222. Markets Down, Profits Up? - w/ Data from our Storage Facilities
Self Storage Income
AJ Osborne
4.9 • 591 Ratings
🗓️ 5 December 2023
⏱️ 29 minutes
🧾️ Download transcript
Summary
Since we have numbers and charts, this episode is better experienced over on our YouTube channel: https://youtu.be/-FYu86WdZSY
2023 SUCKED. It was a hard year for storage. We talked about how the market has changed in the last episode, but today, we want to see how those changes have affected our assets. Yes, we're sharing with you OUR NUMBERS and talking about insights.
I can't control the market. You can't either. But what can we control to measure the true value of your assets? And just as importantly, how long will it take you to make changes?
Measuring performance according to a previously established plan can work well if you know how that performance is being affected. If performance is down because of something I did, then I obviously did something wrong. If it's down, but the market is what brought it down, then I need to be proactively adjusting the original plan.
That's what we did this year. We saw the numbers come in, and now we have to change our business plan just as the market has changed.
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Transcript
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| 0:00.0 | Welcome everybody to self-storage income. And today we are going to open the books a little to show you guys our numbers on our assets and what's been happening. |
| 0:15.0 | We compiled some interesting data and I'm actually going to walk you through all of our assets |
| 0:22.7 | that we have investors in. We are going to look at a few things. So as everybody knows, |
| 0:27.5 | 2023 sucked. And it was a hard, hard year in storage. It was a hard year for us. The market change |
| 0:36.4 | was astronomical and it was rapid and it deteriorated |
| 0:40.6 | quickly last year. And it really put us to the test as well as it did everybody's. And when we |
| 0:47.9 | look at our deals, how we buy and what we're doing, a lot of times you guys have heard me talk about my margin of stupidity. |
| 0:56.0 | That's a real thing, and it's for markets like this. |
| 1:00.0 | I need to be able to make mistakes. |
| 1:02.0 | The margin of stupidity is placed on a structural basis that allows us to do stupid things without getting caught by value traps. And for those of you that are regular |
| 1:15.1 | listeners, you know what a value trap is. We have intrinsic and extrinsic value. Extrinsic value is |
| 1:21.9 | the price. And a value trap is when the price kicks in to dictate the outcome, meaning refinance, selling, or anything else |
| 1:30.6 | where they take the price of the asset. Why? Because the price of the asset doesn't necessarily |
| 1:35.7 | correlate with the performance of the asset. Now, I know you're sitting here going, what, that doesn't |
| 1:40.8 | make any sense. But when you look at market conditions, think of home |
| 1:44.6 | prices or anything else, I may be making $100,000 a year off a facility and the debt markets crashed. |
| 1:51.0 | So all of a sudden, that facility that was worth a million dollars is now only worth 1.5, let's say. |
| 1:57.2 | That can happen, even though it's still doing the exact same thing nothing changed at all |
| 2:01.2 | because the extrinsic value the price from sellers right buyers excuse me in the marketplace |
| 2:08.1 | has changed supply demand now we want to avoid those things and the margin of stupidity is |
| 2:15.1 | supposed to help us avoid those kind of things. So we always |
| 2:19.0 | structure on the downside. I'm really looking at short-term traps, things that can happen to hurt us. |
... |
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