LAND EXPO 3
I'm going to lump two speakers at the Land Investment Expo in Des Moines Tuesday together. The fourth and final installment of these will come tomorrow.
Ron Diamond is founder and chairman of Diamond Wealth, which consults with some 150 family offices. A family office is a euphemistic way of saying "we're filthy rich and want to invest our money somewhere." It used to be only the Rockefellers and Carnegies and a couple other well-known names were in this camp, but with wealth disparity it is growing fast.
Roughly 68 percent of family offices today have only been created since 2020. To be a family office, you almost have to be worth at minimum $1 billion. Right now, all U.S. family offices combined share $10 trillion in equity. In the next 10 years, that number will jump to $124 trillion.
The most interesting thing about this money is that it is patient. It's completely different than venture capital and any other investments. These are wealthy families wanting to leverage their money for good things; they are already wealthy; they don't need to earn high returns. Families move in and out of this category. Only 5 percent of family offices will survive four generations. About 70 percent don't survive two. People are constantly moving in and out of this category, but it's growing as the rich get richer and poor get poorer.
Ron said until Tuesday he didn't think he'd ever met a farmer. He grew up in New York investment banking and investment funds. But suddenly farmland, which is one of the best hedges against inflation, is showing up on the radar of family offices as a place to invest. This will fundamentally change farm land ownership in the future because instead of available real estate going to other farmers or individual buyers, more and more will be snarfed up by family offices.
More farmers will lease and manage unowned land. Joel's note: Some 35 years ago my mentor Allan Nation, founder of Stockman Grass Farmer, told me the U.S. was moving to a European style of agriculture where the wealthy owned the land as an economic defensive mechanism and farmers managed it as a wealth-gaining offensive mechanism. So farmers who know how to make money on land will be a hot commodity.
Okay, next speaker: Ed Yardeni, president of Yardeni Research Inc. and nicknamed "The Wall Street Seer." "I don't think we'll have a recession."
"I predict the S&P at 10,000 by the end of the decade." Don't let your politics prejudice your investing. If you had been depressed in 1920 about WWI and the Spanish Flu, you would have missed the Roaring 20s. "I've been married three times and have five kids, so I guess I'm an optimist."
Baby Boomers are the richest retiring generation in history, holding $85 trillion in assets, much of it in their paid-off homes, which is why President Trump is trying to move real estate sales, to get this money re-circulating.
In the 1960s technology accounted for only 10 percent of national spending; today it's 60 percent and will drive the economy going forward. Productivity is making a big comeback. The shortage is in the trades, which won't be replaced by Artificial Intelligence. Trump's campaign against Fed chair Jerome Powell will backfire. Stupid move.
Smoot-Hawley tariffs created the great depression. The fact that we didn't go into depression with what we've been through in the last five years shows the resilience of our economy. These are good times. People have been screaming economic collapse because of the deficit since the 1980s and it hasn't happened.
The Japanese bond market is soaring: they're in trouble. Foreigners are still buying U.S. securities at normal rates; the dollar is stable and the U.S. is still considered a secure safe haven to hold wealth. A little gold in your portfolio is a good thing. Colleges are ridiculously expensive. There's no reason to lower interest rates as long as consumer spending is moving.
Let the good times roll. Are you happy?
