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I've been looking for good investment opportunities in Lebanon for the past year, but can't find anything interesting. I'm getting 6% yearly interest on my Lebanese pounds in the bank, so I'm looking for something with a yield above 12% to make it worth the extra headache. Ideally I'd like something without any management time from my side. Any ideas? (please don't tell me real estate...)
I wouldn't invest in anything right now with the current situation in the region. 6% is already very high by today's standards (and it's only this high because of the risk on the currency and the state of the Lebanese economy) so just keep your money intact, that's the advice I've been giving to everyone recently. A 12% return is a 15 year old pipedream. To get this kind of potential return you'd be exposed to a relatively high risk nowadays.
Salloum wroteI wouldn't invest in anything right now with the current situation in the region. 6% is already very high by today's standards (and it's only this high because of the risk on the currency and the state of the Lebanese economy) so just keep your money intact, that's the advice I've been giving to everyone recently. A 12% return is a 15 year old pipedream. To get this kind of potential return you'd be exposed to a relatively high risk nowadays.
It doesn't have to be conventional investments like bonds or stocks. It can be risky investments in promising startups (although it's hard to estimate the potential return), or it can be investing in some small businesses with steady returns.

For instance I've been offered to buy and then rent a taxi license plate. It currently costs $30,000 to buy one, and then I can rent it for $300 per month, for a yearly return of 12% (assuming the license plate doesn't go up or down in value). This is nearly a risk free investment, as it's an asset that doesn't depreciate, has limited supply, and steady demand.
Don't buy a taxi license. Eventually the government will start reissuing plates themselves and the value will be almost nil for existing plates. Not to mention the fluctuating prices right now, anywhere between 22000-35000$. I'd never invest in anything that doesn't have some sort of face value, at least.
Out of curiosity, why are you avoiding real estate?
If also depends of the amount you have.
Salloum wroteDon't buy a taxi license. Eventually the government will start reissuing plates themselves and the value will be almost nil for existing plates. Not to mention the fluctuating prices right now, anywhere between 22000-35000$. I'd never invest in anything that doesn't have some sort of face value, at least.
What makes something with a face value a more attractive investment? I don't see any reason why it should be (I'd actually argue the opposite)
rolf wroteOut of curiosity, why are you avoiding real estate?
If also depends of the amount you have.
It depends on what kind of real estate investment you're talking about. But supposedly we're talking about buying and renting an apartment: it's a bad investment because the ratio of apartment prices to apartments rents is out of whack. You'd be lucky to get a yield of 4% on your real estate investment following this method (Off-course don't mention price appreciation to me because that's a myth).
I see lots of startups. Some are doomed from the start, others are subject to the founders loosing interest. Its a matter of cutting trough the crap. Look for the good combination of clear vision and market driven growth.
JackB wrote
Salloum wroteDon't buy a taxi license. Eventually the government will start reissuing plates themselves and the value will be almost nil for existing plates. Not to mention the fluctuating prices right now, anywhere between 22000-35000$. I'd never invest in anything that doesn't have some sort of face value, at least.
What makes something with a face value a more attractive investment? I don't see any reason why it should be (I'd actually argue the opposite)
Those taxi licenses were free (just taxes and fees) at one point. The only reason they are this expensive now is because the gov't is not issuing new ones for a long while now. Its not about having a face value per se, but I'd never invest in something that could worth nil tomorrow (because that's what it's truly worth. It's a plate number at the end of the day)
Salloum wrote
JackB wrote
Salloum wroteDon't buy a taxi license. Eventually the government will start reissuing plates themselves and the value will be almost nil for existing plates. Not to mention the fluctuating prices right now, anywhere between 22000-35000$. I'd never invest in anything that doesn't have some sort of face value, at least.
What makes something with a face value a more attractive investment? I don't see any reason why it should be (I'd actually argue the opposite)
Those taxi licenses were free (just taxes and fees) at one point. The only reason they are this expensive now is because the gov't is not issuing new ones for a long while now. Its not about having a face value per se, but I'd never invest in something that could worth nil tomorrow (because that's what it's truly worth. It's a plate number at the end of the day)
I don't agree at all.

The value of any asset is calculated by discounting its future cash flows. Taxi plate numbers are no different since they are means to generate cash. Theoretically speaking, the value of the next taxi plate number being offered in the market should be equal to the average discounted cash flows one would get from operating as a taxi driver, minus the minimum discounted cash flow that an illegible person is currently generating (or call it opportunity cost - which in this case I'm sure is zero since unemployment is very high in our beloved country). This is where the $30,000 current market price is probably coming from. If someone is willing to pay $30,000 for a taxi plate number today, it just means that the NPV of whatever he's making now (his opportunity cost) is at least $30,000 less than the NPV he'll be making as a taxi driver (I'm sure not everyone does the math before buying a taxi plate number, but at the back of their head, this is the trade-off bidders are trying to calculate).

Regarding your point of government issuing more plate numbers. I'm sure this will decrease the price of current plate numbers in the market (the price drop would heavily depend on how many new plates will be issued). But the price will never drop to zero (not even close). Bare in mind that the supply of such plate numbers is regulated for a reason. The government wants to protect the cash flow current taxi drivers are generating, and this is why we don't see them issuing new plate numbers.

Interestingly enough, I think taxi plate numbers can only go up in value (at least in the long term), and are immune to economic conditions. Here's why:

1- If the economy is good, more and more people would want to use taxi as a transportation means. Since supply of taxis is limited, to accommodate demand the price per trip will go up. If the price per trip goes up, the NPV of operating as a taxi driver will go up, therefore increasing plate number prices.

