Many years ago, long before I was the editor of the Forbes Real Estate Investor, I ran across an article in Forbes Magazine written by one of my favorite authors, Paul Johnson. The title of the article was The Rhino Principle, and I keep a copy of it near my desk as a reminder of the power behind that beast. Here’s some of the inspirational text from this fellow Forbes writer,
Johnson concluded the Forbes article by offering the following advice: “That is what the rhinoceros does. It may not be a model animal in most ways. But it does one thing very well. And that one thing we can learn: Charge!”
Even before that worthwhile read, I’ve long-since been fascinated with the rhino because of its durable qualities. And, in terms of investing, there are obvious similarities with rhinos, real estate, and REITs.
Remember, both rhinos and REITs have survived as a result of their “Darwin-like” survival of the fittest attributes.
In order to see just how tough REITs really are, it’s important to consider typical real estate life cycles compared with those of the stock market. Generally, stock prices follow a business life cycle of around five years; however, as the researcher Homer Hoyt believed, the average real estate market cycle is around 18.
While most stock prices follow the typical five-year business cycle, which traces changes in general economic activity – as measured by GDP, income, employment, industrial production, sales, and the like – real estate business cycles are over three times longer due to the difficulty of construction.
This gives them more room to run. And to take charge of their natural space.
In addition, many publicly traded REITs have managed to survive and thrive for decades using risk-aligned practices distinguished by sound balance sheet fundamentals and strong dividend performance.
That’s one of the reasons we use defensively-tough standards for our scoring model known as Rhino Ratings. While many public U.S. stocks are paying out modest dividend yields, high-quality REITs, characterized as rhino-like alternatives, seem to be resonating with income-oriented investors.
So now you can see why Remi the Rhino is our company mascot. He fits right in.
Get Involved. Make a Difference.
To better preserve endangered animals like the rhino, we’ve set up a donation campaign in Remi’s honor.
According to the African Wildlife Foundation (AWF):
Nearly 100 elephants are slaughtered every day to feed to the blood ivory trade. Rhino horn is more expensive than gold, and greedy poachers are eager to make a profit from killing these endangered animals. All of Africa’s great apes are endangered.
AWF bills itself as:
… working around the clock to ensure these threatened species have a place in our future. They’re equipping anti-poaching patrols, working with governments and legislative officials to enforce wildlife trafficking penalties, strengthening law enforcement with ivory- and rhino-horn detecting canine units and reducing demand through celebrity-driven public awareness campaigns.
Therefore, any more you can give will go toward helping to launch more of these critical projects across the African continent. Even a small amount helps.
CLICK HERE TO DONATE TODAY. And thank you for your contribution to this worthwhile project.