So What is a Decent Investment These Days?

[Steiny]

My 401K, stocks and mutual funds are taking an azz whipping.
Can't get more than about 4% out of a CD.

I'm pretty real estate heavy, but giving serious consideration to getting into some more. Might have an opportunity to build a small commercial facility and do a lease to buy with 5-10 year pay off. Looking pretty serious at that.

Hate to see money laying around and not getting some kind of decent return on it.

Anybody doing anything interesting?

 

[brymoore]

Ask that question in a year when the high inflation starts - that's what I'm worried about.

 

[cjcj]

GOLD coins..bullion etc.

 

[T Bone]

i've upped my 401k to the max i can comfortably do. In my peanut sized mind, it's a prime time to be buying in the more aggressive growth (or recently, loss) funds.

 

[Dinkshooter]

Sending me on as many hunting trips as you can afford.

The feeling of helping someone else will be the return on your investment.

I am with Byrmoore on the inflation deal. SHould be scary.

 

[JohnSWA]

Tbone, I hope youre right for your sake. I upped mine to 20%+ the companies 7.8, but brought it back down to 8% when I was losing my ass working overtime to take care of debt.

Best of luck to you and eveyone else investing in this sad time of events.

 

[BigHornRam]

Raw land is usually a good bet in times of inflation.....but I'm not sold on it this time around. I think we are headed for uncharted waters. Proceed with caution IMO. Commercial R E would be about the last thing I would invest in right now. There will be a glut of commercial properties vacant in the years to come.

 

[Steiny]

I've always maxed the 401K, so no point doing any more of that.

This commecial deal I am referring to is kind of "quasi-governmental" and would be built specifically to their needs which are quite unique. Not much chance in them going broke due to connections with the gov, and I doubt they would ever move if you set them up nice, as there would not be anything "or equal" around to move into without a major remodel.

This would be a mostly cash deal, working with my own money. A long way from putting a deal together, and lots of questions to be answered, but looks promising right now.

 

[JoseCuervo]

Raw land is usually a good bet in times of inflation..... .

Raw land is usually a horrible investment. Generates no income and has annual expenses (taxes and/or insurance).

I would think anything COULD be a good investment if you can get it from a seller who has no other options.

 

[schmalts]

Raw land is usually a horrible investment. Generates no income and has annual expenses (taxes and/or insurance).

I would think anything COULD be a good investment if you can get it from a seller who has no other options.

wow... genius never heard of things like CRP , FCL or MFL.
If a guy would have bought all the farm land you could have in Iowa a decade ago you would have made some nice coin, tax free for the most part, and got paid not to farm it enough to have covered the payments. Not to mention the hunting.
I know a few guys sitting on half a million in land that paid jack for it and worked the govt programs well.
Not to mention what leasing tillable is going for these days with the price of corn. Here in WI I have some buddies getting over 200 and acre in lease

 

[JoseCuervo]

Yep, I have never heard of FCL or MFL. I have heard of NFL and FLN.

I don't really think of "farm land" as being the same as Big Whore's "raw land". If somebody is leasing the land and farming it, is it really "raw"?

And, with the price of corn TANKING, farmers are in trouble. Can't get money, the Ethanol bubble burst.....

But, sorry for confusing you with facts, not something you really seem to be able to grasp.

Here, I made you a picture to hope you could understand. I even left you lots of white areas around the picture so you can use your crayons and color pretty flowers in like you love to do.

 

[pa mt man]

Don't know if I'd invest in "raw land" today,but a friend of mine bought different parcels of land that added up to well over a thousand acres about five years ago for a little over a million. I think it would qualify for raw land. One parcel borders our property and was one of our favorite hunting spots for a deer drive. It was stripped mined years ago and planted with pine trees,old time reclaimed strip mine. A lot of it was old strip mines with highwalls and no topsoil. Anyway, he told my other friend who bought the gas leases off him that when he got it logged, it payed for the property. Not bad for raw land.

 

[BigHornRam]

For the mentally handicapped........
Raw land = not developed

Sounds like you do your homework Steiny. Just make sure the Golden Goose doesn't run out of ink.

 

[smalls]

Jose,

$3.75 to $4.00 corn pays the bills all day long. RSI is solid, not particularily overbought or oversold.

I'll be upfront that I am no fan of ethanol, but to say it's bubble has burst is simply untrue. Consumers may be wary of ethanol, but there is alot of support for the ethanol industry simply due to the Renewable Fuel Standard. Ethanol will never replace a significant portion of petroleum based gasoline, but it will be necessary to replace MTBEs as they are phased out of more and more states.

Also, ethanol refiners lost a portion of their subsidy (7-cents I believe), but with the credit still at 40-cents plus and corn having retreated to more manageable values it should be plenty profitable even in the short-term. I don't particularily see subsidies of any kind being further reduced considering the current congressional and presidential makeup.

Sorry for the sidetrack Steiny. I'd be embarassed to give you money/financial advice as I am pretty sure that it would be analogous to me telling Michael Phelps how to improve his breast stroke.

 

[guppie9]

My whole idea of burying my money in jars in the backyard is starting to look better and better every day.

 

[JoseCuervo]

Jose,



I'll be upfront that I am no fan of ethanol, but to say it's bubble has burst is simply untrue. Consumers may be wary of ethanol, but there is alot of support for the ethanol industry simply due to the Renewable Fuel Standard. .

