Over the years, we’ve had many conversations with our members and their advisors on risk. While Princip.al does not provide any investment advice, mainly acting as an information channel to and between family offices and other investors, it’s essential for us that we understand what risk truly is.
One of the most common misconceptions, often pointed out by our members who are less public market prone, is that volatility is risk. The stock market is a good example of this. For instance, the Nintendo company’s stock market value suddenly rose massively through the success of the Pokémon Go game, then to suddenly drop again when Nintendo kindly pointed out they wouldn’t make too much money out of it. That’s volatility to you. Was the Nintendo company riskier or less risky before or after the announcement? Probably not. It’s the same company with the same management making the same products in the same countries and currencies.
At Princip.al, we regularly attend conferences and we discuss projects with a lot of real estate investors and developers.
One of the topics which never fail to come up is the London real estate market. Indeed, the prices for real estate in Mayfair, Chelsea, Knightsbridge and other sought after burroughs in London have been defying gravity for the last five years.