My world: June 2021…

This is part of a series of articles where our contributors describe how they think things will look a year from now.

I have a teaching aid I use with new graduate students. I show them a graph that shows performance of commercial real estate over time. Around it are lines representing the performance of individual investors. One stands above the national line and moves away from it sharply. I ask the students to tell me how this investor has outperformed. They provide a range of possibilities: superior market knowledge, being in the right sector or market, great stock selection, clever use of finance, access to capital, better forecasting tools. The investor as hero!

Next, I press F9. The graph recalculates, lines rearrange. In this alternative history, our previously superior investor falls below the market. Maybe a new hero appears. Each of the lines is simply national performance plus or minus a random amount. In the one history we know, someone outperforms. They become the guru, the market expert, they gain new clients, access to funds, people listen to their wisdom. But was it all chance, did they just get lucky? In real estates, some gurus don’t even have to get lucky: they are revered and find platforms despite their track record of running their funds repeatedly into financial distress.