Sam Zell is heralded as one of the most successful real estate professionals of his time. However, he doesn’t proclaim to have any complicated strategy when it comes to his deals. In fact, if you go to Equity Group Investments website you’ll find a page called ‘Zell’s Fundamentals’, a list of 13 brief statements which serve as the basis of his investment decisions.
Rule #1 – Operate on the condition of no surprises
Rule #2 -Everyday that you’re not selling an asset in your portfolio, you’re choosing to buy it
Rule #3 – Ensure management’s interests are aligned with shareholders
Rule #4 – Look for good companies with bad balance sheets
Rule #5 – Nothing should stand between a company and its fiduciary responsibility to shareholders
Rule #6 – Look for opportunities in markets with pent-up demand
Rule #7 – The definition of a partner is someone who shares your level of risk
Rule #8 – Liquidity = value
Rule #9 – Sentimentality about an investments leads to lack of discipline
Rule #10 – Take meaningful positions so you can influence your own destiny
Rule #11 – When everyone is going right, look left
Rule #12 – Understand the downside
Rule #13 It all comes down to Econ 101 – supply and demand
What’s on your list of fundamentals?