I guess we can all have different ideas of what a bust of the bubble in Ethanol looks like. I would consider the producers going broke to be a bust, but you might think that is a sign of a healthy industry...

VeraSun Energy files for Chapter 11; largest US ethanol bankruptcy

In South Dakota, VeraSun Energy began a new phase in a dismal year for the company when it and 24 subsidiaries filed for Chapter 11 bankruptcy in federal courts.

Ethanol Start-Ups and the Bankruptcy Bogeyman
Two new ethanol plants received a lump of coal in their Christmas stockings—a Chapter 11 bankruptcy filing. One plant isn’t even completed. Now both face the unenviable task of clawing their way out of a hole to become successful enterprises. And both leave corn farmers and other investors wondering how such lofty aspirations went awry.
By Sarah Smith

In mid-December 2007, Central Illinois Energy, a cooperative formed by 260 farmers and local investors who spent $130 million to build an ethanol plant near Canton, Ill., threw in the towel when they learned they’d lost their money—about one month shy of distilling their corn. Plant construction had mushroomed from its $40 million initial proposal in 2001, in part due to project additions, engineering delays and financing hurdles.

The unfinished plant faces $37 million in construction liens, a debt load of $87 million and a loss of all but two of its directors. It surrendered its grain license when the financial problems became insurmountable. The Central Illinois Agriculture Coalition, which spearheaded the fund drive, owns 71 percent of the defunct plant.

One week earlier, an innovative plant near Mead, Neb., filed Chapter 11 bankruptcy papers after mechanical failures undermined early output and profit projections and sent company finances spiraling downward. E3 BioFuels LLC, an $80 million plant called Genesis, had only been operational for five months. It employed a prototype technology. The plant was powered by biogas generated from cattle manure, compliments of a 28,000-head feedlot nearby. Distillers wet grains, a byproduct of the ethanol plant, fed the cattle in a “closed-loop” system

Greater Ohio Ethanol files Chapter 11 bankruptcy
In Ohio, the Greater Ohio Ethanol Plant has filed for Chapter 11 bankruptcy protection for its 54 Mgy corn ethanol plant in Lima. The company said that they hope to continue running while reorganizing. The crucial factor in the failure? A miscalculation of water use, with the plant using double its original projection of one millions gallons per day.

The list goes on, and on........

 

[smalls]

I know all about them Jose...especially Verasun who screwed alot of growers this year.

But a little digging will show that the biggest cause for failure had less to do with a flawed business models and more to do with the lack of short term credit. You'll notice that many of the ethanol plants that failed were poorly funded grower coops. So while cash-strapped entities like "Greater Ohio" and "Central Illinois Energy" went belly up, the majority of the refining capacity which belongs to the Cargill's and ADM's of the world are doing fine. Especially now that the fundamentals are swinging their way again.

I could search any industry and find businesses that failed due to short-term credit markets drying up last year.

 

[noharleyyet]

Jose, please forward sufficient tuition funds to smalls for educational services rendered.

 

[JoseCuervo]

Smalls,

So you still think the bubble on Ethanol is continuing? Just so I understand your position.

ADM and Cargil are doing "just fine"? Again, I think we have a different understanding of "just fine"....

From an old study from the Cato Institute.....

Thanks to federal protection of the domestic sugar industry, ethanol subsidies, subsidized grain exports, and various other programs, ADM has cost the American economy billions of dollars since 1980 and has indirectly cost Americans tens of billions of dollars in higher prices and higher taxes over that same period. At least 43 percent of ADM's annual profits are from products heavily subsidized or protected by the American government. Moreover, every $1 of profits earned by ADM's corn sweetener operation costs consumers $10, and every $1 of profits earned by its ethanol operation costs taxpayers $30

I guess if you consider someone on Welfare as doing "just fine", I can understand your reasoning.


From the ADM earnings report they issued LAST week....

Ethanol margins remained break-even or negative across the industry, and losses on the alternative fuel dragged ADM's earnings in corn processing to their lowest level since the company began reporting the unit separately in fiscal 2002.

ADM's ethanol business sustained losses as ethanol processing margins "collapsed during the quarter," Mr. Mills said. The company's bioproducts division, which includes ethanol, turned in a loss of $111 million in the latest quarter, compared with a year-earlier profit of $125 million.

The entire U.S. ethanol industry is struggling as demand for the corn-based motor fuel falls along with gasoline. Cash-strapped consumers have cut back on driving as the economic crisis ripples through the economy. As oil prices have fallen, so have ethanol prices, making the fuel less profitable to produce.

I need to get some of them Rose coloured glasses you wear... If you consider a "collapse" to be a sign of a good industry......

And so you don't think that Cargill is doing any better.....

The margin crunch has taken a toll industrywide. Grain giant Cargill Inc. suspended plans for an ethanol plant near Topeka, Kan

NoHarley,

It is a good thing Smalls ain't sending me a check, I have a feeling his check would bounce..... and he would think it is because of a new invention using rubber in checks...

 

[BigHornRam]

"Moreover, every $1 of profits earned by ADM's corn sweetener operation costs consumers $10, and every $1 of profits earned by its ethanol operation costs taxpayers $30"

Sounds like Obama's porkulus bill. Say, wasn't Obama a big supporter of ethanol when he was in the Senate?

What do think of Blue Dog Walt Minnick's attempt to improve the porkulus bill, Jose?