2- If the economy is bad, more and more people will lose their jobs. The more people losing their jobs the more the demand for taxi plate numbers (as the next bidder will always have an opportunity cost of zero). Higher demand will increase plate number prices - off-course in this scenario there will be other forces in play that will be pulling the price downward. Because more unemployment means less people using taxi for transportation, but this effect in my view is small since taxis are already very cheap in Lebanon (because "service" prices are regulated by the government)

The only risk is new and better means of transportation emerging in the market, such as metro stations (which will significantly decrease demand for taxis). But in a country like Lebanon, I doubt this is happening anytime soon.

Sorry for the long post :)
It's not a good time for real estate, prices are very high to buy, good to sell yes.
You can invest in some promising incoming night clubs a la Skybar or Grand Factory, you can get much more than 6% if it become one the beloved Lebanese night club
Salloum wroteIt's a plate number at the end of the day
Anywhere you go you will see the price dictated by artificial constraints combined with the offer and demand, except maybe in some lost place in the middle of nowhere, where you would be the only buyer and there would be no government to create artificial constraints.

The main issue here is that this inflated price is on precarious grounds, there is nothing telling us whether the government will or will not issue new plates. I think they are managing this like stocks, keeping the value high so as to get good payout whenever some are released. This also helps keep the amount of taxis on the road under control. But the government is not a corporation. If this was some publicly traded stock, it would be more reassuring.
I second salloum, don't depend on the governement to invest.
On the other hand, many people invested in taxi plates, issuing new ones would cause a crisis.
The government isn't issuing plates because they are pressured not to. That way, the backstage guys run the prices. Besides, do you really think there is a shortage of taxis in Lebanon and that supply is low compared to demand? If that were true, "service" wouldn't exist.
Salloum wroteThe government isn't issuing plates because they are pressured not to. That way, the backstage guys run the prices. Besides, do you really think there is a shortage of taxis in Lebanon and that supply is low compared to demand? If that were true, "service" wouldn't exist.
We should reduce the number of services,specially in Beirut, in Achrafieh from Sassine to Sodeco you can easily count 3 cars over 5 are services, they are the main source of traffic jams because they think the road is their own and stop on green lights, as usual in this country some services drivers don't pay the registration because they are protected by a political party, of course our police only make you pay if you are ''edamé'' while the illegal barbarian guys are protected and free
off-topic: beirut might be getting a modern bus system, with moderns buses, ticketing, bus stops, timing, etc.
I read that the plan is put, and they're waiting for the funding which is 70million dollars
NuclearVision wroteoff-topic: beirut might be getting a modern bus system, with moderns buses, ticketing, bus stops, timing, etc.
I read that the plan is put, and they're waiting for the funding which is 70million dollars
This is good, but they should let only the official ones to work instead of ''kel wa7ad fete7 3a 7sebo'' or else it will also make more traffic
NuclearVision wroteoff-topic: beirut might be getting a modern bus system, with moderns buses, ticketing, bus stops, timing, etc.
I read that the plan is put, and they're waiting for the funding which is 70million dollars
It's like fixing your bike when what you really need is a car.

Government putting their nose in everything is the main issue whether in Lebanon or anywhere else in the world. The reason why government is inefficient is because it doesn't operate on the basis of maximizing shareholder value. Or else it would have to be more efficient and more strategic about its decisions.

Let the private sector take care of things. Let competition set the prices, and dictate the technological advancements in the economy. Let this country breathe without putting your nose where it doesn't belong....for God's sake. This is the only way our economy will advance and become competitive in the global market. We have the cheapest labor, the brightest minds, and the most strategic location on the globe (right between the East, the West, the North and the South, with access to a sea linking North Africa and South Europe) and we're not taking advantage of it. It's sad............
NuclearVision wroteoff-topic: beirut might be getting a modern bus system, with moderns buses, ticketing, bus stops, timing, etc.
I read that the plan is put, and they're waiting for the funding which is 70million dollars
Unfortunately someone will pull a few strings to prevent that from happening because it may hurt the current bus drivers.
hussam wrote
NuclearVision wroteoff-topic: beirut might be getting a modern bus system, with moderns buses, ticketing, bus stops, timing, etc.
I read that the plan is put, and they're waiting for the funding which is 70million dollars
Unfortunately someone will pull a few strings to prevent that from happening because it may hurt the current bus drivers.
That's a good thing, as long as the 70 million dollars go back to their rightful owners.
This is a bit off topic, but since everyone is voicing their opinion, I would just like to say that am not happy or excited to see this amount of money being blown on something that will probably quickly become as decrepit as what we have today and loose all interest.
How about they start with printing a map of routes, and organizing what we already have now? Maybe incremental improvements, and put a framework in place for organic growth?

People forget, but Beirut acquired a fleet of buses in the 90ies. Also, is anyone familiar with with the Charles Helou bus station? This is what tends to happen with big, well funded projects from above which are disconnected with the needs and realities on the ground. People fill their pockets, take credit, and then the whole thing gets abandoned and falls in disrepair.
It might be part of municipality rush to elections...
I don't mind seeing a modern bus system similar to paris.
However, beirut streets are narrow, and thousands of families depend on this domain to live.
The governement's ought to elaborate certain projects, in which individuals such as JackB can invest in, everyone'll come out happy, and employed.