An Investing Quandry

The Depression is making investing decisions more difficult for everyone it seems. A friend of substantial means just yesterday said he wants to keep more money "in the mattress." We don't doubt the literalness of his words.

Even we, who have made a career of making decisions, find assessing risks very difficult. In particular, an interesting situation has come up that has us stumped. We have become aware of opportunities to purchase real estate at what seem to be very attractive valuations. But yet we are somewhat paralysed.

We ask ourselves: Is this a value trap? Are the neighbourhoods - though adequate now - doomed to decay? Are cities which are not very prosperous (or with large non-prospering segments of their population) at risk of social disorder?

In happier times, we would have assumed that having done our homework to select the best investment candidates, we could expect fruitful results. We have always done well 'buying the dips'. Under the present circumstances, it seems wiser to err on the side of caution. It grates against our indwelling optimism to resist any bargain, but with 'the world turned upside-down' that conflict is a state we will simply have to adjust to.