made: shares, cash, options, futures, properties, development, renovation, and other types of property and request that they tell me which one brought in the most money for them and which one did not. Then, I tell them to keep the winners and eliminate the losers. To put it another way, I tell them to increase their investments in those that have proven to be profitable in the past and decrease their investments in those that have not proven to be profitable in the past (assuming that their money will earn a return of 5% annually while it is sitting in the bank, they must at least beat that when comparing the two).

If you take the time to do that for yourself, you will quickly find your favorite investment, allowing you to focus on getting the best return rather than giving any of your resources to losers.

You may inquire as to why I chose these investments rather than considering portfolio management or diversification theories as the majority of others do. Simply put, I believe that many things that are beyond our scientific comprehension are governed by nature’s law; Additionally, breaking nature’s laws is not smart.

Take, for instance, the fact that sardines swim together in the ocean. The sharks do the same thing. Similar trees grow together in a natural forest. This is the idea that things that are alike attract each other because they share an affinity.

You can see the people you know around you. Most likely, the people you spend more time with are in some ways similar to you.

It would appear that a law of affinity is at play, which states that similar things produce similar things; whether they are rocks, animals, humans, or trees. What would make an investor and their investments different, in your opinion?

Therefore, in my opinion, the issue is not always which investment performs best. Instead, it comes down to which investment is best for you.