I have been busy looking at tech stocks recently – this has been fun as it has forced me to take a more macroeconomic view on the world vs. extremely microeconomic view in my former role as a biotech investor.
As I strive for FIRE (and biotech investing is one of the strategies for me to get to FIRE), I have been investing in a more liberal manner – one of which is tech where there is clear macro / regulatory secular tailwind.
Real estate brokerage business looks very promising here – builders are concerned there may not be inventories to sell at current rate of selling because of regulatory bottleneck around permits. This can only push the existing home transactions higher.
My play to take advantage of this mega trend is through investing in businesses that will reap outsized benefit from continued inflection in transaction volume and is disrupting real estate business using technology-enabled business model – Redfin ($RDFN).
I like Redfin/$RDFN for below reasons (at a high level and this is not investment advice).
- It uses its own brokers and generates its own revenue, rather than linking to other brokers.
- It has true disruptive potential – charges 1-1.5% fee to sell your home rather than 6-7% of traditional real estate brokers.
- It has growth potential – because it hires its own brokers – they are expanding market by market rather than going national at once.
- It has more attractive valuation than others (stock has run a lot though).
Relevant WSJ article can be found below and think for yourself!
