Investment Idea--Bill Gates buys land to build City

[Elbata]

Bill Gates wants to build a smart city, 45 minute drive west of Phoenix.

Would it be a good idea to invest in adjacent property? How does one go about finding out where Phoenix city councilmen have possibly invested?

The payout could be far out into the future, but who knows, it could be a profitable in a few years.

Air conditioning has transformed Phoenix and desert towns. The trend has been for years of moving from colder climes to warmer areas.

Bill Gates buys big chunk of land in Arizona to build 'smart city' | 12NEWS.com

 

[calmloki]

If Bill's dirt is what I'm thinking it is very flat, empty and pretty darn ugly, though I think there is a nuclear reactor within spitting distance. I'll be on the 10 Wednesday doing 80 and will make a point to take my eyes off the road before we get to Buckeye.

 

[OldShooter]

... Would it be a good idea to invest in adjacent property? ...

Er ... sorry to say, probably 50,000 people have also come up with this same idea, including hundreds of real estate people in the area and all the owners of that adjacent property. The train has long since left the station.

It's the typical problem all of us have with our "investment ideas." Most of them are obvious, well-known, and market pricing has long since adjusted for them. Read about the "Efficient Market Hypothesis" to get some more information on the phenomenon. Even Richard Thaler agrees that investors should assume that markets are efficient even as he argues that sometimes they are not. Here's a good video of Gene Fama with Thaler: Are markets efficient? | Chicago Booth Review

 

[Another Reader]

West of Tonopah? The nuke plant is near Tonopah. Buckeye will be huge when it's built out, all the way around the White Tanks, north almost to Morristown, northwest maybe ten miles and south along the 85 corridor. Goodyear is extending south another 10 or 15 miles from Estrella Mountain Ranch. Going to look like the area from north of LA to San Diego and east to Riverside when these areas are built out.

Have no idea what Bill bought or what he paid, but the time to buy that dirt cheap is when the market tanks, which it does regularly there. Also have to wonder where he plans to get the water, since the supplies are largely tied up by the current proposed growth. There are two more western freeways planned, the extension of the 303 and the Hassayampa/CANAMEX corridor. My guess is Bill is looking at the proposed CANAMEX corridor.

 

[Ronstar]

This has been on the Phoenix tv news for several days. It’ll be interesting to see what becomes of this. There has been a new city planned for the White Tank Mountain area before, but nothing big has been built. That may change with Bill Gates involved.

 

[Another Reader]

OK, it looks like he paid $80,000,000 for 25,000 acres near Tonapah and the proposed I-11. That's $3,200 an acre. Hope some water rights are included at that price. Kinda makes Chuck Keating look like a visionary genius....

Bill Gates buys big chunk of land in Arizona to build 'smart city' | 12NEWS.com

 

[HFWR]

Perhaps a “smart city” will use water more wisely.

 

[Another Reader]

This has been on the Phoenix tv news for several days. It’ll be interesting to see what becomes of this. There has been a new city planned for the White Tank Mountain area before, but nothing big has been built. That may change with Bill Gates involved.

That's Buckeye north of 10. As Keating's Sun Valley parkway heads west from Surprise, Sun City Festival is now at the northwestern edge of Buckeye. At the other end near I-10 is a large subdivision that was partially built just before the market collapse called Tartesso. Over time, Buckeye will be built out to the north along and around the White Tank Mountains. New builders are already back in Tartesso.

Gates' land is west, near I-10 and 339th Avenue. The proposed I-11 supposedly runs through there.

 

[Ronstar]

^Thanks- I never heard of the I-11 until your post. I took DW west of town a few months ago to look it over, but she wants to stay on the east side. I need to take another ride out there and scope it out.

 

[cathy63]

Wow, I had no idea there was a Tonopah in AZ, only knew about the one in NV. But, speaking of futuristic cities in AZ, I wonder how many people bought land near Arcosanti and how that worked out for them?

 

[ERD50]

...

It's the typical problem all of us have with our "investment ideas." Most of them are obvious, well-known, and market pricing has long since adjusted for them. Read about the "Efficient Market Hypothesis" to get some more information on the phenomenon. Even Richard Thaler agrees that investors should assume that markets are efficient even as he argues that sometimes they are not. Here's a good video of Gene Fama with Thaler: Are markets efficient? | Chicago Booth Review

Thanks for the video, just finished it, hadn't seen them speak before.

One section cracked me up - more relevant to other threads, but after all this high level discussion of pricing models, it comes down to "buy index funds").

How does this debate affect regular investors?

Fama: When [Princeton’s] Daniel Kahneman got the Nobel Prize, he was asked how investors should behave. He basically said, “They should buy index funds.” The behavioralists come from a different perspective, because they think everybody is irrational, so the only way to make them rational is tell them what to do that’s possibly rational. Whereas I think the rational thing to do, because prices reflect available information pretty much, is to be a passive investor.

-ERD50

 

[OldShooter]

... One section cracked me up - more relevant to other threads, but after all this high level discussion of pricing models, it comes down to "buy index funds"). ...

Yes, but it makes sense. If you're buying individual stocks you have no idea how their price might vary from efficient to highly behavior-ly distorted. But buying the market all the behavioral ups and downs probably average to near zero, so you have diversified them away.

One picky little point I like to make: Passive investing is not the same as buying index funds. Buying, for example, an S&P index I would call half-passive (I am tempted though by "half-passed"). IOW you are passively invested and saving a lot of fees but the S&P is a sector bet on large cap US stocks. Fama's position, which obviously I buy, is that "We have to hold the market portfolio." IOW everything. Betting on sectors is closely akin to stock picking IMO. Sadly, most of the people buying S&P 500 funds don't realize this. So I try to be careful to say "passive investing" rather than "index investing" because the latter is not always truly passive.