Buy The Product Not The Shares
September 6, 2013 Leave a comment
Invest in their apartments, and you will get rich. But invest in their shares and you will be poorer. Unlike in other sectors, values of shares of listed real estate companies do not reflect the growing value of their products. Sample this: Investments made in shares of real estate companies like Delhi-based Unitech and DLF, Mumbai-based Indiabulls Real Estate or Bangalore-based Purvankara in 2008 would have crashed to half or to a fifth of their value by now whereas in the same period, returns from investments made in homes built by the same companies would have risen anywhere between 50% and 150% or more. If one had bought an apartment in any Gurgaon-based apartment building of DLF — India’s biggest builder — in 2008, the investment would have, by now, appreciated 60-175%. Had the same money been used to purchase DLF’s shares the same year, that investment would have eroded to just 20%. Investors of Unitech, Indiabulls and other real estate firms would have a similar story to tell. Read more of this post
Real estate companies have been offering schemes called 20:80 and 25:75 where the builder agrees to pay interest on the borrower’s loan for a specific period. The buyer pays 20% upfront and the bank disburses the entire loan to the builder through the individual. The builder finances the construction of the project with the money, and agrees to pay interest on behalf of the borrower to the bank.
The Premier Blue is the largest round fancy vivid blue diamond to have been graded by the Gemological Institute of America, said Sotheby’s. It was sourced from the Premier (formerly known as Cullinan) mine near Pretoria, South Africa, the world’s main provider of blue diamonds.It is a brilliant-cut internally flawless stone, weighing 7.59 carats.
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