The Meb Faber Show - Better Investing Phil Bak, Armada ETFs - Masterclass in (Liquid) Real Estate Investing | #496
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Aug 23, 2023 Phil Bak, CEO of Armada ETFs, gives a masterclass on real estate investing. He covers the residential real estate space and introduces his solution to the problem investors have faced this year with private REIT strategies. Phil discusses his use of AI and machine learning in the REIT space and shares his most memorable investment. He also talks about changing market dynamics due to shifting Fed actions and lessons from investing in baseball cards.
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Phil's Journey to REITs
- Phil Bak's journey into REITs was driven by his entrepreneurial spirit and love for markets.
- He found the market's narratives often overshadow the importance of asset management.
REITs: More Than Just Real Estate
- REITs are not simply real estate; they represent a diverse range of assets with varying correlations.
- Market-cap-weighted REIT indices often lead to blind investment in poorly correlated assets.
The Problem with Market-Cap Weighting
- Market-cap weighting in REITs ignores valuations, leading to overexposure to expensive assets.
- Narratives drive flows, and flows drive performance, creating a self-fulfilling prophecy.