Good investments and bad investments

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I am surprised by how often I hear someone declare that a certain type of investment is "good" or another is "bad": "Investing in Manhattan real estate is always good," "Investing where a city is growing is a good idea," "Invest in companies with good cash flow," or "Don't invest in a property with a trailer on it: the value of the trailer declines every year."

What all of these dictums ignore is price! Buying a lot with a trailer on it can be a great investment, if the low price more than accounts for the future decline in the trailer's value. Investing in a growing area of a city can be a terrible investment, if the area has become trendy and prices have risen enough to account for all of that future growth and more.

Any type of investment can be good at one price, and bad at another.

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