Looking past short-term volatility is easier said than done. Community-driven stock market volatility has been hard to ignore this week, with several notable stocks more than doubling in value overnight and then promptly plummeting. Video game retailer Gamestop, movie theater company AMC, among others are the stars of this short-squeeze mania. The volatility has been so unusual that brokerages have now placed pauses on trading.
Nobody knows what the ultimate impacts of this community-driven stock volatility will be, and whether it will quickly abate and supply/demand simply rebound to prior levels, or whether there may be longer term ripple effects on blue chip stocks and eventually the global economy.
From our standpoint, we’re comfortable operating in any environment. Why?
- We have always invested with downside outcomes at the forefront of our underwriting.
- We generate a majority of our revenue from established companies with strong financial wherewithal.
- We’re no fans of excessive portfolio leverage.
So it’s time to talk the talk when it comes to long-term investing, and that (quite literally) means walking the walk. Go for a stroll in the neighborhood, read non-market related materials. Our human brains are all too susceptible to being overwhelmed by negative stimuli.
The 2021 short squeeze may reach a peak today, tomorrow, or a month from now. That’s not our focus. Our focus is to:
- Maintain occupancy in any environment.
- Exhibit financial flexibility to capitalize on weak markets.
- Go generate a reasonable return over the long-term.
As always, feel free to reach out to us any time with your own thoughts.
Eliot Bencuya is the co-founder and CEO of Streitwise. Eliot has extensive experience identifying, underwriting, and executing value-add real estate investments.
Prior to forming Streitwise, he was a Vice President of Acquisitions for Canyon Capital Realty Advisors and the Canyon-Johnson Urban Funds, where he was responsible for originating, underwriting, structuring and executing transactions in the Pacific Northwest, Northern California and Midwest regions. Mr. Bencuya also held positions at Sovereign Investment Company (a subsidiary of the Marcus and Millichap Company) and the investment banking division of Merrill Lynch & Co. He holds a Bachelor of Arts degree in Economics and International Studies from Yale University, and a Masters of Business Administration degree from the Haas School of Business at the University of California, Berkeley. Mr. Bencuya is a member of ULI.